A super-soft foam toy has put the squeeze on sales at arts and crafts retailer The Works.
The Squishy phenomenon had been a big hit for the 525-shop chain in 2018 – but has now fallen out of favour.
The Works said sales fell 3.6% six months to 27 October as kids shunned Squishies and also slime. Excluding these mega trends, sales fell 1.9%.
However, the firm reduce its pre-tax losses for the half-year to £8.5m, from £9.1m previously.
Christmas trading was also better, with like-for-like sales rising 1.5% in the 11 weeks to 12 January. That helped to boost The Works’ share price by more than 8% in early trading on Thursday.
The company also announced that chief executive Kevin Keaney was stepping down after nine years, with finance chief Gavin Peck taking over.
Squishies probably are not to blame for his departure, though. The discount retailer has been struggling for a while, and Mr Keaney’s decision to go comes two months after the firm issued its second profit warning.
The Works said it was putting new store openings on hold as part of “action to refocus our strategy” and “focus on cost savings”. There has also been a slower start to post-Christmas trading, leading to increased discounting, the company said.
Mr Peck said in a statement: “We remain confident in the prospects for the company with the business trading-in line with the board’s full-year expectations.”
Analysts at Investec said the Christmas performance would “go some way to restoring investor confidence” in the company.
“We believe… there is a niche on the High Street for a family friendly format like The Works,” the analysts said in a research note.
Get more stuff like this
Subscribe to our mailing list and get interesting stuff and updates to your email inbox.