Half Year Trading Update
07 October 2020
Sosandar, the online women's fashion brand, is pleased to provide the following trading update covering the six-month period ended 30 September 2020.
- Revenue of £4.3 million, a 52% increase against the same period in the prior year, with a substantial improvement in EBITDA loss
- Sales momentum seen in Q1 and July continued in August and September. Revenue increased by 7% July to August and 54% August to September
- Initial trading with John Lewis and Next has been very promising with the initial ranges already expanded
- Carefully controlled customer acquisition commenced in September and has delivered excellent initial results
- Record trading seen on two days in September, as well as record monthly sign ups to the customer database
- Year to date returns of 42% vs 49% in same period last year
- Maintained a strong gross margin of 52.3% (H1 2019: 53.6%) with the small reduction year on year being driven by actions in the early weeks of lockdown to address the impact of Covid-19
- Net cash remains level at £4.30m (July £4.34m)
The revenue growth in the half represents a strong performance in a challenging trading environment, highlighting the Company's in-depth knowledge of its customer base and its agility in quickly adapting to changes in the market.
As previously disclosed, following the outbreak of COVID-19 in March 2020, the Company significantly reduced its marketing spend during the period, focusing on cash preservation and trading its database of repeat orders and prospects, which had successfully been built up through its marketing activities over the prior six months. This strategy was effective, as repeat orders for the period increased by 88% on the prior year. As a result of high quality and relevant communication delivered through email and social channels, the Company also saw a 26% increase in new customers over the period, despite marketing spend decreasing by 49%. This demonstrates the Company's ability to convert prospects that have been established over time into highly engaged customers and its success in driving efficiencies in customer acquisition.
Performance in August, which is usually a seasonally quiet month, was strong with revenue up 7% on July. This was driven by a high proportion of repeat orders with strong demand for full price high summer products. In addition, the Company successfully launched with both John Lewis and Next on their website platforms during August. Initial trading has been pleasing and the ranges have already been expanded on both platforms.
The Company's strategy going into September was to begin investing again in carefully controlled customer acquisition while also achieving substantial efficiencies versus autumn last year which was a period of aggressive customer acquisition. A return to a limited amount of advertising on TV, as well as investment in direct mail brochures, to complement existing social and email marketing campaigns, has delivered excellent initial results. Revenue in September increased by 54% from the prior month and, despite marketing spend being half what it was the prior year, revenue grew by 36% year on year. In addition, record trading has been seen on two days in September.
Following its success in September, the Company plans to continue with carefully controlled customer acquisition in October and November in order to drive further growth in its database whilst also focusing on efficiencies and preserving cash.
Following the significant level of investment in FY20 to broaden its product range, the Autumn range is resonating well with customers and the Company is benefiting from the first full peak trading season of knitwear, denim, loungewear and casual outerwear, with many sell out styles in these categories. Leather and faux leather are also trading well as are separates (tops, trousers and leggings).
The Company has maintained a strong cash position, with net cash as at 30 September 2020 of £4.30m (31 July 2020: £4.34m). This reflects the strong trading performance during the period from repeat customers and a focus on careful cost control, whilst also reintroducing targeted and controlled marketing during September.
The Company expects to announce its full interim results in early December.
Ali Hall and Julie Lavington, Co-CEOs commented:
"We are delighted to have continued to demonstrate the strength of the Sosandar brand and agility of our model, growing our sales, product range and customer base during such a challenging trading environment.
Our customer database, and their loyalty, is the backbone of our performance. The feedback from our customers throughout lockdown has been fantastic and it is clear that they love wearing Sosandar clothes, whatever the circumstances. Following the successful re-introduction of TV advertising and brochure activity in September, we will continue cautiously investing in marketing to underpin customer database growth throughout October and November.
Notwithstanding the continued uncertainty, we continue to believe that we can take significant market share within our demographic, particularly as the lockdown period escalated growth in online retail. We remain confident in what the future holds for Sosandar."
|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) 20 3405 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.