The Works, a high street arts and crafts retailer, faced a challenging fiscal year in 2024, marked by a decline in profits.
- Profit before tax at The Works fell by 39% compared to the previous year, primarily driven by a tough trading environment and increased operational costs.
- Despite a downturn in overall sales, in-store sales saw a slight rise, although online sales significantly declined.
- Cost-saving measures and improved trading towards the end of the year helped The Works meet market expectations.
- Looking forward, early 2025 sales have aligned with projections, with slight improvements in like-for-like sales.
The Works, a prominent retailer in the arts and crafts sector, faced a difficult year in 2024 due to a challenging market environment. The company reported a significant reduction in profit before tax, which fell by 39% to £3.2 million, down from £5.3 million in the previous year. Additionally, adjusted earnings before interest, tax, depreciation, and amortisation dropped by 30% to £6 million.
Despite these financial setbacks, the retailer achieved a modest 0.9% increase in total revenue, reaching £282.6 million. This slight growth came amidst significant consumer demand pressures and escalating living costs that impacted sales figures. Store sales, which contribute to approximately 90% of the company’s revenue, rose by 0.6% like-for-like, indicating some resilience in physical retail channels.
However, the online sales segment performed poorly, experiencing a like-for-like decline of 12.4%. This contraction in digital revenue notably contributed to the overall sales slump of 0.9%. The Works attributed these challenges to a ‘tough trading environment’ and operational difficulties encountered particularly in the run-up to Christmas, alongside rising costs that pressured profitability.
In response to these challenges, The Works managed to control costs effectively and enhance performance during the final quarter of the fiscal year, allowing the company to close the year according to market expectations. CEO Gavin Peck noted the company’s satisfaction with the strategic progress made throughout the year, emphasising ongoing efforts to refine business transformation plans to improve future performance and shareholder returns.
Looking to the future, The Works reported that the sales for the first 21 weeks of 2025 have been on target, with like-for-like sales seeing a slight increase of 0.2%. As the crucial Christmas trading period approaches, CEO Gavin Peck expressed confidence in the company’s readiness and strategic positioning, highlighting operational improvements and customer support initiatives aimed at ensuring a successful season.
Despite a challenging year, The Works leverages strategic improvements to position itself favourably for future profit growth.
