Books, stationery, and crafts retailer The Works has shut down its loss-making online shop, a move that saw its shares jump on Friday. The company announced the immediate closure of its transactional website, opting instead to focus on its network of physical stores across the UK.
The online presence will become non-transactional, serving only to display products and guide customers to in-store purchases. The group cited persistent operational challenges from relying on two different third-party fulfilment partners, which it said had significantly impacted online performance over the past two years.
The board concluded that the online shop was no longer sustainable after assessing various options. The closure will cost around £2 million and affect a very small number of employees. The move is expected to have a small negative impact on cash position this financial year but be cash flow positive in the longer term.
Meanwhile, The Works reported strong trading in stores, with like-for-like sales up 3.3% year to date and earnings set to meet forecasts. It hiked earnings guidance from £12.7 million to £15 million for the next financial year due to improvements in the core shops business and removal of online losses.
The retailer plans to open five net new stores this financial year, with potential for up to 100 more sites. Chief executive Gavin Peck said: 'We are confident that focusing on our successful bricks-and-mortar business is the right step to reduce risk, improve operational clarity and support long-term profitable growth.'
