Times Business section today23 Jan 2021 11:31
Online works to chain’s advantage
Improving margins and tight controls on costs, bolstered by government support schemes, helped The Works to shrug off the enforced closure of its stores and narrow its interim losses.
The gifts and stationery retailer reported a pre-tax loss of £4.3 million in the 26 weeks to October 25, a 49.4 per cent improvement on the previous year. With shops being forced to close under coronavirus restrictions for the first seven weeks of the period, revenue fell by 7.8 per cent to £88.9 million. However, when shops were open, like-for-like sales increased by 10.6 per cent and online sales were about double the previous year. The Works was founded in 1981 as Remainders, a discount bookshop. The company, which was rebranded in 2003, operates 532 outlets in the UK and Ireland.
In a trading update, it said that sales in the 11 weeks from October 25 to January 10 had been heavily affected by the second and third national lockdowns. Total sales fell by 24.8 per cent, while online sales were up 70 per cent. Gavin Peck, chief executive, said: “Our interim results and trading over the crucial Christmas period reflect a robust performance, given the impact of store closures as a result of government restrictions.”
He said that the group was focused on maximising online sales and controlling costs to ensure that its stores could reopen safely when restrictions were lifted.
Analysts at Shore Capital said: “The lockdowns and forced closure of the store estate have enabled the business to increase online capacity significantly. Re-platforming of the website during the summer will help to mitigate some of the cost pressures in the business.
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