The Works has stopped sales through its loss-making online shop to focus on its stores.
Shares in the books, stationery and crafts retailer jumped on Friday morning as investors welcomed the shift in strategy.
The retail firm said it has shut down sales through its website with immediate effect.
It will continue to run an online platform but will make this “non-transactional”, focusing on displaying products to be bought in stores.
The group said operational challenges linked to two different third-party fulfilment partners “significantly impacted” its online performance over the past two years, outweighing its online progress.
As a result, the group’s board assessed a number of options for the loss-making division before deciding it was “no longer sustainable”.
Bosses said shutting down online sales will lead to closure costs of around £2 million.
It added the deal, which is understood to impact a very small number of employees, will have a “small” negative impact on its cash position in the current financial year.
The Works said the move is likely to be cash flow positive in the longer term.
Bosses said the chain is continuing to deliver strong trading in stores, with like-for-like sales up 3.3% in the year to date, with earnings set to meet current forecasts.
It also hiked its earnings guidance from £12.7 million to £15 million for the next financial year due to improvements in the core shops business and the removal of online losses.
The retailer’s strategy will see it focus on continuing to grow its high street stores business.
The Works is opening five net new stores this financial year, after highlighting the potential scope to open as many as 100 more sites.
Gavin Peck, chief executive of The Works, said: “We have reached this decision after a thorough assessment of the options available and are confident that focusing on our successful bricks-and-mortar business is the right step to reduce risk, improve operational clarity and support long-term profitable growth.
“A website that enables customers to browse our products and seek inspiration will help to bring our brand to life and drive customers to our 500 stores.”
The Works shares lifted by 13.8% on Friday morning.
