The Works sees sales increase by 12.7% driven by BookTok and frontlist expansion

Retailer The Works saw sales increase by 12.7% in the 52 weeks to 1st May 2022 compared with the same period in 2020, driven by an expansion in its frontlist book ranges as well as capitalising on trends such as BookTok. 

The retailer said in a trading update: “By capitalising on this trend, we have been able to draw attention to previously bestselling books and prompt renewed customer interest in them. Branded toys and games have also continued to perform strongly, through reinforcements to our ranges of, for example, Peppa Pig, Paw Patrol and Cocomelon.” 

The trading update, which compared performance against 2020 because of enforced 2021 closures during the pandemic, said full-year earnings before interest, taxes, depreciation and amortisation (EBITDA) are forecast to be £15m. The retailer said it was in a “strong” financial position, with net cash of £16.3m at the end of the period, an increase of £15.5m during the 2022 financial year. The board also expects to reinstate a dividend of approximately 2.4 pence per share alongside its FY22 results in September and maintain “a progressive dividend policy thereafter”. 

It added: “Following the strong first half and record Christmas trading performance, two-year like-for-like sales during the final months of the financial year remained positive although, as expected, the rate of growth has been lower than before Christmas. Consumer spending is widely reported to have slowed in recent months and we believe this has had an impact on our sales.” 

Gavin Peck, chief executive, said the business was now “consistently delivering sales well ahead of pre-Covid levels”. He added: “This performance, and the resilience that our business has shown against a challenging external backdrop, demonstrates the positive effect of our ‘better, not just bigger’ strategy, which still has a lot more upside to deliver.  

“We are delighted that our improved trading performance will enable us to recommend reinstating the dividend and remain optimistic that we can deliver further sales growth in the year ahead. 

“As we move into our new financial year, general trading conditions remain challenging. We will continue to focus on the factors within our control and ensure that, as customers face increasing cost-of-living pressures, they can continue to rely on The Works as a destination for great-value products to inspire reading, learning, creativity and play.” 

During the 2022 financial year The Works opened five new stores, closed seven and relocated six branches. The business traded from 525 stores at the end of the period. 

It also said it would be “significantly” speeding up the implementation of plans to strengthen its IT security measures after a cyber security incident in April forced the chain to close some of its stores and suspend new stock deliveries. It said the incident had a “limited impact on trading”. However, the additional time needed to implement these security improvements will delay the full-year results until September 2022.