Supply chain outlay won't hit profits, says The Works

UK discount retailer The Works says “significant additional costs” it incurred in a bid to shore up its supply chain will not affect full-year profits expectations.

The Works sells books, art and craft materials, gifts, toys, games and stationery. It has 526 stores across the UK and Ireland.

The company, which has its HQ in Birmingham, said it had been affected by “shortages of ocean freight and UK haulage capacity”, despite attempting to secure its supply chain earlier this year with considerable investment.

In its half-year trading update for the period ending October 31, the firm said trading has been stronger than expected. Online sales have continued to be about double those in the comparable 2020 period.

The Works relies on 500 suppliers

The company has developed relationships with around 500 suppliers across Europe and Asia. The group’s main distribution and warehousing facility is in Birmingham. The fulfilment of online sales is undertaken on its behalf by a third-party distribution partner, based in Rugby.

The Works CEO Gavin Peck said: "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.

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

"It's clear from these results that our products resonated extremely well with customers during the pandemic.

"It's pleasing to see that while our online sales continue to run at almost double their pre-pandemic levels, store sales are also growing.”