The Works has shut down its ecommerce operations with immediate effect as it looks to simplify its business model and double down on its store-led strategy.
The value retailer said it will transition to a non-transactional website, with the online channel now acting as a brand and product showcase designed to drive footfall to its estate of more than 500 stores.
The decision follows a review of the channel’s long-term viability, with the business citing ongoing operational challenges linked to two third-party fulfilment partners, alongside a relatively small and loss-making revenue contribution.
Chief executive Gavin Peck said the move would allow the retailer to reduce complexity and focus on its most profitable channel.
“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,” he said.
Since launching ecommerce in 2012, more than 90 per cent of The Works’ sales have continued to come from its physical store estate, reinforcing the retailer’s reliance on its high street presence.
The exit from online is expected to improve profitability, with the group upgrading its medium-term outlook following the removal of ecommerce losses.
The Works said it remains on track to deliver pre-IFRS 16 adjusted EBITDA of £11m for FY26, in line with market expectations. On a continuing operations basis, guidance has been restated at £13.5m.
Looking ahead, FY27 expectations have been upgraded from £12.7m to £15m, reflecting improvements in the core business and a simplified operating model.
The retailer said it expects to incur around £2m in exceptional costs related to the closure, with a small negative impact on cash in FY26 that is anticipated to be broadly neutral by the end of FY27. Over the longer term, the move is expected to be cash flow positive.
The decision comes as the business continues to see positive trading across its store estate, with like-for-like sales up 3.3 per cent year to date.
The Works plans to open a net five new stores in FY26, followed by a further 10 in FY27, as it continues to invest in its physical footprint.
The retailer said the move aligns with its ‘Elevating The Works’ strategy, which is focused on strengthening its position as a destination for affordable, screen-free activities.
Peck added: “Our mission – to become the favourite destination for affordable, screen-free activities for the whole family – has never been more relevant.”
The group is targeting medium-term EBITDA of at least £22.5m by 2030.
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