Sosandar shares struggle as group unveils placing plans

Sosandar plans to raise £4.5 million through a placement to accelerate the execution of its omnichannel strategy through further equity investments.

The fashion retailer said the investment will enable it to strengthen its in-store product range with external partners, including Sainsbury’s, by the end of the year.

The proceeds from the placement will also create more balance sheet space to accelerate other growth initiatives, the group said, and enable accelerated investments in the company’s “proven customer acquisition model.”

Sosandar Shares fell sharply, falling 12.01 percent or 3.17p to 23.23p, after falling 15 percent in the past year.

The group plans to place just over 18.18 million new ordinary shares via an accelerated bookbuild of 22 pence each to raise approximately £4 million.

In addition, Sosandar said it intends to launch a separate offer of up to 2.27 million new common shares to raise a further £500,000.

The retailer said: ‘The board believes there is an attractive opportunity to accelerate the roll-out of Sosandar’s in-store product range with external partners.

As a new channel to market, offering Sosandar’s product range in-store will result in increased brand awareness, which the Board believes will ultimately help accelerate the company’s market share growth.

“The board also believes that by becoming an omnichannel brand, the company will gain more potential high-quality partners internationally.

“As such, the Board believes it is in the best interest of shareholders to raise additional equity so that the Company can fully capitalize on these opportunities and accelerate its future growth.”

In January, Sosandar reiterated his full-year 2023 expectations after revealing that Q3 revenues hit a new all-time high.

Revenues were up 30 per cent in the three months ended December 31 to reach £11.6m, with strong growth across all sales channels and a new record quarter for external partners in the fifth consecutive quarter of profitability for the group.

Average order value over the period rose 11 per cent to £106.37, reflecting customers buying more expensive items and categories, while gross margins rose from 55.8 per cent to 56.8 per cent.

In January, Sosandar confirmed that it continued to trade in line with market expectations of revenue of £42.8m and pre-tax profit of £2m for the current financial year.

Today, Sosandar said, “As announced in the company’s trading update released on January 10, 2023, the company reported strong sales growth across all sales channels, with another record quarter for third-party partners, resulting in another profitable quarter for the group after the profitable in both H2 FY22 and H1 FY23.’