Sosandar is closer to profitability, new financial year starts strongly
Sosandar is continuing on its long march towards profitability with the online womenswear retailer saying on Tuesday that its latest year saw strong revenue growth and a substantial reduction in EBITDA losses.
It has also seen a strong start to the new financial year with its revenue in the first quarter up as much as 256% year on year.
The company said revenue grew 35% to £12.2 million in FY21, which it saw as a good performance in a volatile trading environment. It described its gross margin a stable, although it dipped ever so slightly to 48% from 48.5%.
And its EBITDA loss narrowed to just £2.92 million from £7.66 million in the previous year. This was a result of “increasing scale, improved ROI on marketing and ongoing focus on cost management”. And it had cash at the year end of almost £4 million with a low cash burn since July 2020, which means it has enough available to continue investing in its operations.
So what exactly went on in FY21? The company continued to diversify and expand its product range and saw a 60% increase in new styles. It also added new categories such as the all-important loungewear, active and leisurewear and these have become a key part of the product range, it said.
It also highlighted the successful expansion of casual and smart-casual clothing ranges “with denim, knitwear and outerwear performing particularly well”. And there was its “successful launch” with John Lewis, Next and Marks & Spencer to take into account too.
Importantly, the company is attracting new customers and retaining them. It reported a 40% increase in repeat orders in the last year and average order frequency improved by 23%. It also saw a strong conversion rate of 3.09% (up from 2.67%), driven by the expanded range “which is resonating well with customers”. That said, changes to the product mix during the pandemic year meant the average order value fell to £82.70 from £97.14.
As mentioned, the first quarter of the new financial year has been strong and in fact it was “a record quarter for revenue with each month improving sequentially”. It reported revenue of £5.7 million. And Q1 rose 45% compared to Q4, “driven by very strong sales of spring/summer product from early in the season”. The number of orders tripled year on year with a record quarter for both new and repeat orders and with cost of acquisition less than half that of pre-pandemic levels.
The Q1 increase in sales was across all key categories “with both casual and going-out styles selling very quickly. Standout winners have been dresses, tops, knitwear and denim”.
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