The Works swings to full year loss
The Works has swung to a pre-tax loss in the year to 26 April after being hit by the “significant impact” of Covid-19 in the last few weeks of the period.
The retailer increased its revenue by 3.5% to £225 million due to sales growing both online and in-store, but posted an £18 million loss when non-cash impairment charges resulting from the pandemic were included. This compares to a pre-tax profit of £2.3 million in the previous year.
Meanwhile, like-for-like sales edged up 0.7% due to trade being driven by new product ranges, record Christmas sales and new merchandising initiatives for its core stationery and art ranges.
Gavin Peck, chief executive of The Works, said: “Our performance this year demonstrates the resilience of our business and we are pleased to have delivered a creditable performance despite the challenging backdrop. I am incredibly proud of all colleagues for their relentless hard work over the last year and for their commitment and the can-do attitude they have shown during this challenging period.
“Christmas was a turning point and this positive momentum continued in the following months supported by new products and merchandising initiatives launched during the year driving like-for-like sales growth. The improved trading performance was supported by the increased focus on cost management.”
Giving a trading update for the 17 weeks to 23 August, The Works said total sales were down 26% in the period mainly due to the impact of Covid-19 store closures in the first seven weeks of its financial year. However, its performance since the reopening of stores on 15 June has been better than expected with overall like-for-like sales increasing by 0.7% in the 10 weeks to 23 August.
Meanwhile, the retailer’s online performance has been strong with sales levels more than double last year’s in the same 10 weeks.
Due to continued uncertainty surrounding Covid-19, The Works said it is unable to provide any specific guidance at this stage for the financial year ahead.
Peck added: “We will continue to monitor the situation closely and remain agile ahead of our key trading period. Our performance during the Covid-19 pandemic shows our customer proposition is more relevant than ever and, despite the significant uncertainty that remains, the board continues to believe that we have many exciting opportunities ahead of us that will enable us to deliver value for all of our stakeholders in the long-term.”
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