Sosandar sales rise but listing costs hurt profits

By

Sandra Halliday

Published
Mar 29, 2018

Revenue and gross profit both accelerated at womenswear e-tailer Sosandar in the nine months to the end of last year, but while the business is clearly progressing, the bottom line is that the firm is still heavily loss-making.

The company aims to fill the gap between young fashion styles and the mature market, targeting women who are neither young nor old and who want premium fashion.

It listed on the AIM market of the London Stock Exchange last November following a reverse acquisition of parent firm Thread 35 Ltd by cash shell Orogen plc and costs linked to that procedure dented its final figures heavily.

So let's look at the good news first. Revenue rose to more than £861,000, from almost £141,000 a year ago, although the revenue comparison isn't an ideal one as the website only went live in September 2016. Meanwhile gross profit was just shy of £409,000, much better than the £72,000 of a year earlier.

However, the gross margin fell to 47.5% from 51.1% and the operating loss more than doubled to £2.129 million from just over £1 million. As mentioned, the costs of its acquisition and listing were to blame.

But back with the good news, the company saw a surging number of website sessions (up to 984,000 from 321,000) while the conversion rate was nearly 2%, up from less than 1% this time last year. The number of orders surged to 19,000 from less than 3,000 and average order value rose slightly to just over £96. 

The company also boosted its social media appeal with Facebook follower numbers rising almost fourfold to more than 31,000, while Instagram follower numbers leapt to 6,560 from just 240 in the few months after its launch. And the customer database now sits at more than 36,000 people, nearly 10 times what it was a year ago.

Joint CEOs Ali Hall and Julie Lavington said the business “continues to exceed management expectations. Awareness of Sosandar is growing ever stronger and the coverage and recognition that our products receive is promising for a brand so early in its lifecycle.”

They added that: “The fundraising in November has enabled us to increase our product range and we are already seeing good traction in our higher price point categories, including leather, outerwear and footwear. Our target market is affluent and has been long under-served and we continue to look forward to the future with great confidence."