TheWorks.co.uk PLC (LSE:WRKS, FRA:6EU), the discount books and crafts retailer, is shutting its online shop and reverting to a browse-only website, blaming repeated failures by third-party delivery partners for making the channel unviable.
The company, which operates more than 500 stores across the UK, said operational problems with two successive fulfilment partners had undermined the performance of an already loss-making channel whose revenue contribution had been falling.
The closure will cost around £2 million in exceptional charges, to be recognised in the current financial year, though the company said the decision would be broadly cash neutral by the end of the 2027 financial year and cash flow positive over the longer term.
Despite the exit, the group upgraded its 2027 financial year earnings guidance from £12.7 million to £15 million, measured by pre-IFRS 16 adjusted EBITDA, a standard measure of operating profitability that strips out lease costs, reflecting both the removal of online losses and underlying improvements to the store business.
Guidance for the current financial year, restated for continuing operations only, was lifted from £11 million to £13.5 million on the same basis.
Like-for-like store sales are up 3.3% in the year to date, and the company said it remains on track to hit a medium-term EBITDA target of at least £22.5 million by 2030, a goal it now believes can be reached from a lower sales base than originally planned given the improved margins from dropping online.
The company intends to open a net five new stores this financial year, followed by a further ten in the next, and sees scope to expand its footprint by around 100 additional locations.
Chief executive Gavin Peck said focusing on bricks-and-mortar was the right step to reduce risk and support long-term profitable growth, with the website repurposed to drive customers to stores rather than transact directly.