Sosandar reports first £1m month, but half of products returned

Burgeoning women’s fashion e-tailer Sosandar said today (28 October) that it expects half-year revenue – covering the six months to 30 September – to total £2.82 million, buoyed by new investment in marketing and product.

And momentum continues at the business, with October already representing the company’s first £1 million-plus net sales month.

The half-year sales figure is up by 53% on the same period last year, while October is tracking at an over 100% increase on the same month in 2018.

Sosandar previously announced it would focus on customer acquisition activity for the “important autumn months”, and it said this has brought “strong results”. The retailer raised £7 million through a placing of new shares earlier this year, and much of that investment is being ploughed into marketing – most notably on TV, but also significantly across digital out-of-home spots on London Underground – and into product design.

In September, the first month TV advertising went live, the retailer experienced a record number of email subscriber sign-ups – a 224% increase on August and the equivalent to approximately six months' performance in the prior year.

However, like the wider fashion industry, the retailer still must contend with a major returns issue. The fact Sosandar is measuring it and announcing it in trading statements is encouraging – as not all retailers do – but the 49% product returns rate it reports shows that not every sale is actually a sale.

Sosandar said the return rate reduced from 52% year-on-year in the half-year period, which it argued was evidence of growing loyalty to the brand. Customers have started placing repeat orders more frequently, it added.

Ali Hall and Julie Lavington, joint CEOs at Sosandar, commented: “We are seeing strong engagement from our ever-expanding base of loyal existing customers and this will continue to increase as our product range grows further.

“We are delighted with the success of our new advertising activity and the board is confident that accelerating our future growth by increased investment in marketing (especially via TV) in this financial year is the right decision for our business.”

They added: “With a widened product range offering, strong balance sheet, and a broadened, aggressive, and increasingly effective marketing strategy, we are confident about the full year.”

Sosandar is scheduled to announce its interim results on 27 November 2019.