Discount book chain The Works was placed into administration yesterday afternoon. Administrator Kroll confirmed the news this morning, saying the decision was taken following "cash flow difficulties" after "challenging trading conditions and ever increasing competition within the retail industry".
The Works is the largest bargain book chain in the UK, with 317 stores. Last year it acquired the 26-store David Flatman chain, which was placed in administration in January 2007. It employs 1,600 staff.
Kroll partner Peter Saville reassured customers that it was "business as usual" for the stores. "The trading environment for all retailers is particularly tough at present but we are continuing to trade the business as a going concern," he said. "These stores have a strong brand identity and are predominantly situated in excellent retail locations. Although the retail sector as a whole will face some challenges in the coming months, there are still plenty of opportunities to succeed and as such, we are very hopeful of securing the future of the business.
“We fully appreciate that this is a concerning time for employees and we will keep all stakeholders as fully appraised as possible.”
The Works reported turnover for the year to end-April 2006 of £92.3m, with operating profit declining by 34% to £3.2m from £4.3m, and profit after tax falling to £2.1m from £3m.