The Works’ decision last week to shut down its ecommerce operations was positioned as a decisive return to a store‑first strategy after years of underperforming online sales. With more than 90% of its sales coming from its 500+ stores and online remaining a marginal, structurally loss‑making channel, the decision should not come as a surprise, says Zoe Mills, head of UK retail at Globaldata.
“Shutting down its transactional website is an almost inevitable reaction from The Works to pivot focus to its more successful instore operations and protect profits to ensure long-term viability for the business,” Mills said. Pointing to the fact that its ecommerce operations have been in “terminal decline” since 2020/21, she questioned “whether this action could and should have been taken sooner.”
Operational failures accelerated the problems
Persistent issues with two third‑party fulfilment partners severely affected ecommerce performance over the past two years, wiping out progress and contributing to ongoing losses.
“These issues with its newest fulfilment partner meant that in its latest results for the Christmas period to 18 January 2026, its online capacity was limited, resulting in online sales declining 51.8% against an already very weak comparative,” Mills said. “The challenge for The Works, if it had retained its online operations, would have been to rebuild online demand after reducing its marketing spend. This investment would have been an unnecessary risk for The Works, as its stores are well-placed to continue generating sales growth.”
These challenges led the board to decide the online shop was no longer sustainable, triggering closure costs of around £2m but setting expectations for improved cash flow in the longer term.
“The removal of this online burden should have a positive impact on The Works’ business and enhance its prospects in 2026, despite the ongoing economic challenges in the UK. Its value focus will support it as shoppers trade down from mass market book retailers, including Waterstones and TG Jones, and craft retailers such as Hobbycraft, which has struggled itself,” Mills added.
Mills’ assessment fits with financial updates across multiple reports. Shares in The Works jumped on Friday as investors welcomed the shift in strategy. The retailer has already increased future earnings guidance from £12.7m to £15m for FY26.
Store‑led growth ahead
The Works is now pushing ahead with steady bricks‑and‑mortar expansion, planning five net new stores in FY26 and ten more in FY27, with long‑term scope for up to 100 additional sites. Like‑for‑like store sales remain strong, up 3.3% year‑to‑date. An economic environment where, as PwC’s Retail Outlook 2026 reports, lower‑income and older shoppers in particular are “searching harder for value and trading down” underscores the decision by this value-led retailer to focus investment where its proposition is strongest.
The closure of ecommerce at The Works may feel abrupt, but as Mills notes, it is the culmination of a long‑running decline. By shedding an unprofitable channel and doubling down on a thriving store estate, The Works enters 2026 with a clearer path to profitable, focused growth.
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