Sosandar sales continue to surge as losses shrink
Sosandar had a good half-year (the period to the end of September), it said on Wednesday. Revenue surged 52% and its EBITDA loss saw “a substantial improvement”, although it didn’t give a specific figure for that loss.
Revenue reached £4.3 million in the period and the company said that the sales momentum it has seen in Q1 and July continued into August and September. Revenue also rose by 7% in August compared to July and by 54% from August to September.
The company said that initial trading of the label with John Lewis and Next’s webstores has been "very promising" and the early ranges have already been expanded.
Year-to-date returns also seem to be continuing at a healthy rate as they had done earlier in the year, with a returns rate of 42% compared to 49% a year ago. This lower level of returns is something other online retailers have mentioned as a consequence of pandemic shopping habits.
Sosandar maintained a strong gross margin of 52.3% in the half, which may have been lower than the 53.6% of H1 2019, but was good in the circumstances and was “driven by actions in the early weeks of lockdown to address the impact of Covid-19”.
The company said its revenue growth in the half represents “a strong performance in a challenging trading environment, highlighting [its] in-depth knowledge of its customer base and its agility in quickly adapting to changes in the market”.
In fact, the pandemic period was clearly a strong one for the firm as repeat orders for the period increased by 88% on the prior year and it saw a 26% increase in new customers, despite marketing spend decreasing by 49%.
The performance in August, which is usually a seasonally quiet month, was good, driven by a high proportion of repeat orders “with strong demand for full-price high summer products”. It also saw record trading on two days in September, as well as record monthly sign-ups to the customer database.
The business returned to a limited amount of TV advertising in September, as well as investment in direct mail brochures, to complement existing social and email marketing campaigns. This “has delivered excellent initial results” as that 54% September revenue increase figure shows.
It now plans to continue with “carefully controlled customer acquisition in October and November in order to drive further growth in its database whilst also focusing on efficiencies and preserving cash”.
Sosandar added that its investment to broaden its product range has paid off. It said the autumn range is “resonating well with customers and the company is benefiting from the first full peak trading season of knitwear, denim, loungewear and casual outerwear, with many sell-out styles in these categories”. Leather and faux leather are also trading well, as are separates, such as tops, trousers and leggings.
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