Women’s fashion brand Sosandar lowers sales guidelines due to margin pressure

Women’s clothing brand Sosandar has cut annual sales guidance as it refocuses on returning to profitability after building out its physical retail footprint.

The Cheshire-based retailer now expects to achieve a turnover of £40m in the 2024 financial year, compared to £46.3m in the 12 months ending March 2024.

For the six months ending September, the group’s turnover fell by £6 million to £16.2 million as discount activity outside major planned sales events was scaled back.

However, the company’s priority on increasing margins and cutting costs helped reduce pre-tax losses from £1.3 million to around £700,000.

It also noted that trading had ‘started well’ this month, with sales up on last year and gross margins remaining strong ‘as we move towards our seasonal peak’.

As a result, Sosandar, who counts TV presenters Holly Willoughby, Susanna Reid and Christine Lampard as fans, still expects profits for the full year to March 2025 to reach £1 million.

Sosandar shares By mid-Tuesday afternoon, the stock was still down 6.2 percent to 10.1 cents, taking their losses since the start of the year to around 32 percent.

Ali Hall and Julie Lavington, co-founders of Sosandar, said they were ‘committed to delivering in line with our growth strategy, focusing on margin improvement to improve profitability, and we are already seeing the results of this in our performance’.

“This has continued into October and we remain excited about what lies ahead for Sosandar,” she added.

Sosandar recently opened its very first physical stores in Great Britain; they are based in Marlow, Chelmsford and Gateshead’s Metrocentre. It plans to launch another in the center of St David’s, Cardiff.

The AIM-listed company said it chose these locations because they are “affluent, thriving locations where Sosandar’s clients are over-indexing.”

Since these stores opened, the group noted that sales tracking was in line with forecasts, and website traffic had increased in the areas where these stores are located.

In addition, Sosandar reported ‘strong demand’ from online customers in Ireland, where the clothes can now be purchased in Arnotts, the country’s oldest and largest department store.

Matthew McEachran, analyst at Singer Capital Markets, said: “Markets have been impressed so far with Sosandar’s transition to a full-price, multi-channel brand.

‘Given the commentary on improved recent trading and the implication that the revenue impact of this move to fewer promotions is nearing an end, markets will now look ahead with more optimism.’