Sosandar’s strategic shift to full pricing sees a 27% sales drop but boosts profitability.
- Sales fell to £16.2m, down from £22.2m, as discount cuts took effect.
- Pre-tax losses reduced significantly by 50% to £0.7m, showcasing strategic success.
- Physical store openings led to increased foot traffic and new customer acquisitions.
- Sosandar expands partnerships and forecasts strong revenue growth.
Sosandar, the fashion retailer, has reported a sales decline of 27% over the last six months as it embraced a new full-price strategy. This strategic shift reduced the reliance on frequent discounting, cutting site-wide promotions by 85%. As a result, sales fell to £16.2 million, down from £22.2 million in the same period the previous year.
Despite the downturn in sales, the company’s approach positively impacted its financial health. It halved its pre-tax losses to £0.7 million by focusing on enhancing profitability and margins. The gross margin improved to 62.2%, compared to 55.4% the prior year, reflecting this effective cost management.
Sosandar’s transition aimed to familiarise customers with paying full prices, similar to shopping experiences with partners like Next and M&S. Over time, the variance in sales figures has decreased, suggesting a successful adaptation process among consumers.
During this period, Sosandar opened four new physical stores in the UK, which experienced strong trading and high foot traffic. Approximately 65% of the in-store purchasers were new customers, and there was a notable increase in online traffic in these specific regions.
Sosandar also made strategic expansions in its partnerships, continuing collaborations with Next and M&S and launching in-store at Arnotts in Dublin. Looking ahead, trading in October and November aligns with market expectations, forecasting revenue to hit £40.5 million and pre-tax profit of £1 million.
The company’s co-CEOs, Ali Hall and Julie Lavington, highlighted the successful steps towards becoming a multichannel retailer. They noted that their brand’s presence on high streets and strong consumer reactions validated their strategic directions.
Additionally, Sosandar’s agreement with Next to develop a homeware range illustrates its growing brand strength and potential to reach new audiences. The positive sales trend is especially observed in high-demand categories such as occasion wear and knitwear as the festive season approaches.
Sosandar’s strategic shift to a full-pricing model demonstrates its efficacy in improving profitability while setting a strong foundation for future growth.
