Sosandar has posted a 27% drop in sales for the last six months, as it shifted its pricing strategy to encourage customers to pay full RRP.
The fashion retailer narrowed its pre-tax losses by 50% to £0.7m in the half to 30 September as sales fell to £16.2m, down from £22.2m a year earlier.
The decline in revenue was attributed to Sosandar’s transition away from frequent price promotions, reducing the number of discounts on its site by 85%.
Despite this, it said the year-on-year variance in sales narrowed each month, with customers growing accustomed to paying full RRP, similar to their experience when purchasing through third-party partners such as Next and M&S.
The retailer’s gross margin improved to 62.2% compared to 55.4% in the previous year, reflecting the brand’s focus on enhancing profitability and margin. Its strategy to boost margins while managing costs resulted in a significant reduction in pre-tax losses.
Related Story
During the period, Sosandar opened its first four physical stores in the UK, with strong trading and high foot traffic.
Around 65% of purchases in-store were made by new customers, and the company saw a noticeable uplift in online traffic in the areas where the stores are located.
Sosandar also expanded its partnerships, continuing successful relationships with Next and M&S, while launching in-store at Arnotts in Dublin, Ireland, after selling online through the retailer’s website.
Looking ahead, the business confirmed that trading in October and November has aligned with full-year market expectations, with revenue forecast to reach £40.5m and a pre-tax profit of £1m.
The company has seen a positive swing in margins, with the average gross margin reaching 64%, up from 62.2% in the first half, as customers continue to adapt to the full-price model.
Co-CEOs Ali Hall and Julie Lavington said: “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.
”Post period end we signed an agreement with Next for our brand to be licensed to develop a homeware range, providing further validation of the strength of the Sosandar brand. This shows the leverage and brand equity that we have built and will allow us to broaden our reach into new audiences and enable existing customers to deepen their affinity to our brand.
”Trading in the second half of the financial year to date has been encouraging, across all our channels, as we head into peak season. In the lead up to Christmas we have seen extremely strong sales of occasionwear, knitwear, including knitted dresses, and denim.”
Click here to sign up to Retail Gazette‘s free daily email newsletter
