Bargain shop chain with 506 branches closes string of stores with two more to come as part of strategy update
A BARGAIN retailer with 506 branches across the UK has shut a string of stores with two more planned as part of a change of strategy.
The Works‘ new strategy, unveiled alongside its latest company results this morning, focuses on streamlining its property portfolio to ensure it’s in the best locations possible.
Three of the closures have already been quietly executed, with branches in Iver, Elgin, and Heighley Gate shutting down.
And two more stores are set to close before the end of April, but the retailer is keeping tight-lipped about the locations for now.
However, it’s not all doom and gloom.
As part of the new strategy, the bargain chain is also planning to open several new stores, while other branches will be relocated to better spots or simply renovated.
Since May 2024, The Works has opened three new stores, with another set to launch in Cirencester next month.
The report revealed that the retailer is aiming to open five stores in the next financial year, with 60 new locations planned over the next five years.
The changes come as the Works looks to strengthen its position on the high street amid challenging conditions for retailers.
Many retailers have seen a drop in footfall since the pandemic which, coupled with rising bills, has impacted their revenues.
What is The Works’ new strategy?
The Works, known for its arts, crafts, toys, books, and stationery, has been reviewing its 506-store portfolio to ensure it is in the most strategic locations.
A spokesperson for The Works explained: “We constantly review our property portfolio to ensure we have the right mix of stores in the right locations to best serve our customers.
“This occasionally means closing stores, whilst also improving our stores with refits or relocations if a more favourable site becomes available, as well as opening new stores too.
“As announced in our half-year results today, we have five planned closures between November 2024 and April 2025, one relocation and one new opening.
“We are in the process of building a new store pipeline which will see us return to modest growth in the store estate, with a net five new stores being targeted in the next financial year.”
While the closures will be disappointing for shoppers in affected areas, they form part of a long-term plan to strengthen the business.
Last year, The Works pulled the plug on its Berwick-upon-Tweed store in Northumberland after failing to secure a lease agreement, marking another blow to its high street presence.
In its latest financial update, the retailer revealed modest revenue growth of 1.3%, bringing total takings to £124.2million.
However, the gains were partly offset by a 0.8% dip in like-for-like sales, although the company insisted this was “in line with expectations.”
The online side of the business took a slightly bigger hit, with sales plummeting by 14.7%.
Tough retail climate
The closures and mixed results highlight the relentless headwinds battering retailers as the cost-of-living crisis continues to bite into consumer spending.
While inflation is showing signs of easing, businesses are still battling rising costs, competitive pressures, and the looming challenge of higher wages.
Despite these challenges, The Works is betting big on its newly unveiled growth strategy.
The plan sets out ambitious targets, including hitting £375million in sales within five years, refining its store footprint, improving customer convenience, and ramping up efforts to broaden its brand appeal.
While store closures are always disappointing, this strategy could be good news for shoppers as it means The Works is committed to maintaining a strong presence on the high street in the long run.
Shoppers in areas where closures are planned should keep an eye out for updates, while those in Cirencester can look forward to a new store opening in February.
Budget changes add pressure for retailers
Recent government changes has worsened the already difficult climate for retail businesses.
In her statement, Chancellor Rachel Reeves announced that the Government is hiking employer National Insurance Contributions (NICs) and the National Living Wage.
This will increase the cost for businesses, who have already struggled to attract customers during the cost of living crisis.
ShoeZone was one of the first retailers to blame the Budget for store closures.
ShoeZone has begun to close “unviable” branches after its costs increased.
It said: “These additional costs have resulted in the planned closure of a number of stores that have now become unviable.”
The challenging climate has forced some of the biggest retail giants out of the British high street.
WHSmith has confirmed it will close 18 stores for good in coming months.
The company said it will be moving away from its high-street stores and has no plans to open any more.
Instead, the retailer is focusing on the travel side of its business, where sales are growing.
Meanwhile, Homebase will close 13 stores this month after it fell into administration in November.
The company will shutter shops in Cheltenham, Coventry, Romford and Wolverhampton.
CDS, which owns The Range and the Wilko brand has stepped in and said it will take over 70 Homebase locations.
This weekend alone, five popular chains will close stores, leaving shoppers without local favourites and dozens of workers facing an uncertain future.
Why are retailers closing stores?
RETAILERS have been feeling the squeeze since the pandemic, while shoppers are cutting back on spending due to the soaring cost of living crisis.
High energy costs and a move to shopping online after the pandemic are also taking a toll, and many high street shops have struggled to keep going.
However, additional costs have added further pain to an already struggling sector.
The British Retail Consortium has predicted that the Treasury’s hike to employer NICs from April will cost the retail sector £2.3billion.
At the same time, the minimum wage will rise to £12.21 an hour from April, and the minimum wage for people aged 18-20 will rise to £10 an hour, an increase of £1.40.
The Centre for Retail Research (CRR) has also warned that around 17,350 retail sites are expected to shut down this year.
It comes on the back of a tough 2024 when 13,000 shops closed their doors for good, already a 28% increase on the previous year.
Professor Joshua Bamfield, director of the CRR said: “The results for 2024 show that although the outcomes for store closures overall were not as poor as in either 2020 or 2022, they are still disconcerting, with worse set to come in 2025.”
It comes after almost 170,000 retail workers lost their jobs in 2024.
End-of-year figures compiled by the Centre for Retail Research showed the number of job losses spiked amid the collapse of major chains such as Homebase and Ted Baker.
It said its latest analysis showed that a total of 169,395 retail jobs were lost in the 2024 calendar year to date.
This was up 49,990 – an increase of 41.9% – compared with 2023.
It is the highest annual reading since more than 200,000 jobs were lost in 2020 in the aftermath of the COVID-19 pandemic, which forced retailers to shut their stores during lockdowns.
The centre said 38 major retailers went into administration in 2024, including household names such as Lloyds Pharmacy, Homebase, The Body Shop, Carpetright and Ted Baker.
Around a third of all retail job losses in 2024, 33% or 55,914 in total, resulted from administrations.
Experts have said small high street shops could face a particularly challenging 2025 because of Budget tax and wage changes.
Professor Bamfield has warned of a bleak outlook for 2025, predicting that as many as 202,000 jobs could be lost in the sector.
“By increasing both the costs of running stores and the costs on each consumer’s household it is highly likely that we will see retail job losses eclipse the height of the pandemic in 2020.”