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The Works losses narrow amid rollout of new growth strategy

The Works losses narrow amid rollout of new growth strategy

The Works has reported narrowing losses and a modest increase in revenue for the first half of its financial year, despite challenges in online sales and a “persistently challenging” environment.

For the 26 weeks ending November 3, the arts and crafts retailer posted a 1.3% rise in revenue to £124.2m.

While store sales showed growth, up 0.9% on a like-for-like basis, online sales fell 14.7%, impacted by reduced promotional activity and issues with its third-party fulfilment centre.

The retailer’s adjusted loss before tax narrowed to £6.5m, down from £10.4m in the same period last year. The company attributed this improvement to its cost-saving measures and actions aimed at growing product margins.

Christmas trading saw store sales increase by 1%, with a strong finish to the festive season continuing into January. However, like-for-like sales for the period still showed a slight decline of 0.9%.

In response to ongoing market challenges, The Works has unveiled its “Elevating The Works” strategy, which focuses on three key areas: growing brand fame, improving customer convenience, and becoming a leaner, more efficient operator.

The retailer is targeting £375m in revenue and an EBITDA margin of at least 6% within the next five years.

Following a review of long term goals, it said the strategy has been designed to position the business as the go-to destination for affordable, family-friendly activities that are screen-free.

Despite the positive outlook, it anticipates around £6.5m in cost headwinds for the full year 2026, primarily due to rising minimum wages and national insurance contributions.

CEO Gavin Peck said: “Against a persistently challenging consumer backdrop, we delivered a much improved Christmas performance in stores and took decisive action to protect profitability during peak trading.”

“While consumer confidence remains fragile, we are optimistic about our ability to navigate ongoing cost headwinds through continued cost-saving actions and targeted price increases.”

The company reported that it remains on track to achieve market expectations for its 2025 financial year, anticipating further profit growth in the financial year 2026.

“Although challenges remain, we are confident in our ability to deliver long-term growth and success.”

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