Sosandar has strategically shifted its pricing model, leading to a 27% decrease in sales but noticeable improvements in profit margins, reflecting their move towards full-price sales.
- The six-month period ending in September 2024 saw Sosandar’s sales drop from £22.2m to £16.2m, attributed largely to reduced promotional discounts.
- Despite lower sales, pre-tax losses were halved to £0.7m, underscoring improved profitability through margin enhancement.
- Sosandar successfully launched its first four retail stores in the UK, contributing to increased brand visibility and new customer acquisitions.
- Sosandar maintains strong collaborations with Next and M&S, further leveraging its brand through new in-store partnerships and revenue growth forecasts.
Sosandar has undertaken a significant transformation in its pricing strategy, resulting in a sales decline of 27%. For the six-month period ending September 2024, sales decreased to £16.2m from £22.2m previously. This decline is mainly due to the company’s deliberate move away from frequent discounting, reducing promotions by a noteworthy 85%.
Though sales have dipped, the shift has proven beneficial for Sosandar’s profitability. The company’s pre-tax losses reduced significantly, halving to £0.7m. The improvement in gross margin, rising to 62.2% from the previous year’s 55.4%, highlights Sosandar’s successful focus on enhancing profitability. Customers have begun adjusting to the full-price model, particularly when shopping through third-party partners like Next and M&S.
In a bid to expand its market presence, Sosandar has embarked on opening physical stores. Over the past six months, it unveiled its first four locations in the UK, experiencing robust trading and significant foot traffic. A substantial portion, 65% of purchases, were made by new customers, indicating strong brand appeal in these regions. Additionally, the company noticed a positive increase in online traffic corresponding to the areas housing these new stores.
Sosandar continues to strengthen its partner networks, having widened its collaboration with major retailers such as Next and M&S. A new in-store partnership at Arnotts in Dublin complements its online presence on Arnotts’ platform. Looking forward, the outlook remains positive with October and November trading meeting expectations. Revenues are anticipated to reach £40.5m with an expected pre-tax profit of £1m.
Co-CEOs Ali Hall and Julie Lavington expressed that the recent developments are instrumental in evolving Sosandar into a true multichannel retailer. Highlighting the brand’s increasing presence on high streets, they noted the positive response from customers, validating their decision to diversify shopping avenues. Hall and Lavington also pointed out a new licensing agreement with Next, aimed at expanding into the homeware sector. This step underscores the strength and potential of the Sosandar brand, positioning it well for future opportunities as it heads into a promising peak trading season.
Sosandar demonstrates a promising transition toward sustainable profitability through strategic adaptations and market expansions.
