Sosandar Regulatory News (SOS)

Sosandar plc

Trading Update

A record quarter and continued substantial reduction in EBITDA loss

Sosandar, the online women's fashion brand, is pleased to provide the following trading update covering the three-month period ended 31 December 2020.

The Company has delivered a record quarter for revenue and number of orders along with a substantial improvement in EBITDA versus the same period in the prior year.

Highlights:

· Revenue of £3.98m, up 6% year on year (Q3 2019: £3.80m) delivered with a £1.61m (66%) reduction in marketing spend

· EBITDA loss reduced by c.60% compared to the same period in the prior year

· Continued agility in responding to changing Covid restrictions, pivoting from successful customer acquisition strategy between September and November to pulling back on marketing and trading the expanded customer database in December as restrictions became more severe

· December revenue was equal to revenue in September 2020, significantly better than anticipated given pivot to minimal marketing spend during the month (c.10% of December 2019 spend)

· Continued improvement in returns, reducing to 46% (2019: 49%), reflecting the change in product mix

· Strong sales with John Lewis and Next, with December being the highest month to date reflecting continued expansion of the product range

· Net cash of £3.90m as at 31 December 2020, reflecting the strong trading performance and continued careful cost management

This record performance for a quarter, delivered against very strong prior year comparatives, has been achieved despite the challenging market backdrop and a significant reduction in marketing spend. Utilising learnings from the previous year, the Company has been able to maximise its return on investment from marketing, successfully tailoring its approach in response to further national restrictions, switching between carefully controlled customer acquisition between September and November to the preservation of cash and trading the database during December.

The investment made during the year in expanding the product range has been pivotal to the trading performance, with new ranges resonating well with customers. Loungewear, knitwear, denim and outerwear have traded particularly well. Further range development is ongoing with a capsule range of activewear launched in January 2021 which is showing promising early results. Since the onset of the Covid-19 pandemic, the Company has proven its agility by fast tracking developments in its product range and adapting its style of customer communication to reflect the evolving circumstances.

Following growth in the customer database through autumn, the Company is well placed to successfully navigate the next few months, with the focus being mostly on engaging with existing customers as well as prospects while the current lockdown measures endure. The Company remains flexible in its approach; product ranges for spring have been carefully planned with Covid-19 restrictions in mind and therefore focusing more on casual wear. January trading has already started well, and knitwear, loungewear, outerwear and denim all continue to perform very strongly.

Sosandar has a diversified and flexible supply base and does not expect to see any significant impact from Brexit on its ability to service its customers.

The Company has continued to demonstrate strong cash management, with £3.90m available at 31 December 2020. This reflects the strong trading performance during the period as well as the focus on cost control whilst ensuring return on investment is maximised.

Ali Hall and Julie Lavington, Co-CEOs commented:

"We are extremely pleased to report another period of record performance, particularly given the significantly reduced marketing spend and extremely strong comparatives achieved in the prior year. It is testament to the relevance and quality of our product that we have been able to deliver such a performance without the seasonal strong sales of party dresses, and shows our ability to understand and cater to our customers' needs.

The agile nature of our business has enabled us to adapt quickly to the challenges and uncertainties within the retail sector. The resilience that the business has shown both operationally and financially demonstrates the strength of our business model and relevance of our products and customer engagement across a large end market.

Whilst the external environment continues to be uncertain, the scale of our opportunity has not changed, and the results we have delivered reaffirm our belief that there is significant further demand for our products within our target market."

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About Sosandar PLC

Sosandar is an online womenswear brand, specifically targeted at a generation of women who have graduated from throwaway fashion and are looking for quality, affordable clothing with a premium, trend-led aesthetic. This is a section of the market that is currently being underserved.

Sosandar was launched in September 2016. The Sosandar business model is built around using trend-led, exclusive designs produced in-house and then manufactured using a variety of global suppliers. Sosandar caters for a growing market of fashion-conscious women, while utilising an outsourced logistics provider that can support its planned growth over the coming years.

Sosandar's founders are Ali Hall and Julie Lavington, who previously launched and ran high street fashion magazine Look, as editor and publishing director respectively. They have a combined experience of over 35 years in the fashion industry.

More information is available at www.sosandar-ir.com