Womenswear e-tailer Sosandar is going to open physical stores from next year, its sales are strong, and it has signed deals to expand in Australia and Canada.
The fast-growing company’s monitoring of trends has shown there’s “clear evidence of consumers increasingly shopping on the high street coupled with the growing strength of the Sosandar brand”.
Starting next spring, it will open stores and “significantly expand the company’s addressable market into more locations where our loyal customers want to shop”.
It’s targeting “affluent towns with thriving high streets where Sosandar customers over-index”.
The investment in the store opening programme will be self-funded from its existing cash resources.
At the same time, it’s investing in moving away from markdowns and will “significantly reduce price promotions by transitioning customer behaviour to the non-promotional-led proposition it already operates successfully across all its third-party channels”.
The aim is to deliver “significantly higher gross margins, putting the company on a trajectory to deliver pre-tax profit margins of at least 10% in the medium term”.
It spent much of Q2 trialling this and the test has “validated the belief that it can create significant longer-term profit through increased margin and average order value”.
That said, it’s set to take a hit as its trials also showed that traffic and conversion will be lower, “resulting in a short-term revenue reduction, which can be supported from existing cash resources”.
It expects revenue to grow by ’only’ 10% year on year for the current FY24 (which ends next March) to £46.8 million but it should remain in profit during the transition. Revenue in the year ending 31 March 2025 should grow 17% to £54.6 million, “with an upward trajectory in profitability”.
Meanwhile, internationally the business recently launched with the Global-e platform and now fulfils orders worldwide to over 60 countries “in a cost-effective manner”.
Additionally, it has signed deals with The Iconic in Australia and The Bay in Canada that will see it exceeding its previously stated target of launching with one such partner this financial year. These consignment agreements will see it selling a wide range of the Sosandar collection and will launch during H2.
