The Works hoping to return to profit growth following challenging year
Discount books and crafts supplier The Works is hoping to deliver more than £8m in profits next year, following a challenging 12 months in which it closed dozens of shops across the UK.
The retailer, which now has 511 stores, is expected to report that its profits dropped by £3m during its latest financial year, with costs rocketing due to inflation and the increase in National Living and Minimum Wages.
But bosses say they believe the business can grow its profits next year, following a change in strategy which focuses on cutting costs and improving its margins.
Chief executive Gavin Peck said: “We are pleased to have finished FY24 in line with market expectations, which reflects action taken to reset our cost base and improve margins, supported by improving store sales in the final quarter.
“Significant changes implemented across the business make us well-placed to offset cost headwinds and we expect to return to profit growth in FY25.
“In a year of considerable change at The Works I am incredibly grateful to our colleagues for their ongoing dedication to our business and to our customers.”
The business has closed 24 struggling stores over the past year and moved its online fulfilment centre to a “more efficient facility”.
It also ended its ‘Together Rewards’ loyalty scheme, which had been in place since 2013, in an effort to “keep prices low for all customers”.
As well as these in-store changes, the business moved its main market listing to AIM, which Peck said was due to the “more flexible regulatory environment” which would reduce the audit fee “significantly”.
Bosses have hailed the changes as a success, with the company’s latest trading update showing revenue had increased by 0.9 per cent and more than 96 per cent of its stores now turning a profit.