The Works has just published its half-year trading update for the 26 weeks to 31 October.
Trading for the multi-channel value retailer of toys, arts, crafts, books, and stationery has been ‘stronger than expected’ with a two-year like-for-like sales increase of 14.5% and total two-year sales growth of 17.9%.
Gavin Peck, chief executive officer of The Works, commented: “It’s clear from these results that our products resonated extremely well with customers during the pandemic, helping them to read, learn, play and craft through lockdown.
“Our strong sales in recent months demonstrate that demand has been maintained and customers continue to value our offer”Gavin Peck, chief executive officer of The Works
“Our strong sales in recent months demonstrate that demand has been maintained and customers continue to value our offer. It’s particularly pleasing to see that whilst our online sales continue to run at almost double their pre-pandemic levels, store sales are also growing.
“Looking ahead, we have a fantastic range of products for our customers this Christmas with initial demand for them already very strong. We are cautiously optimistic about prospects for our peak sales season and our ability to trade through the ongoing supply chain challenges faced by the majority of our sector.
“As we celebrate our 40th year, I’m proud of the business that The Works has become and of our colleagues who work incredibly hard to delight our customers and support one another.”
The Works opened three new stores, closed five and relocated four, trading from 526 stores at the end of the half-year period.
The company noted that its refocused strategy outlined in July included de-emphasising new store openings in favour of profitable digital growth and driving improvements through the existing store estate. ‘Good progress against these pillars’ has helped to deliver the strong performance in the period, including improving the range and merchandising of its core art, craft and stationery categories; enhancing the in-store shopping experience through better space management and making stores easier to shop in; and continuing to improve product availability through better stock management, including improving supply chain systems.
The Works added that it also benefitted during the period from favourable external factors. It said: ‘Consumer demand has been strong, perhaps due in part to many families taking ‘staycations’ in the UK, and we believe the convenient locations of many of our stores helped us benefit from this. We also delivered a strong ‘back to school’ performance and have been successful in capitalising on the recent fidget frenzy trend.
‘There are also signs that customers are shopping early for Christmas, and we hope it is a positive indicator that strong demand will continue into the peak Christmas trading period. However, the business is being affected by the widely reported shortages of ocean freight and UK haulage capacity. To minimise the impact of this, we made a conscious decision earlier in the year to secure the supply chain, as a result of which, we expect to have the stock we need in order to achieve our sales plans, albeit having incurred significant additional costs. ‘Overall, taking into account the stronger than expected trading during the first half and the higher freight costs and, assuming that our strategies to ensure the availability of stock to customers in the lead up to Christmas continue to be successful, the board anticipates that the full year result will be in line with its original expectations.’