The Works incurs ‘significant’ costs amid supply pressures

The Works has suffered “significant” costs as a result of disruption in the shipping and distribution of products but said it believes it is sufficiently stocked for Christmas.

Shares in the company dipped on Friday after it highlighted the impact of supply chain issues facing the retail sector.

Nevertheless, the firm, which specialises in books, crafts and stationery, said it expects trading for the current year to be in line with expectations “despite incurring higher freight costs”.

The Works said it has seen early signs of positive Christmas sales but it “is being affected by the widely reported shortages of ocean freight and UK haulage capacity”.

In order to minimise the impact of this, the company said it secured deliveries earlier in the year and has therefore built up the necessary stock to achieve its Christmas sales plans.

However, it admitted that this has resulted in “significant additional costs”.

It came as The Works revealed that trading over the 26 weeks to October 31 was better than expected, with a 14.5% increase in like-for-like sales against the same period in 2019.

Chief executive Gavin Peck said: “It’s clear from these results that our products resonated extremely well with customers during the pandemic, helping them to read, learn, play and craft through lockdown.

“Our strong sales in recent months demonstrate that demand has been maintained and customers continue to value our offer.

“It’s particularly pleasing to see that, whilst our online sales continue to run at almost double their pre-pandemic levels, store sales are also growing.

“Looking ahead, we have a fantastic range of products for our customers this Christmas, with initial demand for them already very strong.

“We are cautiously optimistic about prospects for our peak sales season and our ability to trade through the ongoing supply chain challenges faced by the majority of our sector.”

Shares were 3% lower at 55.56p on Friday morning.