Covid-19: Sosandar reports revenue progress but expects larger loss

Online fashion retailer Sosandar has said it expects to report revenue of at least £9 million for the 12 months to 31 March 2020, which would represent a 100%-plus increase in income year-on-year .

The company talked up its customer engagement ability, with repeat orders up by 144% and its active customer base up by 111%. New customers for the retail brand, which was formed in 2015, were up by 67% and orders grew by 109%.

Product returns remained flat at 50%, although in the first two months of the financial year – and coinciding with the Covid-19-influenced lockdown period in the UK – returns levels have dropped to 33%.

Indeed, Sosandar said there were several positive indicators for its business in April and May, with orders up by 44% in the year to date (YTD), contributing to revenue growth of 62% year on year. The retailer has continued to grow its customer base, which has increased by 15% year on year, despite significantly reduced marketing expenditure.

The business has also noted improvements to its bottom line YTD, and it is set to go live on the online platforms run by John Lewis and Next in time for the autumn/winter season. Buy now, pay later provider Klarna has also been introduced to the Sosandar website in recent weeks.

Sosandar complemented Clipper Logistics’ role in helping flex warehouse and fulfilment processes in light of changes in demand and operations influenced by the coronavirus.

Following regulatory guidance, the womenswear retailer has delayed reporting full annual results – it will confirm a date for that announcement in due course – but it said the impact of the coronavirus pandemic will mean losses are slightly higher than it previously anticipated.

In March, Sosandar said it expected to report a net loss for the year of between £6.5 million and £6.8 million. That loss is now set to be higher due to a flurry of product returns received from customers immediately prior to UK lockdown, as well as increased discounting in the early lockdown period.

Emily Salter, retail analyst at GlobalData, said: "As an online only retailer it has a distinct advantage over its multichannel competitors including Next and Debenhams, as they will feel the impact of prolonged store closures and stock being held in stores, and Sosandar already has a model in place to quickly adapt to shopper demand."

She added: "Sosandar has witnessed changing shopping habits as a result of the lockdown, with a shift to more casual ranges which it adapted to by changing its new-in products to reflect this. Many of its competitors will not have been able to adjust as quickly so will have lost shoppers from focusing ranges on less relevant categories including occasionwear."