Sosandar to hit the high street and trade internationally

Sosandar, the Wilmslow-based online women’s fashion brand which this year achieved its first profit since formation in 2015, is expanding onto the high street, and extending its reach internationally.

The AIM-listed online business, founded by co-CEOs, Ali Hall and Julie Lavington, said, with clear evidence of consumers increasingly shopping on the high street, coupled with the growing strength of the Sosandar brand with outlets such as M&S and Next, the company is well placed to develop its omnichannel strategy with its own bricks and mortar presence, with its own stores to be launched in spring 2024.

It said it is targeting affluent towns with thriving high streets where Sosandar customers over-index.

The company is also expanding its presence internationally, and today announced that it has signed agreements with The Iconic in Australia and The Bay in Canada to begin selling online in the fourth quarter of the current financial year ending March 31, 2024.

These pivotal developments will propel the business further towards reaching its strategic goal of becoming one of the world’s largest womenswear brands globally, in the medium term targeting £100m+ revenues and a pre-tax profit margin of at least 10%.

The investment into a stores portfolio will be self-funded from the company’s existing cash resources. And it said it is moving away from price led promotions, one of the key operating norms of pureplay retail, and will significantly reduce price promotions to grow its margin by transitioning customer behaviour to the non-promotional led proposition it already operates successfully across all its third-party channels.

The company expects revenue to grow by 10% year on year for FY24 to £46.8m and to remain in profit during the transition.

It said it expects revenue in the year ending March 31, 2025 to grow by 17% year on year to £54.6m with an upward trajectory in profitability. The company believes this is the right strategic course of action to deliver significantly higher gross and pre-tax profit margins for the business and ultimately generate greater shareholder value.

Net cash, as at September 2023, is £7m, which reflects the timing of stock purchases ahead of the autumn season.

In a trading update covering the six-month period ended September 30, 2023, Sosandar said autumn trading has started very well, despite the unseasonably warm weather in September. Net revenue for the week commencing October 9, was the highest on record, excluding black Friday, and the highest ever for gross margin.

Sales through third party partners have also been very strong with Next and M&S in particular having a great start to the autumn season. The Sainsbury’s brand new fashion concept stores have just gone live over the first two weeks of October with a wide range of Sosandar product selling well in all of the nine stores. In addition, the partnership with Freemans, which launched in September, has also had a very strong start to trading with Sosandar.

The performance in the first half of the financial year has been resilient against a backdrop of macro-economic challenges and the strategic decision to trial reduced promotional mechanics and activity. The company will be launching its biggest ever occasion wear range in time for the key trading period towards Christmas.

Ali Hall and Julie Lavington, co-CEOs, said: “We are extremely excited about the next stage of our growth journey. Our decision to open our own stores is the logical next step as we look to offer our customers more ways to engage and shop with Sosandar.

“We know that the added value of being able to touch and feel our clothes will appeal to our target customers. With a clear roll-out plan in place and strict criteria around the location of potential stores, we are confident that our stores will enable us to accelerate our market share and increase the awareness of our brand.

“We are also delighted to announce our first international third-party partners. Over the last few years, we have demonstrated how successful these types of agreements can be, and after an extensive and thorough period of research, we believe that the first partners we have selected are the perfect fit to launch our international growth. We have no doubt that our unique and diverse product range will resonate with customers globally, just as it has done in the UK.”

They added: “Whilst we do expect to see a short term impact as we transition the business to offer less promotional activity, we still expect to be in growth and remain profitable. This strategy is undoubtedly the right course of action to deliver greater profitability and, therefore, greater value to our shareholders. To be able to capture the 60% of clothing expenditure coming from physical stores is a massive opportunity.

“The Sosandar brand could not be in a stronger position, and we have every confidence in our brilliant team to execute successfully as they always have done.”