Jun 9, 2020
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Sosandar thrives in lockdown, adds deals with John Lewis and Next

Jun 9, 2020

Womenswear e-tailer Sosandar said it has been delivering revenue growth in the unprecedented lockdown environment as well as making cost savings.


The listed business, which had been growing fast pre-pandemic despite being at an early stage and still loss-making, said that even with all the challenges, “it has responded well to a period of significant disruption and uncertainty”. It has been able to react quickly, maintain service throughout and deliver continued revenue growth in the first two months of the current financial year (1 April to 31 May). This is despite a “significant reduction” in marketing spend and “demonstrates the benefit of having a larger customer database as a result of previous customer acquisition expenditure”.

It has all has translated into order growth of 44% year-on-year and revenue up 62% in the past two months. And those two figures are particularly interesting given that the wider online UK fashion market has seen order values falling, despite rising volumes so Sosandar has clearly been able to drive value higher during the lockdown.

Not that its order values have actually been up as it said basket sizes have been smaller. But with fewer items being returned (returns are down 33%), those smaller baskets are still resulting in higher revenues.

More good news comes with its new customer acquisition being up 15%, despite a reduction in marketing spend of 69%.

The firm has also seen a year-on-year “bottom-line improvement, with a 55% reduction in loss” and it has announced some key developments too. Agreements have been reached with John Lewis and Next to go live on their online platforms for AW20 and the addition of Klarna to the website is providing an extended payment option for customers.

Style-wise, the company said it has seen a shift to more casual ranges “as customers seek out comfort with fewer social occasions calling for more formal product types. As a result, the business quickly changed new-in products to meet these changing needs. It has had a number of loungewear items, denim and casual summer dresses that have “sold out in days and quickly repeated, as well as benefiting from customer waitlists, which ensure quick sell-through”.

These product types naturally have lower retail prices, which has led to lower average unit values and therefore lower basket values, as mentioned above. But selling looser, less fitted items has meant there are fewer sizing issues, leading to the aforementioned reduction in returns.

The company also said browsing behaviour has increased, with traffic up 98% year-on-year. But “the nature of this search activity has meant lower levels of conversion as customers are either browsing as a pastime or making more considered purchase decisions”. However, it has still seen spikes in conversion following marketing emails and new-in product notifications, “showing continued engagement with the brand”.

The e-tailer also issued a preliminary report for the year to March 31 saying revenue will be at least £9 million, which represents over 100% revenue growth. Repeat orders rose 144% and its active customer base was up 111%. Average order value for the period was down 6%, reflecting the mild winter and the impact this had on the product mix.

The company said its cash flow remains strong. It had £5.2 million at the end of March, £4.4 million at the end of April and the same at the end of May. 

It’s been managing costs carefully, cutting back on marketing spend and managing stock levels. It also said “warehousing and fulfilment costs [have been] successfully flexed to the changing demand needs as the company continues to benefit from the expertise of Clipper Logistics”.

All discretionary expenditure has been frozen and around 60% of its workforce has been furloughed while board members have also taken lower payments.

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