300% online sales growth helps The Works defy retail gloom
MIDLANDS-based discount books and stationery retailer, The Works, has seen full year revenues rise, boosted by a 300% increase in online sales.
Bucking the declining trend on the high street, the retailer delivered total sales of £134m for the financial year ending April 2013, up from £132.5m in 2011. Growth was driven by online sales and new stores. Like-for-like sales for the year were flat.
The Sutton Coldfield-headquartered firm has delivered sustained growth in the five years since being acquired by retail entrepreneur, Anthony Solomon, and private equity firm, Endless.
Performance highlights in 2012 included the opening of 13 new branches, bringing the network to more than 300 stores across the UK. Like-for-like e-commerce sales were up 314%, which followed significant investment in the online platform.
It sold around 25m books during the year but standout like-for-like growth came in non-book categories, including crafts (up 20%), arts materials (up 10.5%) and games (up 18%).
Significant like-for-like growth was also seen in key book genres, and continued growth in children’s books (up 3%).
EBITDA totaled £5.6m, with other capital invested back into the business in the form of e-commerce platform development and expansion, investment into opening new stores, and upgrading the existing store estate.
Kevin Keaney, The Works CEO, said: “We are pleased with our 2012 performance, especially given that this was a very tough period for much of the retail sector.
“The stand-out growth across both book and non-book categories demonstrates that our strategy of moving into related product ranges, while maintaining our focus on bargain books, is paying off. We will develop this strategy further in 2013, expanding the range and prominence in-store of important growth categories such as arts & crafts, and growing our book selection in popular areas such as children’s, hobbies and entertainment.
“Strengthening our e-commerce site has also paid off for us in terms of sales and customer reach. In 2013, we’ll continue to expand our online presence, while also looking for opportunities to develop this into a true multichannel offering.”
He said despite the continued challenge to the retail sector, the business was confident of maintaining growth.
Anthony Solomon, The Works chairman, said: “The Works remains a highly profitable, growth business. The business has a very strong balance sheet and very little debt, giving us an excellent financial platform on which to capitalise on the significant opportunity that we see both on the high street and online.”
