The Works CEO: How the Brand Is Betting Big on Bricks-and-Mortar

Why It Matters

The move flips the prevailing digital‑first narrative, showing that a focused brick‑and‑mortar model can still drive profitability for discount retailers and reshape investment priorities in the sector.

Key Takeaways

• Over 90% revenue now from physical stores.
• Ecommerce removed due to costly third‑party fulfillment.
• EBITDA guidance remains at £11‑13.5 million FY26.
• Targeting 600 stores, 15 new openings by FY27.
• Stores positioned as discovery hubs for screen‑free activities.

Pulse Analysis

The Works’ decision to scrap its online sales channel runs counter to the industry’s usual push toward omnichannel growth, but the retailer’s economics tell a different story. With a product mix dominated by low‑priced books, toys and crafts, the cost of third‑party fulfillment eroded margins, making a non‑transactional website the most viable option. By concentrating capital on its 500‑plus high‑street locations, The Works can leverage the tactile discovery experience that drives impulse purchases—something a digital catalogue struggles to replicate.

Financially, the shift is expected to lift profitability and improve cash flow. The company reaffirmed its FY26 pre‑IFRS 16 adjusted EBITDA target of £11 million, with continuing‑operations EBITDA of £13.5 million, and projects a neutral cash position by FY27 after accounting for store‑related closure costs. Removing the online loss‑making segment frees up working capital, reduces inventory holding costs, and allows the firm to reinvest in store upgrades, staff training, and localized product assortments, all of which should enhance same‑store sales momentum.

Strategically, The Works is using the freed‑up resources to accelerate its “Elevating The Works” programme, aiming to reach 600 stores by targeting under‑served retail parks and city centres. New openings in locations such as Preston Deepdale and Glasgow Fort will broaden geographic reach, while tailored product ranges for university towns and family‑focused malls promise higher basket values. Coupled with a renewed focus on brand marketing around affordable, screen‑free activities, the retailer is positioning itself as a destination rather than a mere discount outlet, a model that could inspire similar high‑street players facing digital cost pressures.