Sosandar has experienced a notable 27% reduction in sales over the recent six months, reflecting a major shift in its pricing strategy.
- The fashion brand’s pre-tax losses decreased by 50%, indicating a significant improvement in financial health, despite lower sales.
- Sosandar’s transition away from frequent promotions has led to a robust gross margin increase, highlighting improved profitability.
- Newly opened physical stores have drawn substantial foot traffic, with a noteworthy portion of in-store purchases made by new customers.
- Partnership expansions and future projections reveal a positive outlook, reinforcing Sosandar’s strategic direction.
Sosandar, a prominent player in the fashion retail sector, has undergone a transformative phase marked by a 27% decline in sales during the last six months. This shift is attributed to the brand’s strategic decision to move away from regular price promotions, encouraging consumers to pay the full recommended retail price (RRP).
Despite this sales dip, the company’s financial health shows improvement, evidenced by a halving of pre-tax losses to £0.7m. This improvement reflects Sosandar’s increased focus on profitability and efficient cost management.
The retailer saw a significant enhancement in its gross margin, rising to 62.2% from the previous year’s 55.4%. This change underscores the successful implementation of the full-price strategy and the company’s commitment to margin improvement.
During this period, Sosandar successfully launched its first four physical stores within the UK. These stores attracted strong customer interest, with approximately 65% of in-store purchases being made by first-time buyers.
This retail expansion also positively influenced online engagement, boosting traffic in regions where the stores are located. Additionally, Sosandar strengthened its existing partnerships with Next and M&S and initiated a new retail presence in Arnotts, Dublin.
Looking ahead, Sosandar predicts revenue to hit £40.5m, with a pre-tax profit of £1m, aligning with market expectations. The company anticipates a continued rise in gross margins, projected to reach 64% as consumers increasingly embrace the full-price approach.
Co-CEOs Ali Hall and Julie Lavington remarked, “The past six months have been incredibly important steps in Sosandar’s development. We are now well on our way to becoming a true multichannel retailer following the opening of our first four stores during the half. Seeing the Sosandar brand on high streets, and the reaction we have received so far, validates our decision to give our customers more ways to shop with our brand.”
Furthermore, Sosandar’s agreement with Next to license a homeware range signifies a strategic effort to leverage brand equity and broaden its market reach. This venture is poised to enhance connections with new audiences and deepen existing customer loyalty.
Sosandar’s strategic transitions indicate a promising trajectory towards becoming a robust multichannel retailer, enhancing both profitability and market presence.
