admin For the first six month period, Sosandar net revenues increased by 6 percent to 22.3 million pounds, while gross margin improved to 55.8 percent.
The company said its pre-tax loss reached 1.3 million pounds driven by lower revenue following the trialled reduction in promotional activity in the second quarter.
Sosandar intends to operate its reduced promotional proposition across all sales channels by the time the company’s stores launch in spring 2024. The company’s aim is to begin delivering significantly higher gross margins, putting the company on a trajectory to deliver pre-tax profit margins of at least 10 percent in the medium-term.
The company expects revenue to grow by 10 percent in FY24 to 46.8 million pounds and to remain in profit during the transition. It expects revenue in the year ending March 31, 2025 to grow by 17 percent to 54.6 million pounds with an upward trajectory in profitability.
Commenting on the trading update, Ali Hall and Julie Lavington, the company’s co-CEOs said in a statement: “Whilst we do expect to see a short-term impact as we transition the business to offer less promotional activity, we still expect to be in growth and remain profitable.”
Highlights of Saosandar’s current trading
The company added that autumn trading has started well despite the unseasonably warm weather in September. Net revenue for the week commencing October 9, 2023 was the highest on record excluding black Friday and the highest ever for gross margin.
Sales on Sosandar.com are in line with the results of the Q2 trial, with margin and AOV significantly increased, and orders and revenue aligned to the company’s expectations of the new reduced promotional plan.
The company further said that sales through third party partners have also been very strong with Next and M&S in particular having a great start to the autumn season. The Sainsbury’s fashion concept stores, which went live over the first two weeks of October with a wide range of Sosandar products are selling well in all of the nine stores. In addition, the partnership with Freemans, which launched in September, has also had a very strong start to trading with Sosandar.
Sosandar to drive growth through physical stores, international tie-ups
By spring 2024, the Company expects to have opened its first identified stores in the UK in affluent towns with thriving high streets where Sosandar customers over-index. To drive growth through physical stores, the company is hiring additional store expertise. In addition, the company will be investing in technology, including EPOS systems, to ensure that the customer journey, both online and offline, is seamless.
“We are extremely excited about the next stage of our growth journey. Our decision to open our own stores is the logical next step as we look to offer our customers more ways to engage and shop with Sosandar. We know that the added value of being able to touch and feel our clothes will appeal to our target customers,” added Hall and Lavington.
Sosandar recently launched with Global-e, the world’s leading platform to enable and accelerate global, direct-to-consumer, cross-border ecommerce. The company now transacts and fulfils orders worldwide to over 60 countries in a cost-effective manner. Sosandar has also signed new agreements with two large international third-party partners: The Iconic in Australia and The Bay in Canada, which will launch during H2 FY24.
