- Womenswear brand’s Q1 sales surge 81%
- On course for pre-tax profits breakthrough
- Sees strong trading with third party retailers
Shares in Sosandar (SOS:AIM) rallied 4.7% to 19.4p after the fast-growing online women’s fashion brand reported record annual results and second half profits, with a ‘very strong start’ to its new financial year flagged.
While fashionwear shoppers are facing a cost-of-living squeeze, Sosandar’s first quarter revenue rose 81% year-on-year to £10.4 million, a record quarterly performance for the ambitious womenswear brand.
There was also relief as Sosandar expressed confidence in meeting market expectations for the year to March 2023, with analysts calling for sales of £42.5 million and a pre-tax profits breakthrough to the tune of £1.9 million.
SUSTAINED PROFITABILITY
According to Sosandar’s management, the period to March 2022 proved a ‘milestone year’ with results beating market expectations that were upgraded in April. Sosandar has now delivered nine consecutive months of profitability.
Sales grew by an impressive 142% to £29.5 million, including three consecutive months of record revenue in September, October and November 2021, driven by a greater number of active customers, more frequent purchases and a small uptick in average order value.
Sosandar’s pre-tax loss improved from £3.1 million to £600,000, with the retailer trading profitably in every month of the second half.
Larger online fashion retailers including ASOS (ASC), Boohoo (BOO:AIM) and Zalando (ZAL:ETR) have struggled with supply chain issues and cash-strapped shoppers cutting spending on non-essential clothing amid rising inflation.
Yet smaller, more agile player Sosandar has successfully navigated these headwinds by ‘fostering strong, long-term relations with a number of manufacturers in different territories, pivoting rapidly between transport methods and responding rapidly to changing consumer sentiment’, according to chairman Bill Murray.
STRONG START TO 2023
Every month in Sosandar’s new financial year has been profitable and it has seen strong sales of workwear, occasion wear and holiday clothes.
The company also highlighted continued strong trading with its third party partners John Lewis, Marks & Spencer (MKS) and Next (NXT), with Sosandar’s wares ‘resonating very well across all types of product category’.
In a significant development for future growth, the womenswear brand has extended its relationship with Next.
Sosandar products are now being sold through Next’s ‘Platform Plus’, which allows Next customers to order items picked from Sosandar’s warehouse hosted by logistics specialist Clipper, which are then delivered via Next’s distribution network.
In March 2022, Sosandar also kickstarted an exciting wholesale deal with online retailer Very and ‘immediately’ saw strong sales and quick repeat orders being placed.
Co-CEOs Ali Hall and Julie Lavington commented: ‘With the arrival of spring and summer, we have seen our customers seek out a wide variety of product, in particular smart clothes for work, bright colours for holidays and investment pieces such as leather.’
Looking ahead, Hall and Lavington are ‘excited for the next stage of our growth. Our winning formula is evident in our results and over the next year we will focus on expanding our product range and continuing to drive growth through our own site and third parties.
Return rates are in line with our expectations across the product range and our costs continue to be carefully managed. We continue to expand and diversify our supplier base to support our growth expectations whilst further mitigating risk.’
