Sosandar achieves record quarterly performance but remains loss-making
The online retailer’s revenue rose by 6% to GBP4mln in the three months to December 31, when it also cut quarterly underlying losses by 60%. The period ended with GBP3.9mln in the bank.
The performance was delivered despite a 66% reduction in marketing spend, as the AIM-listed firm switched from customer acquisition between September and November to the preservation of cash and trading the database during December.
The good numbers were attributed to the expansion of the product range throughout the year, with loungerwear, knitwear, denim and outerwear trading particularly well.
Returns were down to 46% from 49% in the same period in 2019, reflecting the change in product mix, while the size-inclusive clothier posted strong sales in partnership with John Lewis and Next PLC (LON:NXT).
The new year began with the launch of a new capsule range of activewear which “is showing promising early results”, Sosandar said, while Spring designs have been planned with COVID-19 restrictions in mind.
“The strong cash position of the balance sheet bodes well for future growth when the company can turn back on the controlled marketing expenditure, using the learnings throughout 2020 and focusing on targeted return on investment,” analysts at house broker Shore Capital commented.
“In our view, the recent trading momentum reflects both the agility and speed of the management team set against the most challenging retail trading conditions in living memory. Given the Covid headwinds of 2020 Sosandar has been able to successfully pivot towards casualwear and away from occasion wear, given that consumers remain in lockdown 3.0 and are not currently going ‘out, out’ to social occasions.”
Shares shed 8% to 17p on Wednesday at the opening bell.
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