All smiles at Sosandar as Q1 booms
Jul 7, 2020
Womenswear e-tailer Sosandar has been updating us regularly on its progress in recent months so there was little to surprise in its overall Q1 trading update. But the report did give a broader picture of just how strongly the brand is progressing and showed that it has emerged from the pandemic in a good position.
The company said it saw “year on year growth [in Q1] with significantly reduced losses as a result of [a] strategy shift implemented in response to Covid-19”.
The update covered the height of the lockdown and the early post-lockdown period (April 1 to June 30) and showed that the "resilient performance seen in April and May continued throughout June".
Total revenue in Q1 increased 54% year on year, “demonstrating the strength of the company's business model and continued demand for its offering”. That said, the comparisons were relatively easy given that Q1 in the previous year had been the quarter with the lowest revenue.
The company is still at a very early stage and remains loss-making for now, but it also said that the sales growth together with a significantly decreased marketing spend, meant losses in Q1 reduced by around 70% compared to the same period in the prior year.
Sales improvements during June actually edged it closer to breakeven for that month. June saw a strong gross margin due to a shift back to full-price purchases following some promotion and discounting in early April.
The company had adjusted its strategy as the implications of the pandemic and associated lockdown became clear. This included diversified product ranges adapted to changes in customer demand, with success in areas such as denim, linen and casual summer dresses, in addition to the industry-wide growth in loungewear.
It also slashed its marketing spend, with “increased frequency and a focus on high-quality, relevant communications successfully engaging with the customer base and converting prospects that have been established over time”.
This approach was clearly successful as it has seen a 24% increase in new customers over the quarter, and “robust” growth in returning customers, “demonstrating the longer-term impact of its acquisition marketing strategy in previous periods, and the benefits of holding a larger database”.
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