Discount retailer The Works saw profits soar 47 per cent to £14 million in its latest full year results, as stronger sales, improved margins and cost savings helped to offset its higher wage and tax costs.
The brand attributed its performance to its “screen-free” strategy paying off. It also noted that supplier negotiations, tighter stock controls, improved promotional markdowns and a more favourable product mix helped to boost its margins.
The results come after The Works opted to axe its ecommerce operations earlier this year, choosing to instead double-down on its store-led strategy.
“People are coming to store who used to shop on the website”
Speaking to Retail Gazette, The Works CEO Gavin Peck explains that the brand has been drawing in customers who previously only shopped on its website.
“Since we closed we can’t physically track who’s going into store who used to shop on the website before, but if you stand in store, speak to store colleagues or listen to customers you will hear feedback that people are coming to store who used to shop on the website,” he says.
“Some of those had never tried our stores before, so it’s definitely having a positive impact on our footfall.”
“We never say never, but certainly for the next several years we’re focused on everything else we’ve got to do as part of our strategy,” he says.
“Opening new stores, optimising stores that we’ve got through space and improving the proposition, the brand, and the systems work.
“At some point in the future we might look at bringing back click and collect or marketplaces or other things. But that’s not in the near term.”
Standout stores
In terms of its new store launches since ditching ecommerce, the exec says that he is “pretty proud of all the stores that we’ve opened”.
However, he highlights its new retail park store near Newport as performing “particularly well”.
He notes that it has opened stores in “quite a few retail parks” such as Deepdale Shopping Park in Preston and Glasgow Fort.
“They’re big high turnover openings for us. But another one that’s gone particularly well is in Arnold, which is a suburb of Nottingham. That has massively outperformed what we thought it would do,” he says.
“We’ve had a few retail parks that have taken slightly longer to mature, but certainly the ones we’ve opened this spring have gone really well.”
With ecommerce out of the picture, The Works has plenty of chance to make improvements to its physical store estate.
Peck explains that the company is “just about to roll out customer experience training for all of our store colleagues at absolutely every level”.
“That’s through a program called Fame, which is find a moment every time, which is just really about expectations for base customer experience,” he says.
“For us versus some of the general merchandise discount retailers like B&M, Home Bargains and The Range, they sell some of what we sell.
“For us we want the customer experience to be a key part of that. I think we already have fantastic colleagues giving great experience, but we want to lift that level and improve the consistency of it.”
“At the minute, pretty much everybody gets the same range, irrespective of the demographics in that location and what sells in that location,” he says.
“We need a system to do that long term and properly, but in the short term we’re looking at stores that do particularly well for our books where there’s a lot of BookTokers.
“Looking at how we can increase the space and the amount of book stock going to those stores.”
He adds: “Around our stores located near the beach, we’re also looking at how we can send more of our out to play summer play ranges.
“And like many other retailers, we’re continuing to focus on the kids’ pocket money trend, with the particular trend at the moment being those squishy dumplings.
“We’re just continuing to really drive that newness in, particularly for kids’ pocket money toys so that when kids come in there’s something that they want and that will keep them coming back.”
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