Sosandar PLC (AIM: SOS), the online women's fashion brand, is pleased to announce the following trading update covering the six month period ended 30 September 2019.
The Company expects to report revenue of £2.82 million for the period, a 53% increase against the same period in the prior year, reflecting progress made during the year so far, with Q2 up 84% and September up 112% against the same periods in the prior year. The Company is very pleased to report that October is already the first month that its net revenues (post returns) have surpassed £1 million. As previously reported, the Company made the strategic decision in Q1 to hold back customer acquisition funds to invest in future months, whilst also investing into product teams to help drive performance from Autumn/Winter 2019 onwards.
Acquisition funds have now been successfully deployed and this, combined with the up-front investment in team and product, have resulted in substantially higher growth in the important Autumn period. Record monthly revenues were delivered in September, which has been surpassed by October which is tracking over 100% up on the prior year and 44% up on this September.
July's oversubscribed placing has supported the Company's accelerated growth as planned. The Company has begun carefully using the proceeds to strengthen its design capability, widen the product range and to trial additional marketing channels. Sales during the period have been strong across all product categories, and especially in the new product areas such as denim. Average order value has shown a marginal decrease due to average unit price shifting slightly with the broadening of the product offering, selling proportionately more denim and jersey. Units per basket has increased year on year. Entering Q3, the Company expects to continue with strong full price sales performance and expects some increase in AOV as the cold weather drives sales of higher price point items such as leather and outerwear.
As announced at the Company's AGM, in September the Company began to use TV advertising and started to trial the use of out-of-home digital media for the first time. This has included testing in different TV regions, channels and programmes with re-investment into those showing the best engagement versus cost ratio and a test with digital panels across escalators at key London train and Tube stations. These new marketing initiatives are significantly increasing brand recognition and awareness. September, the first month TV went live, saw a record number of email subscriber sign-ups with a 224% increase on August and the equivalent to approximately six months' performance in the prior year.
Given the strong current trading and the very positive results achieved so far, the Board has taken the strategic decision to accelerate the growth of the business by investing further in TV advertising. Accordingly, marketing expenditure for the current financial year is expected to be higher than previously planned. This increased expenditure is expected to significantly enhance future growth through accelerated customer database growth and increasing frequency of purchase from a loyal and highly engaged following.
The investment that has been made into the product team 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 widening of the range has come through the additions of more choice within product types, and new categories such as denim and accessories. The new product range is resonating well with both customers and celebrities, with household names such as Mel B and Amanda Holden recently seen supporting the brand.
Over the period, customers have begun to place repeat orders more frequently, whilst the returns rate has reduced to 49%, from 52% in the prior year. This demonstrates the appeal of the Company's unique design aesthetic and customers' growing loyalty to the Sosandar brand.