Update regarding online proposition

20 March 2026

TheWorks.co.uk plc

("The Works", the "Company" or the "Group")

Update regarding online proposition; FY26 guidance maintained and FY27 guidance upgraded

The Works, the UK's leading specialist retailer of affordable, screen-free activities for the whole family, announces that the Board has taken the decision to cease trading of the Group's online channel and transition to a non-transactional website, with immediate effect.

Since 2012 The Works has operated as a multi-channel value retailer, with over 90% of sales driven by its profitable estate of more than 500 stores. The online channel had provided shopping convenience for customers and improvements were being made to the channel's functionality and profitability, driven by the Company's 'Elevating The Works' strategy.

Operational challenges experienced by two different third-party fulfilment partners significantly impacted the channel's performance in the last two financial years, outweighing the progress made. Given these issues, the channel's relatively small and reducing revenue contribution and loss-making performance⁽¹⁾, the Board assessed a wide range of options and has determined that the channel is no longer sustainable, with the optimal solution being to move to a non-transactional website.

New trading model

The website will serve as a shop window to The Works' brand and stores, enabling customers to browse its extensive value range of arts and crafts, stationery, toys and games and books online, and provide ideas and inspiration for customers to connect through affordable, screen-free activities for the whole family.

This transition will sharpen the Group's focus on its core strength as a successful bricks-and-mortar retailer by simplifying its operating model, reducing operating costs and freeing up capital to invest in its growing and increasingly profitable store business. The store estate offers significant growth potential, with ongoing like-for-like (LFL) sales growth and scope to expand the Group's footprint by a further 100 locations. A net 5 new stores are set to open in FY26, with a further 10 planned for FY27.

Guidance

The Board anticipates exceptional closure costs of around £2m, and that the online channel will be accounted for as a discontinued operation⁽²⁾. These exceptional costs will be recognised in FY26. The transition is anticipated to have a small negative impact on the Group's cash position in FY26 but will be broadly neutral by the end of FY27, with the closure costs offset by reduced working capital from lower inventory levels going forward. Longer-term, the decision to exit is expected to be cash flow positive.

The Group has continued to deliver a positive store performance, with LFL sales up 3.3% in the year-to-date, and remains on track to deliver FY26 pre-IFRS 16 Adjusted EBITDA of £11.0m in line with current market expectations. When adjusting for continuing operations only, FY26 guidance is restated to pre-IFRS 16 Adjusted EBITDA of £13.5m. In FY27, guidance is revised with current external expectations of £12.7m upgraded to £15.0m, reflecting improvements made to the core business and the removal of online losses.

Supported by the ongoing execution of its 'Elevating The Works' strategy, and mission to become the favourite destination for affordable, screen-free activities for the whole family, The Works also remains on track to deliver its medium-term EBITDA goal of at least £22.5m in FY30⁽³⁾. The Board is confident that this can be achieved from lower sales⁽⁴⁾ than the original £375m target due to the higher profit margin anticipated after discontinuing the online channel.   

Gavin Peck, Chief Executive Officer of The Works, said: "We have reached this decision after a thorough assessment of the options available and are confident that focussing on our successful bricks-and-mortar business is the right step to reduce risk, improve operational clarity and support long-term profitable growth. A website that enables customers to browse our products and seek inspiration will help to bring our brand to life and drive customers to our 500 stores.

"Our mission - to become the favourite destination for affordable, screen-free activities for the whole family - has never been more relevant and this, combined with ongoing delivery of our 'Elevating The Works' strategy, means we are well-positioned to achieve significant and profitable growth in the years to come."

This announcement contains inside information for the purposes of the retained UK version of the EU Market Abuse Regulation (EU) 596/2014 ("UK MAR").

Footnotes:

(1)  The Works' online channel has typically contributed less than 10% of sales, other than during the COVID-19 pandemic period when its stores were closed. During the FY26 financial year-to-date, online has contributed approximately 5% of total sales. In the year ended 4 May 2025, the online channel generated revenue of £24.8m and an operating loss £0.3m.

(2)  The closure costs will be accounted for as an adjusting item within the FY26 accounts.

(3)  FY30 goals as part of 'Elevating The Works' strategy - turnover of £375m and EBITDA margin of at least 6%, which equates to an EBITDA of at least £22.5m.

(4)  Lower sales solely due to the discontinuation of the online operation.

Notes for editors:

The Works is the UK's leading specialist retailer of affordable, screen-free activities for the whole family, providing customers with fantastic value across four product categories: arts and crafts, stationery, toys and games, and books. The Group operates a network of over 500 stores in the UK & Ireland.