Sosandar is set to open physical stores in Marlow and Chelmsford this autumn, marking its entry into brick-and-mortar retail.
- The fashion brand reported a 9% rise in revenue to £46.3m, despite a £300,000 loss before tax for FY24.
- The shift in strategy includes a reduction in price promotions to focus on margin growth, resulting in a profitable second half.
- Sosandar plans to expand to 50 stores in five years, enhancing its presence in premium retail locations.
- Third-party partnerships remain strong, with successful international ventures providing a positive outlook.
Sosandar is poised to launch its first physical stores in Marlow and Chelmsford this September, a strategic move into the realm of traditional retailing. Co-CEOs Ali Hall and Julie Lavington emphasise the importance of selecting locations with an existing strong customer base and a vibrant retail environment. The stores represent a significant channel for growth by tapping into areas with premium footfall.
In its recent financial report, Sosandar announced a commendable 9% increase in revenue, reaching £46.3m by the end of March 2024. However, the brand experienced a slight setback with a loss before tax of £300,000. This contrasts with the previous year’s profit before tax of £1.6m, highlighting the challenging yet transitional phase the company is navigating.
Chief Financial Officer Steve Dilks described the year as ‘a period of two halves,’ where the first half recorded a £1.3m loss. However, a strategic pivot towards enhancing margins rather than sales volume in the latter half yielded a £1m profit. This adjustment underscores the impact of Sosandar’s decision to reduce price promotions, which has significantly boosted margins despite slightly dampened website demand.
Looking ahead, Sosandar is optimistic about future growth, projecting revenue of £54.6m and a profit before tax of £1m for the next fiscal year. The gross margin improvements have been attributed to an 80% reduction in promotional activity, underscoring a strategic shift towards sustainable profitability.
The ambitious goal of establishing 50 stores over the next five years reflects Sosandar’s confidence in the potential of physical retail to complement its online presence. By choosing upmarket areas, the brand aims to solidify its standing among premium retailers such as Mint Velvet and The White Company.
Sosandar’s collaboration with third-party marketplaces, including Next, Marks & Spencer, and Very, continues to perform robustly. Co-CEO Julie Lavington notes the brand’s unexpected success in Australia with The Iconic marketplace, despite the absence of marketing efforts, demonstrating the brand’s appeal and providing momentum for future international partnerships.
Sosandar’s strategic focus on physical retail expansion and margin improvement positions it for sustainable growth.
