Discount retailer The Works to list in £65.2m IPO

High street retailer The Works, which sells discount stationery, arts and crafts products and books, has announced its intention to list on the London Stock Exchange with an initial public offering worth £65.2m.

The listing will see the placing of 40.8m shares at 160p each, with £28.5m of the capital generated used to repay the company’s debts. Investec is the acting sponsor and broker in the admission.

“Today represents a significant milestone for The Works and we’re extremely pleased with the level of interest we’ve received from investors in our business. They’ve seen what our customers see every day — a unique and exciting retail experience that combines value, quality and variety that’s available online and in-store,” said chief executive Kevin Keaney.

The group, which has cited “chaos” and “magic” for its success to date, has over 447 stores and concessions across the UK as well as an online business, has seen revenue climb by 14 per cent to £189m over the past three years, and said it had opened a net 134 new outlets in the same time period.

The news comes at a time when many high street retailers are struggling, particularly those sensitive to the boom of online shopping. Many retailers have looked to decrease the number of bricks-and-mortar stores they operate in order to reduce overheads associated with staffing and real estate.

However, The Works said the opening of new stores was a “key driver of growth,” and it believed there were “up to 1,000 potential locations” across the UK and Ireland it could expand into. The majority — 91 per cent — of sales were made in stores in 2018.

Gross profit margins for the company rose from 17.9 per cent in the year to April 2017 to 19.1 per cent in the year to April 2018, while revenue rose 12 per cent.

In the 2018 financial year the group had 3,211 employees, of which approximately 72 per cent worked part-time. The Works said it intended to “enhance margins” through tight cost control, including employee costs and the negotiation of more favourable rental costs upon the renewal of leases.

Dealings begin on July 19.


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