Five in a row as The Works grows again
Sutton Coldfield-based discount retailer The Works has boosted its revenue yet again – the fifth year of growth since turnaround investor Endless took over the company.
Earnings, however, took another slide with EBITDA falling in 2012/13 from £7.5m to £5.6m – down from £10.5m 2010/11 – as the retailer invested heavily in its e-commerce operations.
Turnover hit £123m in the year to the end of April 2013, up from £121.5m in the previous 12 months as the business sold about 25 million books.
The increase came as a result of significant growth in online sales and a strong performance in a number of key categories. Like-for-like sales for the year were flat.
Like-for-like e-commerce sales were up by 314 per cent following significant investment in the online platform.
Chief executive Kevin Keaney told Insider the business was cautiously optimistic going into the Christmas trading period.
"We have a strong set up and have invested a lot of time to ensure we have the best-ever range of arts and craft, stationary, books and gift items," he said. "With our online presence and network of more than 300 branches, we're more accessible to a wider group of shoppers than ever before."
The Works, which sells discount books, gifts, stationery, toys and arts materials, added 13 branches to its portfolio of more than 300 stores as it embarked on the controlled expansion that Keaney told Insider about last year (2012).
"We are pleased with our 2012/13 performance, especially given that this was a very tough period for much of the retail sector," Keaney said.
"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 and crafts, and growing our book selection in popular areas such as children's, hobbies and entertainment."
He added: "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 multi-channel offering."
The Works was bought out of administration by turnaround firm Endless, partnering with executive chairman Anthony Solomon, in 2008 for £15m.
Solomon 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."
The retailer has invested capital back into the business to develop the e-commerce platform further and open new stores while upgrading the existing estate.