Half Year Trading Update

A very strong first half with revenue up 184% year on year, continued improvement in EBITDA and a record start to autumn trading.

Sosandar, the online women’s fashion brand, is delighted to provide the following trading update covering the six-month period ended 30 September 2021.

Period highlights:

• Revenue of £12.2 million, a 184% increase against the same period in the prior year, and more than was generated in the entirety of FY21
• A record revenue month in September as demand accelerated for new season product
• Trading with third parties stepped up every month through the period, with September a new record
• Continued improvement in EBITDA loss
• Continued success recruiting new customers and engaging with the existing base:
• Website visits up 67% to over six million
• Active customers up 41% since March, representing the addition of 56,000
• Repeat buyer order frequency up 14% to 3.85 times
• Conversion rate increased to 3.91% (H1 FY21: 2.58%)
• Gross margin up to 56.5% (H1 FY21: 52.3%) reflecting a higher proportion of full price sales compared with the comparative period which was impacted by actions taken as a consequence of Covid-19
• Net cash at £7.3m (20 June 2021: £9.1m) reflecting the execution of the plan outlined following the fund raise in May 2021 to increase inventory in order to meet growing demand from all customers including third parties
• Trading for the current year in line with market expectations
• As reported at the time of the Full Year results in July 2021, the first half began strongly as Covid-19 related restrictions started to lift and momentum continued to build during the period. The strong performance, with very rapid sell through of stock across all categories, was seen on both the Sosandar website and across third parties.

All KPIs in the business are trending well, demonstrating the Company’s continued growth and development as it becomes increasingly able to capitalise on economies of scale, exploit data-led learnings and cater to the needs of the Sosandar customer.

Trading with third parties (M&S, Next and John Lewis) has been very strong, with Sosandar product resonating very well across all types of product category. As intended, the funds raised in May 2021 will help the Company to meet the proven demand from our third party partners. The Company began to increase inventory levels during September and intends to continue with this strategy over the second half.

The Company has seen great results across a wide variety of product categories including knitwear, dresses, leather, coats and denim. The successful broadening of the product range, which has been the focus over the last two years, is driving increased conversion and repeat order rates. Early autumn sales have been very strong as demand for ‘going out’ and work wear has increased. The Company took the decision to bring in stock early for autumn, anticipating early demand for partywear, coats, boots and knitwear. Sequins, Christmas jumpers and fur coats are already best sellers. The Company has retained a more equitable mix across all of its product segments compared to pre-pandemic, increasing its resilience against any market changes and enhancing appeal and choice for all customers. Now that returns rates have normalised in line with buying behaviour, the diversified category mix has also proved to have a positive effect on returns rates which are at a lower level than pre-pandemic.

The Company has a strong cash position, with net cash as at 30 September 2021 of £7.3m (31 March 2021: £3.9m). This reflects the funds raised in May 2021 and a continued focus on cost control balanced with investment for growth in particular in inventory ahead of the second half.

Sosandar has not experienced any material impact from supply chain disruption, maintaining a constant flow of stock to meet customer demand. The Company is well stocked for the autumn season across both its own site and third parties and has good visibility of incoming goods. As the Company scales and increases its order quantities it has seen margin growth, which has offset the small degree of upwards pressure experienced on supply chain costs. Sosandar remains mindful of the wider market disruption, is constantly reviewing the situation and will take mitigating actions as appropriate.

Despite the external pressures, with a strong first half and a record start to autumn trading the outlook for Sosandar is very positive. The Board therefore expects results for the full year to be in line with market expectations.

The Company expects to announce its full interim results in early December.

Conference call

Sosandar is hosting a Q&A call for analysts and investors today at 09:00am to discuss the Trading Update. If you would like to register for the call please follow this link.

Ali Hall and Julie Lavington, Co-CEOs commented:

“We are delighted to report another strong period for Sosandar with enhanced sales delivered across our entire product range as customers begin to return to the office and attend events. After over a year in loungewear our customers are clearly enjoying a return to fashion.

“With a substantial increase delivered in active customers, repeat customers and conversion rate, we can see the benefits of our marketing strategy, broadened range and operational improvements flowing through. Our sales continue to see great growth momentum both on the Sosandar website and with our third party partners and we are very excited about the opportunity that lies ahead for the Company.”