Shares in online women’s fashion retailer Sosandar (SOS:AIM) strutted 7.5% higher to 16.3p on Wednesday on the news first-half losses narrowed substantially amid a 52% rise in sales.
Encouragingly, the trading momentum seen in the first quarter, where Sosandar’s sales increased by 54% year-on-year, continued into the second quarter, even after non-essential clothing retail rivals re-opened brick and mortar shops from June onwards.
STRONG SHOWING CONTINUES
For the half ended 30 September, sales grew by 52% to £4.3 million, implying that Sosandar’s second quarter sales were up 50% year-on-year and helping to drive a material reduction in the retailer’s EBITDA (earnings before interest, taxes, depreciation and amortisation) loss.
Sosandar’s strong showing in the seasonally quiet month of August was driven by a higher proportion of repeat orders together with strong demand for its full price summer products and supported by launches with both John Lewis and Next (NXT) on their online platforms which are showing promising early results.
Revenues in September increased by 54% month-on-month and Sosandar also witnessed record daily trading on two days during September, together with record monthly sign ups to the customer database.
Gross margin slipped to 52.3%, down from 53.6% year-on-year, with the reduction driven by actions to address the impact of Covid-19, although first half customer returns rates were 42%, comfortably below the 49% rate in the previous year. Sosandar’s robust cash position has also been maintained with net cash at the end of September of £4.3 million.
FANTASTIC FEEDBACK
‘Our customer database, and their loyalty, is the backbone of our performance,’ enthused co-CEOs Ali Hall and Julie Lavington.
‘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 created by the pandemic, they continue to believe their charge can take ‘significant market share within our demographic, particularly as the lockdown period escalated growth in online retail.’
Broker Shore Capital insisted this is ‘a strong H1 trading performance against a difficult retail backdrop in the UK. The company’s growth trajectory continues and the targeted new customer acquisition together with the tight focus on costs bodes well for the future.’
