The Works swings to loss amid ‘significant’ coronavirus impact

The retailer suffered a reported pre-tax loss of £18m during the year to April 26, compared with a £2.3m profit the previous year, after booking £19.5m in non-cash charges including downgrades in the value of its stores. 

Adjusted pre-tax profit plunged 65.2% to £2.4m, while adjusted EBITDA was down 22.3% to £10.8m. 

Despite the “adverse trading impact” of Covid-19 and the resulting lockdown during the back end of its financial year, The Works grew revenues 3.5% to £225m across the 52-week period.

On a like-for-like basis, sales were up 0.7% across the 52-week period.

The business said it had also achieved “very positive performance” in its stores since they reopened in June.

During the 17 weeks to August 23, total sales were down 26%. But across the most recent 10-week period, since its stores reopened, like-for-like sales improved 0.7% year on year. 

The Works said online sales during that 10-week period were “more than double” last year’s levels. 

It has made further investments in its ecommerce platform to increase capacity ahead of the peak Christmas trading period, launching a £1m new-look website last month. 

The retailer has also managed to grow its average transaction value by 20-25%, and is focusing its efforts on its click and collect service to drive upselling in store.

The Works boss Gavin Peck said: “Our performance this year demonstrates the resilience of our business and we are pleased to have delivered a creditable performance despite the challenging backdrop.”

He added: “The closure of our entire store estate in March had a significant impact on our business, however we responded to the crisis with agility and were ready to bounce back once safe to do so. Our decisive action in response to the Covid-19 pandemic enabled us to protect colleagues and customers, meet the significant increase in online demand and minimise the financial impact.  

“We are encouraged by the trading performance since lockdown lifted and will continue to focus on improving our online capacity and customer experience in stores under social distancing as we head into peak Christmas trading.”