13 April 2021
On behalf of:
Sosandar plc ('Sosandar' or 'the Company')
A year of strong revenue growth accelerating in Q4 with substantial EBITDA improvement year on year
Sosandar, the online women's fashion brand, is pleased to provide the following trading update for its financial year ended 31 March 2021.
The Company delivered another strong performance in its fourth quarter (January - March 2021) with revenue of £3.94m, up 63% year on year. Customer activity stepped up each month during the quarter with record revenue delivered in the month of March, up 66% compared to January and 163% up on the lockdown impacted previous year. This performance reflects an increasing level of consumer optimism as lockdown restrictions start to lift. Gross margin has also shown continual improvement throughout the fourth quarter with March at 54.0%.
Highlights for the financial year ended 31 March 2021:
· The Company expects to report revenue of £12.2m, up 35% year on year, with the EBITDA loss reduced by over 60%
· Continued engagement with loyal customer base:
o Number of orders increased 29% to 276k
o Repeat orders increased 40% to 190k
o Conversion rate increased to 3.1% from 2.7%
· Gross margin 48.1% (48.5% in the prior year) reflecting promotional activity during the period of lockdowns
· Continued improvement in returns rate, which reduced to 43% (from 50% in the prior year), reflecting a diversification of product mix
· Strong sales with John Lewis and Next, with March being a new record month and a significant step up on the previous best, and the product range continuing to develop and expand
· Successfully launched with Marks & Spencer as a third-party online retailer at the end of March with excellent initial sales
· Net cash of £3.93m as at 31 March 2021, being slightly improved compared with 31 December 2020, reflecting the strong trading performance, continued careful cost management and focus on return on investment from the marketing spend
The Company is pleased to have delivered increased sales, better cost efficiency, ever increasing engagement with customers and an expanded product range in spite of a very challenging and volatile market backdrop, demonstrating management's ability to successfully navigate changing circumstances.
This strong growth has also been achieved despite a significant overall reduction in marketing spend over the period. Utilising learnings from the previous financial year, the Company has been able to maximise its return on investment from marketing throughout. The Company has engaged in successful customer acquisition at key periods with more new customers acquired compared to the prior year on less than half the marketing spend. Following success in February and March, the Company plans to continue with carefully controlled customer acquisition in April and May and continue using these learnings to maintain higher returns on investment longer-term.
Throughout the year the Company has continued to invest and expand the product range, a key factor in its strong trading performance. As an agile business it has been able to fast track developments in its product range to meet consumer demand reflecting the changing circumstances. Loungewear, knitwear, denim and outerwear have all performed particularly well. In January 2021 the Company launched active and leisure wear, with strong sales results and the category already being established as a key part of the product mix.
The Company successfully launched with both John Lewis and Next on their website platforms in August and has continued to release regular new drops of stock to the retailers since. Trading to date with both retail partners has been very successful, with March 2021 delivering record monthly revenues. The Company has just launched with Marks & Spencer, where the initial product range has been incredibly well received by the M&S customer with many styles selling out and being quickly replenished in the first week of trading. These partnerships allow Sosandar to further increase brand awareness across its target market, whilst driving incremental sales and accelerating improvement in EBITDA.
Market positioning and outlook
Moving into Spring and with the loosening of restrictions laid out, Sosandar has seen early signs that customers are preparing their wardrobes for a busy summer. This includes an increase in the sales across all key categories, in particular colourful dresses, tops and denim.
Looking to the year ahead, against a backdrop of improving visibility, Sosandar is very well positioned to accelerate its growth trajectory and further improve EBITDA. The acceleration in the adoption of online shopping has expanded the long-term market opportunity, and as a pureplay ecommerce brand, the Company is set up to successfully cater to customers through this channel. The team has demonstrated its skilful management throughout 2020, maintaining a strong cash position whilst developing the infrastructure and capability for future growth. The Sosandar brand has also shown its desirability in having been chosen to appear on the platforms of three major British retailers. The Company sees many opportunities for growth both on its own site and with its retail partners in the coming months and beyond.
Sosandar is hosting a Q&A call for analysts and investors today at 08:30am to discuss the Trading Update. If you would like to register for the call please follow this link: http://bit.ly/SOS_FY_Trading_Update
Ali Hall and Julie Lavington, Co-CEOs commented:
"In what has been a year that no one could have possibly predicted, we are delighted to have shown resilience and our entrepreneurial spirit, overcoming challenges to deliver a significant improvement in revenue and reduction in EBITDA losses, together with the further diversification of our product range.
The progress we are making reflects the scale of our opportunity and growing demand for our unique offering in the market. The recent purchasing trends that we have seen from our customers point to a period of increased activity and we believe that our extensive product range can cater to their needs.
We would like to take this opportunity to extend our sincere thanks to all our colleagues, partners, and suppliers for their hard work and commitment throughout what has been a difficult time for everyone.
Inevitably, some uncertainty remains, however, we are seeing a gradual return to more normalised trading conditions and now have much greater visibility over forward trading. We are confident in what the future holds, and believe that Sosandar is well positioned to take advantage of the opportunities ahead of us."
Julie Lavington / Ali Hall, Joint CEOs
c/o Alma PR
N+1 Singer (Nominated Adviser & Broker)
Peter Steel / Kailey Aliyar / Hannah Woodley
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Alma PR Limited (Financial PR)
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Susie Hudson / Sam Modlin / Molly Gretton
This announcement contains information which, prior to its disclosure, was inside information as stipulated under Regulation 11 of the Market Abuse (Amendment) (EU Exit) Regulations 2019/310 (as amended).
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.
More information is available at www.sosandar-ir.com