Books chain The Works suffering after cyber attack and cost rises | City & Business | Finance

The Works also said it had suffered the knock-on impact of a cyber attack on the business at the end of March. In an update yesterday, it said: “The general market outlook has deteriorated since the beginning of the calendar year, with low consumer confidence and rising inflation being significant factors.”

“It is not clear how long these market conditions will persist, which creates a heightened degree of uncertainty about how consumers will behave, particularly in the Christmas shopping season, The Works’ most important trading period.”

The downbeat forecast came despite the company revealing that profits for the year to May 1 would be around £16.5million – about £1.5million better than expected.

The firm also said it was reinstating its dividend. But it said although the cyber attack had only forced the chain to close five of its 526 stores, “action taken to secure the business had a residual impact on store and online trading.”

Shop sales in the 13 weeks to the end of July rose by 1.4 percent.

But a 28.6 percent dive in internet trade was blamed on a “challenging consumer environment”, affecting online more than physical stores.

Gavin Peck, chief executive of The Works, said: “Since the start of the financial year we have faced the residual effects of the cyber security incident and increasingly challenging trading conditions.”

He added: “Although the near-term market conditions are very uncertain, we are confident that our ‘better, not just bigger’ strategy still has a lot more upside to deliver in the medium term.”

Before yesterday, shares had fallen by more than a third in the year to date.

The pandemic saw sales surge, as lockdown gave households more time on their hands to try new arts and crafts. Sales over last Christmas hit a record high, despite rising shipping costs and supply chain disruptions in November.