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The Works sees revenue growth of 1.3% to £124.2m as retailer announces new growth strategy
The Works, the value retailer of arts, crafts, toys, books and stationery, has seen a total revenue growth of 1.3% to £124.2m in the 26 weeks ending 3rd November 2024.
Meanwhile, the retailer also reported a total like-for-like sales decline of 0.8%, which was "in line with expectations" and still ahead of the non-food retail sector.
Store like-for-like sales, which represent over 90% of total sales, grew by 0.9%. This was due to the improved seasonal ranges and fiction book sales offered by the retailer.
However, online sales declined by 14.7%, impacted by a "planned reduction" in promotional activity. The Works also said that this decline was in part down to reduced capacity due to challenges at its third-party online fulfilment centre, which arose towards the end of the period.
The retailer reported a pre-IFRS 16 adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) loss of £2.8m, compared to an £8.5m loss for the same period last year, and an adjusted loss before tax of £6.5m, compared to a £10.4m loss previously. The significant year-on-year improvement has been driven by action taken to grow product margins and cost saving over the past year.
The company ended the period with net debt of £8.5m, compared to a net debt of £2.5m in the same period last year.
As a strong end to Christmas trading has continued into January, The Works also said that current trading for the 11 weeks ending 19th January 2025 is in line with expectations. This is largely due to resilient store performance, with like-for-like sales up 1%, supported by operational improvements across stores and its retail distribution centre. However, online sales have declined by 14.9% year-on-year.
A new strategy has been announced by The Works, which is expected to "transform the business" and deliver sales in excess of £375m and an EBITDA margin of at least 6% within five years. This strategy is underpinned by growing the name of the brand, improving customer convenience and being a lean and efficient operator.
