Q1 Trading Update
07 July 2020
Year on year growth with significantly reduced losses as a results of strategy shift implemented in response to Covid-19
Sosandar, the online women's fashion brand, provides the following Q1 trading update covering the period 1 April 2020 to 30 June 2020.
The Company is pleased to report that the resilient performance seen in April and May continued throughout June. Total revenue in Q1 increased by 54% year on year, demonstrating the strength of the Company's business model and continued demand for its offering. This growth represents strong performance in a difficult trading environment, whilst noting that Q1 was the lowest revenue quarter in the prior year.
As a result of the growth in sales together with a significantly decreased marketing spend, the Company has seen losses in Q1 reduced by c.70% compared to the same period in the prior year. In June, the Company's monthly sales performance improved again, with a strong gross margin from a shift back to full price purchases following some promotion and discounting in early April. As a result, the Company recorded results very close to breakeven in June.
The Q1 results have been driven by the shift in strategy implemented in response to Covid-19 and the associated lockdown. This has included diversified product ranges adapted to changes in customer demand, with success in areas such as denim, linen and casual summer dresses, in addition to the industry wide growth in loungewear.
The Company has also significantly reduced marketing spend, with increased frequency and a focus on high quality, relevant communications successfully engaging with the customer base and converting prospects that have been established over time. As a result, the Company has seen a 24% increase in new customers over the quarter, and robust growth in return customers, demonstrating the longer-term impact of its acquisition marketing strategy in previous periods, and the benefits of holding a larger database.
The Board believes there continues to be a very significant opportunity available to Sosandar and the Company anticipates that, in line with the external environment improving, it will recommence controlled and careful new customer acquisition towards the end of Q2 and beyond.
Cash at 30 June 2020 remained broadly flat at £4.4m, showing only a very marginal decrease since 31 April 2020. Whilst the Company remains prudent in its approach to discretional spend, carefully monitoring KPIs and cash management, it expects to cautiously increase marketing spend and investment in new products going forward in order to accelerate top line growth.
Full year results
The Company expects to announce its financial results for the year ended 31 March 2020 in August and will confirm the date in due course.
|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