REG - TheWorks.co.uk PLC - Update regarding online proposition

Works co ukAnnouncement

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RNS Number : 3921X  TheWorks.co.uk PLC  20 March 2026

20 March 2026

 

TheWorks.co.uk plc

("The Works", the "Company" or the "Group")

Update regarding online proposition; FY26 guidance maintained and FY27
guidance upgraded

 

 

The Works, the UK's leading specialist retailer of affordable, screen-free
activities for the whole family, announces that the Board has taken the
decision to cease trading of the Group's online channel and transition to a
non-transactional website, with immediate effect.

 

Since 2012 The Works has operated as a multi-channel value retailer, with over
90% of sales driven by its profitable estate of more than 500 stores. The
online channel had provided shopping convenience for customers and
improvements were being made to the channel's functionality and profitability,
driven by the Company's 'Elevating The Works' strategy.

 

Operational challenges experienced by two different third-party fulfilment
partners significantly impacted the channel's performance in the last two
financial years, outweighing the progress made. Given these issues, the
channel's relatively small and reducing revenue contribution and loss-making
performance((1)), the Board assessed a wide range of options and has
determined that the channel is no longer sustainable, with the optimal
solution being to move to a non-transactional website.

 

New trading model

 

The website will serve as a shop window to The Works' brand and stores,
enabling customers to browse its extensive value range of arts and crafts,
stationery, toys and games and books online, and provide ideas and inspiration
for customers to connect through affordable, screen-free activities for the
whole family.

 

This transition will sharpen the Group's focus on its core strength as a
successful bricks-and-mortar retailer by simplifying its operating model,
reducing operating costs and freeing up capital to invest in its growing and
increasingly profitable store business. The store estate offers significant
growth potential, with ongoing like-for-like (LFL) sales growth and scope to
expand the Group's footprint by a further 100 locations. A net 5 new stores
are set to open in FY26, with a further 10 planned for FY27.

 

Guidance

 

The Board anticipates exceptional closure costs of around £2m, and that the
online channel will be accounted for as a discontinued operation((2)). These
exceptional costs will be recognised in FY26. The transition is anticipated to
have a small negative impact on the Group's cash position in FY26 but will be
broadly neutral by the end of FY27, with the closure costs offset by reduced
working capital from lower inventory levels going forward. Longer-term, the
decision to exit is expected to be cash flow positive.

 

The Group has continued to deliver a positive store performance, with LFL
sales up 3.3% in the year-to-date, and remains on track to deliver FY26
pre-IFRS 16 Adjusted EBITDA of £11.0m in line with current market
expectations. When adjusting for continuing operations only, FY26 guidance is
restated to pre-IFRS 16 Adjusted EBITDA of £13.5m. In FY27, guidance is
revised with current external expectations of £12.7m upgraded to £15.0m,
reflecting improvements made to the core business and the removal of online
losses.

 

Supported by the ongoing execution of its 'Elevating The Works' strategy, and
mission to become the favourite destination for affordable, screen-free
activities for the whole family, The Works also remains on track to deliver
its medium-term EBITDA goal of at least £22.5m in FY30((3)). The Board is
confident that this can be achieved from lower sales((4)) than the original
£375m target due to the higher profit margin anticipated after discontinuing
the online channel.

 

Gavin Peck, Chief Executive Officer of The Works, said: "We have reached this
decision after a thorough assessment of the options available and are
confident that focussing on our successful bricks-and-mortar business is the
right step to reduce risk, improve operational clarity and support long-term
profitable growth. A website that enables customers to browse our products and
seek inspiration will help to bring our brand to life and drive customers to
our 500 stores.

 

"Our mission - to become the favourite destination for affordable, screen-free
activities for the whole family - has never been more relevant and this,
combined with ongoing delivery of our 'Elevating The Works' strategy, means we
are well-positioned to achieve significant and profitable growth in the years
to come."

 

This announcement contains inside information for the purposes of the retained
UK version of the EU Market Abuse Regulation (EU) 596/2014 ("UK MAR").

 

 Enquiries:

 TheWorks.co.uk plc            via Sanctuary Counsel

 Gavin Peck       CEO

 Rosie Fordham CFO

 Singer Capital Markets (Nomad and Broker)             020 7496 3000

 Peter Steel

 Sara Hale

 Jalini Kalaravy

 Samed Ethemi

 Sanctuary Counsel                                     0207 340 0395

 Rachel Miller                                         theworks@sanctuarycounsel.com (mailto:theworks@sanctuarycounsel.com)

 Hannah Butler

 Yasmine Fowler

 

Footnotes:

(1)  The Works' online channel has typically contributed less than 10% of
sales, other than during the COVID-19 pandemic period when its stores were
closed. During the FY26 financial year-to-date, online has contributed
approximately 5% of total sales. In the year ended 4 May 2025, the online
channel generated revenue of £24.8m and an operating loss £0.3m.

(2)  The closure costs will be accounted for as an adjusting item within the
FY26 accounts.

(3)  FY30 goals as part of 'Elevating The Works' strategy - turnover of
£375m and EBITDA margin of at least 6%, which equates to an EBITDA of at
least £22.5m.

(4)  Lower sales solely due to the discontinuation of the online operation.

Notes for editors:

The Works is the UK's leading specialist retailer of affordable, screen-free
activities for the whole family, providing customers with fantastic value
across four product categories: arts and crafts, stationery, toys and games,
and books. The Group operates a network of over 500 stores in the UK &
Ireland.

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