Sosandar still riding high as sales soar and profitability continues
Sosandar’s latest update — for the half-year to the end of September — showed that the company is still seeing trading “in line with FY23 market expectations”.
Revenue for the womenswear retailer was up 72% year on year and it saw its second six-month period of positive pre-tax profit.
Net revenue rose to £20.9 million, and pre-tax profit was £0.1 million after “a substantial positive swing” compared to a £1.08 million loss in H1 FY22.
Analyst expectations for the business are that the full year, which ends next March, will see revenues of £42.8 million, EBITDA of £2.2 million and pre-tax profit of £2 million.
The company said “trading throughout H1 FY23 has been strong. This performance, set against a challenging macroeconomic backdrop, illustrates that Sosandar has a proven, agile model and continues to execute successfully in line with its stated strategy”.
Active customers were up 33% to 254,601 and the number of orders increased on Sosandar.com by 43% to 347,137, of which 80,935 were new orders and 266,202 were repeats. Average order frequency was up 8% to 2.41 times, average order value up 4% to £90, and website visits rose 25% to over 7.7 million. Meanwhile, the conversion rate also increased to 4.5% from 3.9% a year earlier.
But the gross margin at 54.4% was down from 56.5%, “reflecting a more normal post-Covid trading period with a planned end-of-season sale in August”.
Sosandar also said that its strategy to accelerate sales growth by identifying and fast-tracking the development of key product lines “has been successful with all identified lines meeting or exceeding our expectations”. Across the period, every single product category was in growth, “with holiday and beach wear, formal tailoring and dresses performing exceptionally well throughout summer and into September”.
It also added that trading on its own website and through its concession partners has been strong “as the greater depth and breadth of stock made available across all product categories has resonated with consumers”. The company continues to grow its scale and customer loyalty “and is now a key strategic partner of its three major third-party retailers, M&S, Next & John Lewis,” as well as seeing “strong success” with more recent partner The Very Group.
And it has just launched a new partnership with N Brown Group’s JD Williams on a wholesale agreement basis.
In order to meet “significant demand across all sales channels and to ensure that it has high levels of stock ready” for AW22, it has taken steps to increase levels of inventory. Early autumn trading has been “very positive with particular success in key growth areas of outerwear, knitwear and partywear”.
It remains confident despite the “high degree of external economic uncertainty,” but expects consumers to “become more selective about where they spend and also more demanding of those brands with which they spend”.
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