Sosandar has experienced a significant shift, witnessing a 27% decline in sales over the past six months, while simultaneously improving its profitability.
- The company’s decision to move away from frequent discounts and encourage full-price purchases led to a noticeable impact on revenue.
- Despite lower sales, Sosandar reported a narrowed pre-tax loss, showcasing improved financial health and cost management.
- The retailer opened four physical stores in the UK, which attracted considerable foot traffic and boosted brand visibility.
- Sosandar continues to strengthen its partnerships with major retailers, a strategy that aligns with its evolving business model.
Sosandar has undergone a notable transformation in its sales approach, resulting in a 27% reduction in sales for the half-year leading up to September 30. This decline is primarily attributed to a strategic shift towards encouraging customers to pay the full recommended retail price (RRP), a departure from the brand’s previous reliance on frequent price promotions. As a result, the company’s revenue fell from £22.2 million to £16.2 million compared to the previous year.
The impact of Sosandar’s pricing change is evident; however, it has led to positive outcomes in profitability. The fashion retailer managed to halve its pre-tax losses to £0.7 million, reflecting its successful cost management and focus on enhancing margins. The company’s gross margin improved significantly, rising to 62.2% from 55.4% in the prior year. This improvement highlights Sosandar’s commitment to financial optimisation.
One key development during this period was the opening of Sosandar’s first four physical stores in the UK. These outlets have been well received, drawing substantial foot traffic and broadening customer reach. Interestingly, about 65% of in-store purchases were made by new customers, and there was a marked increase in online engagement in regions surrounding these new outlets.
The retailer has also expanded its collaboration with established brands like Next and M&S and launched a presence in Arnotts, Dublin. This enhancement of strategic partnerships complements Sosandar’s overall business plan.
In forecasting future performance, Sosandar appears optimistic. It anticipates revenue to hit £40.5 million and a pre-tax profit of £1 million, with full-year trading thus far meeting market expectations. Co-CEOs Ali Hall and Julie Lavington expressed that these developments mark an important phase in the retailer’s growth.
The market has responded well to Sosandar’s focus on occasionwear, knitwear, and denim as the company enters peak trading season. The improved margin performance and the shift towards a full-price selling strategy underline a robust adaptation to evolving retail conditions.
Sosandar’s strategic transition appears to be paying off, balancing reduced sales with improved profitability and brand expansion.
