Sosandar revenue accelerates as TV ad, expanded range lift Q2 sales
Shares in Sosandar soared on Monday after the online fashion retailer announced that revenues for the first half of the year will be £2.8 million, a rise of 53% on the prior year.
The AIM-listed brand revealed in a trading update that the six month period ended 30 September 2019 benefited from strong sales across all product categories, particularly in new product areas such as denim.
Sales increased by 84% in the second quarter, supported by an impressive 112% increase in September against the same period last year. This was fuelled by the company’s first foray into TV advertising and out-of-home digital media, which saw it test in different TV regions, channels and programmes as well as across escalators at key London train and Tube stations throughout September.
And it seems momentum continues at the burgeoning business, with monthly net revenues (post returns) surpassing £1 million for the first time in October.
Investment in marketing and product
How has Sosandar, an online fashion business which had gross sales of under £0.9 million in the 11 months to July 2017, managed to make £1 million in just one month two years later?
The business led by joint CEOs Ali Hall and Julie Lavington has been ploughing investment into product, marketing and talent. New product categories such as denim and accessories are resonating well with customers and celebrities, while a team expansion across across all areas, including design, buying, merchandising and garment technology, has resulted in the product range, as measured by number of intake styles, more than doubling year-on-year.
This has been coupled with a significant investment in marketing, funded by the company after raising £7 million through a placing of new shares earlier this year. Sosandar said the marketing initiatives are helping increase brand recognition and awareness, as demonstrated by 224% month-on-month increase in the number of email subscriber sign-ups in September, the first month TV went live.
“Our ability as an online retailer to employ an agile strategy resulted in us focusing our customer acquisition activity on the important Autumn months towards the end of the period and carrying into current trading. As expected, the accelerated investment into marketing and product is producing strong results with record months in September and October,” explained Hall and Lavington in a statement.
“We are seeing strong engagement from our ever-expanding base of loyal existing customers and this will continue to increase as our product range grows further. We are delighted with the success of our new advertising activity and the board is confident that accelerating our future growth by increased investment in marketing (especially via TV) in this financial year is the right decision for our business,” they continued.
“With a widened product range offering, strong balance sheet, and a broadened, aggressive, and increasingly effective marketing strategy, we are confident about the full year."
Shares in the company increased by 25% on Monday morning to 20.12p.
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