Sosandar H1 sales grow and so do losses, but H2 starts with a bang
today Nov 27, 2019
Contemporary clothing e-tailer Sosandar has been making giant leaps in revenue in recent periods, although beginning from a standing start that's perhaps no surprise. On Wednesday it released its interim results and while its revenue rise wasn't as big as the 228% it reported for the last full year, a 53% increase was nonetheless encouraging. And it seems to have accelerated its growth since the first half ended.
The company said it's been building on its initial successes with "significant sales momentum" in the six months up to September 30.
Its revenue was £2.82 million and its gross margin was 54%, although this was slightly down from the 55% of this time last year. Gross profit increased to £1.5 million from £1.01 million a year ago. But the company remains loss-making with an underlying EBITDA loss of £2.7 million, wider than the £1.96 million a year earlier. The company said this reflects "the increased upfront investment into the team, product and marketing”.
While the average order value fell 7% to £97.55 from £105.42, the repeat order rate rose 8% to 1.66 from 1.53 and order numbers saw growth of 47% to 64,709.
Interestingly the company also said returns fell to 49% from 52% a year earlier "thanks to increasing data in the business influencing product development”.
And it has a healthy cash balance following its oversubscribed share placing in July so it looks to be in a good position.
It appears to be winning new fans and said that its customer database rose 76% and its active customers increased by 70%, on the back of rising brand awareness following the trial of new marketing initiatives.
And as well as improved marketing, it's also offering a range that seems to be more appealing with new styles up by 106% in September compared to a year earlier. This widening of the range has come through the addition of more choice within product types, and new categories such as denim, knitwear, footwear and accessories. Best-selling product lines include dresses for all occasions, leather jackets, faux fur coats and denim dresses.
It's interesting as well that while revenue growth in the six month period in question was considerably slower than it had been a year earlier, its seems to have picked up since the period ended. The company said it’s achieved sales growth of well over 100% in October, "a performance which November is on course to exceed”. In fact, revenue so far in the second half has already exceeded the revenue it made in Q2.
Joint CEOs Ali Hall and Julie Lavington said in the results release that “the investments that were made in the latter part of the second quarter have resulted in exceptional Autumn trading. Post-period-end, October was particularly notable, as we hit a special milestone — the first month where net revenues exceeded £1 million”.
They also said "we have seen continued database growth post-period, with our number of subscribers in September up 26% month on month and new subscribers tracking over 300% up versus the same period last year”.
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