UK retailer TheWorks plans price hikes to offset rising labor costs
24/01/2025 09:27
Jan 24 (Reuters) - British arts and crafts retailer
TheWorks.co.uk WRKS.L said on Friday it plans to undertake
targeted price hikes to counter labour cost increases of about
6.5 million pounds ($8.05 million) expected in fiscal 2026.
WHY IT'S IMPORTANT
The retailer joins a long list of UK firms to flag a surge
in labor costs following the anticipated rise in employers'
social security contributions and minimum wages announced in the
country's budget in October.
The steep rise in wages, which will directly affect around 3
million workers, has pressured British companies to hike prices
even in the likelihood of diminishing consumer spending.
BY THE NUMBERS
TheWorks, which sells toys, books and stationery, reported a
1.3% rise in revenue to 124.2 million pounds for the first half
of fiscal 2025.
Adjusted core loss narrowed to 2.8 million pounds for the 26
weeks ended Nov. 3, from 8.5 million pounds a year earlier,
helped by cost cuts.
The company said a fall in customer spending and disruptions
at its third-party operated online fulfillment center weighed on
its performance over the holiday season.
WHAT'S NEXT
TheWorks said it is on track to deliver annual profit, in
line with market estimates, and expects further profit growth in
fiscal 2026.
KEY QUOTE
"We are mindful of the need to navigate fragile consumer
confidence and significant cost headwinds... We expect that our
action to grow revenue, increase margins and reduce costs will
deliver improved results in the remainder of this financial year
and in FY26," CEO Gavin Peck said in a statement.
MARKET REACTION
Shares of the company rose as much as 8.3% to 21.26 pence.
($1 = 0.8071 pounds)
(Reporting by Raechel Thankam Job; Editing by Shilpi Majumdar)
((RaechelThankam.Job@thomsonreuters.com))