Trading and COVID-19 Update
18 March 2020
Sosandar PLC (AIM: SOS), the online women's fashion brand, provides the following update on current trading and the impact of COVID-19.
During Q4 of the current financial year, the Company experienced strong trading through January and February and into March resulting in revenue in the quarter to date up 203% on the previous year. However, the recent increasing macro-economic uncertainty associated with the COVID-19 outbreak is creating a significantly more challenging and volatile trading environment. As a result, sales over the past week have been substantially weaker than expected with margins also being impacted by increased customer incentives used. The current expectation is that, given recent developments, this trend will continue in the immediate future and the Company’s performance in March will be well below forecast. Accordingly, for the year ended 31 March 2020, the Company expects its revenue to be between £9.0m and £9.3m and net loss for the year to be between £6.5m and £6.8m.
Despite the unprecedented current situation, the Group’s prior performance this year and continued customer engagement statistics showed there is a clear demand for the Company’s unique offering in the market. However, it is currently impossible to predict the full impact on the retail sector, and the Company’s business, from COVID-19. The business has relatively low levels of committed expenditure and, as a dynamic business, management has decided it is appropriate to focus on cash preservation during this challenging period. The Company will therefore substantially reduce its planned marketing spend in order to focus on repeat orders from the Group’s existing customer base rather than new customer acquisition in the short to medium term. This, alongside other cost saving measures available to the Company, will help preserve cash for when market conditions improve.
Sosandar has a robust balance sheet and expects to end the year with cash in excess of £5m and healthy stock levels to support the business during this unprecedented time.
At this stage, Sosandar can confirm it is not currently experiencing any significant disruption to its manufacturing. Having a flexible supply base, Sosandar is able to resource raw materials and production from other geographies when necessary to ensure a minimal disruption to the supply chain.
|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.
More information is available at www.sosandar-ir.com