The Works today said it planned to open fewer stores as it looked to focus on growing sales more profitably. Its chief executive Kevin Keaney has stepped down, replaced by chief finance officer Gavin Peck.
The Works, a Top150 retailer in IRUK Top500 research, today reported that it turned over £96.4m in the 26 weeks to October 27, up from £91.5m at the same time last year. The growth in total sales came as it opened a net 28 new stores, to take its total estate to 525. But like-for-like sales, which strip out the effect of store openings and closures, were down by 3.6% over the period and the retailer reported a pre-tax loss of £8.5m, down slightly from a loss of £9.1m last time. The retailer does not plan to open any more for the rest of the financial year, and to open a net 20 stores in the next financial year.
Sales in the 11 weeks to January 12 were up by 1.5% LFL, reflecting online and sales growth. Incoming The Works chief executive Peck said today that “solid” Christmas performance came following online and in-store growth.
He added: “However, to ensure we are well placed to deliver profitable growth in the medium-term we have taken action to refocus our strategy by opening fewer new stores, with a view to driving improved performance in our existing estate and increasing our focus on cost savings. We remain confident in the prospects for the company with the business trading-in line with the board’s full-year expectations.
"I am delighted to be taking on the role of CEO. The Works is a great business with fantastic colleagues providing a compelling and differentiated offering for our customers. Building on the company’s established foundations, I look forward to leading The Works in its next phase and creating value for all of our stakeholders.”
Looking ahead, the retailer says that the retail environment remains challenging, with rates for the national living and minimum wages set to rise. It is now looking to grow through increasing sales in its existing business rather than through store openings.
The Work plans to launch a new web platform in July 2020. It said that during the first half of the year had focused on increasing prices online in order to improve profitability.
It said it had worked with its warehouse and fulfilment provider to increase productivity and customer service while making operations more cost efficient. Its click and collect operation has also driven visitors to stores, who may then make additional purchases once there.
Image courtesy of The Works