Shares in The Works (WRKS) rallied 20% to 44p after the cut-price books-to-toys retailer shuttered its online business and raised FY27 guidance.
The Birmingham-based company operates a profitable estate of 500-plus UK stores. The Works blamed repeated failures by third-party fulfilment partners for making its loss-making online channel unviable.
The company sells affordable, screen-free activities for the whole family. Products span arts and crafts, toys and games as well as books.
The Works’ online channel will revert to a browse-only website with immediate effect. However, the website will serve as a shop window to The Works’ brand and stores, enabling customers to browse its extensive value range online.
Outlook lifted
Investors welcomed news The Works has continued to deliver a positive store performance. Like-for-like sales are up 3.3% in the year-to-date. And the firm remains on track to deliver FY26 adjusted EBITDA of £11 million, in line with current market expectations.
FY27 EBITDA guidance was upgraded from £12.7 million to £15 million, reflecting improvements to the core business and the removal of online losses. Management also insisted the retailer remains on track to deliver its medium-term EBITDA goal of ‘at least’ £22.5 million in FY30.
What did the CEO say?
CEO Gavin Peck said the decision to focus on The Works’ successful bricks-and-mortar business is the right step to reduce risk and and support long-term profitable growth.
He stressed: ‘A website that enables customers to browse our products and seek inspiration will help to bring our brand to life and drive customers to our 500 stores.’
The decision to close its loss-making online business looks a sensible one by The Works. Its low-ticket items lend themselves to in-store impulse purchasing rather than online delivery.
The restructuring will slash The Works’ operating costs and free up capital for investment in its growing stores business.
Read the press release here: https://corporate.theworks.co.uk/investors/
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