The Works swings to annual loss after pandemic impact

The Works has swung to an annual loss after being weighed down by impairment charges caused by the pandemic.

But the books and stationary retailer told investors on Thursday it has seen initial sales from stores which reopened in June exceed management expectations.

It reported a pre-tax loss of £18 million for the year ended April 26, compared with a profit of £2.3 million for the previous year.

The slump was driven by non-cash impairment charges resulting from Covid-19 of £19.5 million, relating to goodwill and downgrades in the value of its stores, it said.

Revenue for the year increased by 3.5% to £225 million as it was buoyed by online and in-store growth before the pandemic hit.

In the 17 weeks to August 23, the retailer said total sales were down 26%, but this was ahead of trading forecasts.

Chief executive Gavin Peck said the company has been “encouraged” by trading after the lockdown lifted, and will focus on improving online capacity.

He said: “The closure of our entire store estate in March had a significant impact on our business, however we responded to the crisis with agility and were ready to bounce back once safe to do so.

“Our decisive action in response to the Covid-19 pandemic enabled us to protect colleagues and customers, meet the significant increase in online demand, and minimise the financial impact.

“Our performance during the pandemic shows our customer proposition is more relevant than ever and despite the significant uncertainty that remains, the board continues to believe that we have many exciting opportunities ahead of us that will enable us to deliver value for all of our stakeholders in the long-term.”