The Works sales grow despite crisis

In the 12 months to April 26, the Birmingham-headquartered retail chain, had revenue of £225 million helped by growth in online sales and a record Christmas, but slipped to an £18m pre-tax loss from a £2.3m profit for the year before.

Gavin Peck, chief executive of the books and crafts chain with shops across the Black Country, Shropshire and Staffordshire, 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.

"I am incredibly proud of all colleagues for their relentless hard work over the last year and for their commitment and the can-do attitude they have shown during this challenging period.

"Christmas was a turning point and this positive momentum continued in the following months supported by new products and merchandising initiatives launched during the year driving like-for-like sales growth. The improved trading performance was supported by the increased focus on cost management.

"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.

"Our performance this year demonstrates the resilience of our business and we are pleased to have delivered a creditable performance despite the challenging backdrop."

The loss before tax includes non-cash impairment charges resulting from Covid-19 of £19.5m, relating to goodwill and store assets

Despite a very positive performance since the reopening of stores in mid June, given the continued uncertainty presented by Covid-19, The Works said it was not yet possible to provide specific guidance for the financial year ahead and the group's board will not be proposing payment of a final dividend for 2019-2020.

A net 37 new shops opened in the year taking the total estate to 534 stores.

For the 17 weeks to August 23, with shops closed for the first seven weeks, sales were down 26 per cent.

Shops reopened in a phased manner following the lifting of Government restrictions in the UK and Ireland from June 15 and since then performance has been well ahead of the board's expectations with overall like-for-like sales increasing by 0.7 per cent.

Online performance remains strong with sales levels more than double last year's in the same 10 weeks.