The Works reported a revenue hike this morning, up 30.6 per cent, and increasing 17.9 per cent compared to pre-pandemic performance.
The arts and crafts and stationary store announced a loss before tax of £1m in its interim results, a significant improvement on the prior year, which was a loss of £4.3m.
Strong two-year like for like sales growth of 14.5 per cent, ahead of its board expectations. Store two-year like for like sales increased by 7.3 per cent and online sales by 80.7 per cent.
Sales since the end of the interim period have remained strong, with a two-year like for like growth of nine per cent ensuring a record Christmas.
Store sales grew by 0.6 per cent and online sales by 71.9 per cent. This strong performance over the key Christmas trading period reflected a well executed trading plan, and the impact of ongoing proposition improvements, with strong growth in adult book sales and the kids zone.
The Works had a greater focus on front-list books like Richard Osman’s “The Man Who Died Twice”, branded board games like Scrabble and household names like Peppa Pig and Paw Patrol in our kids’ zone, all offered at the bargain prices.
As noted in the November trading update, The Works said that some Christmas trade was brought forward into September and October and, therefore, the slight reduction in the rate of like for like growth compared with H1 FY22 was anticipated.
However, sales in the week immediately prior to Christmas were less affected than expected by concerns relating to the rapid development of the Omicron variant. Meanwhile, proactive management of the supply chain ensured that it had adequate stock despite some of it arriving later than planned.
Due to the strong sales during November and December, terminal stock levels were low, reducing the need for significant markdown in the January sale. This looks to benefit the gross margin percentage and/or the level of stock provisions required at the end of the financial year, albeit higher freight costs will continue to affect margins in the second half of the year.
Despite ongoing supply chain disruption, inflationary pressures and residual uncertainty surrounding possible COVID-19 related restrictions, the update said: “we enter 2022 in a strong financial position and remain confident that we are well placed to make progress on the many attractive opportunities that lie ahead.”
Gavin Peck, chief exec at The Works, said: “Our performance in the first half shows that our improved customer proposition, clarified purpose and the successful execution of our strategy are delivering tangible results. We delivered a record Christmas, demonstrating the increasing appeal of our customer offer and despite uncertainty over the impact of Omicron and the ongoing supply chain challenges faced throughout our sector.”