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The Works’ in-store sales are up, but the online arm is struggling as the group adopts a cautious tone ahead of the important Christmas trading period
- The Works saw sales rise 2.1% in the six months to the end of October
- Store sales rose, but online sales fell by nearly 17%, the group said
The Works saw sales rise 2.1 percent in the six months to the end of October, new results from the retailer show.
Total like-for-like sales increased 0.6 percent, while a 3.5 percent increase in retail sales offset a 16.9 percent decline in online sales over the period.
The Works shares fell sharply today, falling 10.14 percent or 3.50p to 31.00p this morning, after falling more than 45 percent in the past year.
Sales: The Works saw online sales fall nearly 17% in the half-year to the end of October
The group’s sales were hit earlier this year by operational difficulties in the wake of a cybersecurity incident in March.
But the retailer experienced strong growth in the summer, when the renewed outdoor play range performed well, followed by a record ‘Back to School’ season.
The company said the expansion of its book offering has been a huge success, with recent new titles such as Jeff Kinney’s Diary of a Wimpy Kid: Diper Overlode, Richard Osman’s The Bullet That Missed and Colleen Hoover’s It Starts With Us proving that special. are strong sellers.
Gavin Peck, chief executive of The Works, said: “We delivered a resilient performance in the first half with positive sales growth overall, demonstrating progress on our ‘better, not just bigger’ strategy. ‘
He added: ‘While it is very difficult to predict what Christmas will look like this year, we believe that the great products and fantastic value we offer will be more important than ever, with families still wanting to celebrate Christmas, but in a more affordable way.
“The Works has proven to be a resilient company and we remain confident in our ability to move forward with our strategy and deliver growth over the medium term, supported by a robust balance sheet.”
The Works said it had a net cash supply of £11 million by the end of the period.
Looking ahead, the retailer said it remained “cautious” about how consumer spending could be impacted by higher inflation and interest rates during the pivotal Christmas season and throughout the fiscal year.
It added, “However, with our value proposition now more relevant than ever and well positioned operationally for Christmas, the Board’s expectations for FY23 results remain unchanged.”
Russ Mould, investment director at AJ Bell, said, “These are tough times for the high street and salesman of bargain books, art and craft supplies. The Works sees revenue growth growing slowly.
“While there are some extenuating circumstances and it’s only a slight softening for now, it’s not hugely encouraging as an indication of the direction of travel.”
He added: ‘The Works relies at least in part on impulse buying and people have no choice but to be more disciplined with their spending.
That said, the start of the festive season will be an obvious destination as people want to celebrate Christmas on a budget and that bolsters management’s confidence about the outlook for the coming weeks.
“Unlike some of its retail rivals, The Works at the very least benefits from having a good balance sheet and a clear value proposition that should fit well with the current economic climate.”