Sosandar will be opening its first set of bricks-and-mortar stores in spring 2024, calling the business ‘perfectly placed’ to develop its omnichannel strategy thanks to growing brand strength coupled with consumers increasingly shopping on the high street.
Providing a trading update covering the six-month period ended 30 September 2023 and an update on the expansion of its omnichannel strategy, the fashion retailer said it expects revenue to grow by 10% year on year for FY24 to £46.8m and to remain in profit during the transition, despite swinging to a loss in the first half of the year.
It added revenue in the year ending 31 March 2025 is also set to grow by 17% year on year to £54.6m with an upward trajectory in profitability.
On its physical store strategy, Sosandar said it has been informed by the success of recent partnerships and will open up 60% of the £55bn annual clothing market in the UK that is transacted in physical stores.
It added that the step into physical retail will ‘significantly expand’ the company’s addressable market into more locations where its loyal customers want to shop.
The investment in the store opening programme will be self-funded from Sosandar’s existing cash resources and will include people, store execution, infrastructure as well as supporting margin growth.
As it moves to being an omnichannel retailer, it said it is investing in moving away from price led promotions, which it called one of the key operating norms of pureplay retail.
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It will also significantly reduce price promotions in order to grow its margin by transitioning customer behaviour to the non-promotional led proposition it already operates successfully across all its third-party channels.
The retailer intends to operate this reduced promotional proposition across all sales channels by the time the stores launch in spring 2024, with the aim to begin delivering significantly higher gross margins, putting the business on a trajectory to deliver pre-tax profit margins of at least 10% in the medium-term.
In addition, due to strong interest from third parties overseas, Sosandar is expanding its presence internationally, revealing it has signed agreements with The Iconic in Australia and The Bay in Canada to begin selling online in Q4 of the current financial year ending 31 March 2024.
Co-CEOs Ali Hall and Julie Lavington said: “We are extremely excited about the next stage of our growth journey. Our decision to open our own stores is the logical next step as we look to offer our customers more ways to engage and shop with Sosandar.
“We know that the added value of being able to touch and feel our clothes will appeal to our target customers. With a clear roll-out plan in place and strict criteria around the location of potential stores, we are confident that our stores will enable us to accelerate our market share and increase the awareness of our brand.
Over the last three years Sosandar has added to its own successful online presence by becoming a top selling brand with third party online partnerships including M&S and Next.
This was followed by the recent launch as a flagship brand with Sainsbury’s both online and in-store.
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