Update on Store Reopening Plans

12 June 2020

TheWorks.co.uk plc

("The Works" or the "Company")

Update on Store Reopening Plans

As noted in the Company's Full Year Trading Update dated 7 May 2020, the Company has been putting in place plans to re-open its stores, which have been closed since 23 March.

Where permitted by government guidance the Company is planning to reopen all of its stores.  As part of this, the Company plans to re-open 465 stores across England, Northern Ireland and the Republic of Ireland next week and will look to re-open its remaining stores in Scotland and Wales as soon as possible thereafter.

The health and wellbeing of colleagues and customers has been a key priority as the Company has prepared to re-open its stores.  The Company is following government safety guidelines and each store will undertake a comprehensive risk assessment, to ensure it is COVID secure, ahead of re-opening.  The measures put in place include appropriate social distancing protocols (e.g. limiting the number of customers in store and providing floor stickers to highlight the social distancing rules), the installation of perspex screens at till points and encouraging good hygiene in-store (e.g. providing cleaning stations, encouraging regular hand washing and the use of hand sanitiser).  These measures have been supported by comprehensive guidance and training for all colleagues. Appropriate measures have also been put in place at the Company's retail distribution centre to ensure that it is COVID secure as an increasing number of colleagues have returned to this facility in recent weeks.

Recent trading

As previously reported, The Works has seen very strong demand for its online offering since the start of the lockdown period on 23 March, with sales continuing to be up more than three times compared to the equivalent period last year, demonstrating the strong appeal of its online product and proposition.  Online fulfilment capacity has been expanded in the short-term to help satisfy increased sales volumes, whilst ensuring adherence to social distancing and additional health and safety measures within its fulfillment centre.  The Company is continuing to work closely with its third-party fulfilment partner with a view to further increasing capacity levels through peak trading over Christmas 2020.

Cost base and cashflows

The Company's announcements of 23 March and 7 May 2020 set out a number of measures which have been implemented to help manage the Company's cost base and cash flows.  Those measures will continue, although the level of costs will increase compared to recent months when the majority of furloughed colleagues return to work as stores re-open.

Financial position

Further to the Company's announcement of 7 May 2020, the Company continues to have constructive dialogue with its lending bank and expects the greater certainty around the timing of store openings to assist in these discussions.  The Company continues to have access to a £25m revolving credit facility (expiring in June 2021) and the Board continues to believe that the Company has appropriate liquidity in place.

Senior management personnel change

The Company is pleased to announce that Stephen Alldridge has joined the Company on an interim basis as CFO to cover for Rosie Fordham who will be taking maternity leave.  Stephen, who qualified as a chartered accountant with EY, has over 20 years' experience of working in retail, most recently as CFO of Bonmarché Holdings plc.

Outlook

The Board continues to be confident in The Works' proposition and the re-opening of its stores significantly improves its trading outlook.  However, with the impact of social distancing on returning shoppers still unknown, it is not possible to provide meaningful guidance for the current financial year.  The Company will include an update on recent trading in its Preliminary Results announcement which is expected to be made in late August or early September 2020.

Enquiries:

Notes to Editors:

TheWorks.co.uk plc is a multi-channel value retailer of gifts, arts, crafts, toys, books and stationery - offering customers a differentiated proposition as a value alternative to full price specialist retailers.  The Works sells its quality products at affordable prices across four product zones comprising Kids; Arts, Craft & Hobbies; Stationery; and Family Gifts, which are supplemented by both seasonal and regional offerings.

As at 12 June 2020, the Company operated a network of 534 stores in the UK and Ireland.  Stores can be found on high streets, in retail parks, shopping centres, factory outlets and as concessions in various locations.  The Works also has a significant and growing online presence that enables customers to shop any time of the day, with an extended range of products not available in stores.  This multi-channel offering is one of the first of its kind in the value retail sector and includes a popular Click & Collect service, driving additional footfall and sales in store.