Half Year Trading Update
28 October 2019
Investment in marketing, product and team delivers accelerated growth
Sosandar PLC (AIM: SOS), the online women's fashion brand, is pleased to announce the following trading update covering the six month period ended 30 September 2019.
The Company expects to report revenue of £2.82 million for the period, a 53% increase against the same period in the prior year, reflecting progress made during the year so far, with Q2 up 84% and September up 112% against the same periods in the prior year. The Company is very pleased to report that October is already the first month that its net revenues (post returns) have surpassed £1 million. As previously reported, the Company made the strategic decision in Q1 to hold back customer acquisition funds to invest in future months, whilst also investing into product teams to help drive performance from Autumn/Winter 2019 onwards.
Acquisition funds have now been successfully deployed and this, combined with the up-front investment in team and product, have resulted in substantially higher growth in the important Autumn period. Record monthly revenues were delivered in September, which has been surpassed by October which is tracking over 100% up on the prior year and 44% up on this September.
July's oversubscribed placing has supported the Company's accelerated growth as planned. The Company has begun carefully using the proceeds to strengthen its design capability, widen the product range and to trial additional marketing channels. Sales during the period have been strong across all product categories, and especially in the new product areas such as denim. Average order value has shown a marginal decrease due to average unit price shifting slightly with the broadening of the product offering, selling proportionately more denim and jersey. Units per basket has increased year on year. Entering Q3, the Company expects to continue with strong full price sales performance and expects some increase in AOV as the cold weather drives sales of higher price point items such as leather and outerwear.
As announced at the Company's AGM, in September the Company began to use TV advertising and started to trial the use of out-of-home digital media for the first time. This has included testing in different TV regions, channels and programmes with re-investment into those showing the best engagement versus cost ratio and a test with digital panels across escalators at key London train and Tube stations. These new marketing initiatives are significantly increasing brand recognition and awareness. September, the first month TV went live, saw a record number of email subscriber sign-ups with a 224% increase on August and the equivalent to approximately six months' performance in the prior year.
Given the strong current trading and the very positive results achieved so far, the Board has taken the strategic decision to accelerate the growth of the business by investing further in TV advertising. Accordingly, marketing expenditure for the current financial year is expected to be higher than previously planned. This increased expenditure is expected to significantly enhance future growth through accelerated customer database growth and increasing frequency of purchase from a loyal and highly engaged following.
The investment that has been made into the product team across all areas, including design, buying, merchandising and garment technology, has resulted in the product range, as measured by number of intake styles, more than doubling year-on-year. This widening of the range has come through the additions of more choice within product types, and new categories such as denim and accessories. The new product range is resonating well with both customers and celebrities, with household names such as Mel B and Amanda Holden recently seen supporting the brand.
Over the period, customers have begun to place repeat orders more frequently, whilst the returns rate has reduced to 49%, from 52% in the prior year. This demonstrates the appeal of the Company's unique design aesthetic and customers' growing loyalty to the Sosandar brand.
The Company will announce its interim results on 27 November 2019.
|6 months ended 30 September 2019||6 months ended 30 September 2018||Change|
|Number of orders||64,709||43,979||47%|
|Average Order Value||£97.55||£105.42||-7%|
|Active Customer Base||75,056||44,096||70%|
|Repeat Order Rate||1.66||1.53||8%|
Ali Hall and Julie Lavington, Joint CEOs, commented:
"Our ability as an online retailer to employ an agile strategy resulted in us focusing our customer acquisition activity on the important Autumn months towards the end of the period and carrying into current trading. As expected, the accelerated investment into marketing and product is producing strong results with record months in September and October.
We are seeing strong engagement from our ever-expanding base of loyal existing customers and this will continue to increase as our product range grows further. We are delighted with the success of our new advertising activity and the Board is confident that accelerating our future growth by increased investment in marketing (especially via TV) in this financial year is the right decision for our business.
With a widened product range offering, strong balance sheet, and a broadened, aggressive, and increasingly effective marketing strategy, we are confident about the full year."
|Julie Lavington / Ali Hall, Joint CEOs||c/o Alma PR|
|Shore Capital||+44 (0) 20 7408 4090|
|Patrick Castle / Mark Percy / James Thomas|
|Alma PR Limited (Financial PR)||+44 (0) 203 405 0205|
|Rebecca Sanders-Hewett / Susie Hudson / Sam Modlin||[email protected]|
About Sosandar PLC
Sosandar is an online womenswear brand, specifically targeted at a generation of women who have graduated from throwaway fashion and are looking for quality, affordable clothing with a premium, trend-led aesthetic. This is a section of the market that is currently being underserved.
Sosandar was launched in September 2016. The Sosandar business model is built around using trend-led, exclusive designs produced in-house and then manufactured using a variety of global suppliers. Sosandar caters for a growing market of fashion conscious women, while utilising an outsourced logistics provider that can support its planned growth over the coming years.
Sosandar's founders are Ali Hall and Julie Lavington, who previously launched and ran high street fashion magazine Look, as editor and publishing director respectively. They have a combined experience of over 35 years in the fashion industry, including in the design, manufacture and sale of fashion ranges for some of the UK's high street retailers, including Debenhams, Office, Oasis and JD Williams.
More information is available at www.sosandar-ir.com