The Works just killed its online channel. And the numbers say it probably should have done it sooner. The works is a toy, art and craft retailer, a tough category and a very seasonally focused one too.
I am Jack’s Smirking Revenge. Rick, we are on the same cycle. Can you name the character Ed Norton played in Fight Club? Me neither. Picture this. You’re on a plane, sitting next to a guy who works in claims assessment for a major automotive manufacturer. Quiet guy. Seems pleasant enough. Then he opens his laptop.
He pulls up a spreadsheet. Starts explaining his job.
“A car’s fuel tank spontaneously ignites on rear-end impact. We need to run the numbers. Is it cheaper to recall the cars, or just pay the settlements when people burn?”
That’s Ed Norton in Fight Club. That’s the whole moral architecture of the movie, delivered in a middle seat over a bag of peanuts.
And that’s essentially what The Works just did with its ecommerce operation. Except they ran the numbers and for once, withdrawal won. I wonder what would happen if everyone did this.
THE NUMBERS JUST HURT
Let’s do the claims assessment. According to Retail Gazette, since launching ecommerce back in 2012, The Works has seen more than 90% of its sales come from physical stores over 500 of them across the UK and Ireland with online remaining a marginal contributor despite more than a decade of investment. A decade. Of investment. For single-digit share. Worth getting outta bed in the morning.
In FY25 (year to May 2025), The Works posted a 58% jump in adjusted EBITDA to £9.5m but online sales dropped 12.1%, impacted by capacity constraints at its third-party fulfilment provider. Total revenue fell 2% to £277m.
Go back a year to H1 FY25, and online sales had already declined 14.7%, which the company attributed to a “planned reduction in promotional activity” plus operational difficulties at a third-party fulfilment centre. Planned. They were already pulling back.
The online channel wasn’t shrinking due to neglect. It was being strategically deprioritised because the numbers made the case. The decision to exit followed a review of the channel’s long-term viability, with ongoing operational challenges across two third-party fulfilment partners cited alongside what the business described as a relatively small and loss-making revenue contribution.
Now for the forward-looking actuary math: FY27 EBITDA expectations have been upgraded from £12.7m to £15m, with the group targeting medium-term EBITDA of at least £22.5m by 2030 specifically following the removal of ecommerce losses.
Here is the rub, as they say.
