The Works, a prominent arts and crafts retailer, is grappling with reduced consumer demand and profitability challenges in 2024.
- The company’s earnings before interest, tax, depreciation, and amortisation fell by 30% to £6m.
- The Works’ profit before tax declined by 39%, yet overall revenue saw a slight increase to £282.6m.
- Store sales experienced modest growth, but online sales dropped significantly by 12.4%.
- Cost-saving efforts and fourth-quarter improvements helped The Works conclude the year as anticipated, with a positive outlook for 2025.
In 2024, The Works, a leading high street arts and crafts retailer, faced notable hurdles as consumer demand softened, significantly impacting sales and profits. The firm reported a 30% drop in adjusted earnings before interest, tax, depreciation, and amortisation (EBITDA), bringing it down to £6 million compared to £9 million the previous year. Likewise, the adjusted profit before tax plummeted by 39% to £3.2 million, a steep decline from £5.3 million in 2023. Despite these significant reductions in profitability, The Works managed to record a slight increase in total revenue to £282.6 million, marking a 0.9% rise over the financial year.
Store sales, accounting for approximately 90% of the company’s total revenue, remained a key driver of growth, showing a 0.6% like-for-like increase. However, online sales told a different story with a 12.4% decrease in like-for-like sales, contributing to an overall sales decline of 0.9%. The company cited a challenging trading environment and rising operational costs as factors that intensified the pressure on its profitability.
In the approach to the Christmas period, The Works encountered operational challenges and tough trading conditions. However, through determined cost-saving measures and improved performance in the final quarter, the company was able to close the year meeting market expectations. The outlook for 2025 seems cautiously optimistic, with the first 21 weeks showing that sales have been on target, recording a slight like-for-like sales uptick of 0.2%.
CEO Gavin Peck shared insights on the company’s standing, noting satisfaction with ending the year in line with expectations despite the difficult backdrop. He emphasized the strategic progress made throughout the year and outlined plans to enhance company performance and shareholder returns. Peck acknowledged ongoing challenges such as subdued consumer confidence and cost headwinds, but expressed optimism about the company’s strengthened operational position as it heads into the upcoming peak Christmas trading period.
In summary, despite facing tough trading conditions and reduced consumer demand in 2024, The Works is strategically positioned for a rebound with an optimistic outlook for 2025.
