Womenswear retailer Sosandar is continuing to move at pace from its original e-tail business model into one that includes physical stores.
Sosandar
On Monday, along with its festive season trading update, it announced two new store lease agreements.
But first, how did it fare in the recent ‘Golden Quarter’? It said the three months to the end of December actually saw revenue falling year on year as it “continued its transition away from price promotional activity”.
Revenue dropped to £12.12 million from £14.3 million a year earlier.
The company had previously been one of the fastest-growing fashion firms in the UK as far as revenue was concerned with massive increases as each quarter went by. But, as the company referenced, falling sales aren’t necessarily a bad thing if they come with increasing profit, and that was the case in this quarter.
The sales figure actually represented an increase of approximately 50% against each of the prior quarters (Q1 and Q2 of the FY25 period), “a significant step up in comparison to the prior year when Q3 FY24 revenues increased against each of Q1 and Q2 FY24 by 25% and 31%, respectively”.
And the gross margin of 64.7% increased significantly from 58.3% in the prior year “reflecting margin enhancement prioritisation”.
As well as the material improvement in gross margin year on year, it also rose versus H1 FY25 when it was 62.2%. The company said the uplift in margin is “now being delivered on a sustained basis and provides the foundation from which to drive sustainable and profitable cash-generative growth” over the long term towards its strategic objective of £10 million profit before tax (PBT).
It saw a “continued positive swing” in its trajectory as far as PBT was concerned as a result of the “continued prioritisation of margin enhancement and profitability ahead of revenue growth, in line with our strategic focus”.
And with net cash at the end of the year of £8.2 million, compared to £7 million in late November, the group can continue to self-fund its planned store rollout as well as other projects.
Regarding what sold, it saw strong sales of partywear, as could be expected given the time of year, as well as particularly strong sales in its core categories of knitwear and denim.
Trading with its well-established third-party partners “continued to be strong”, with Sosandar “being one of the top-selling brands across all third-party partners including NEXT and M&S”.
But as well as strength with its partners, its own four active stores “all performed well over the period, and we continue to see sales tracking in line with our expectations, with strong footfall and conversion and a demonstrable uplift in traffic to Sosandar.com in the geographical areas where the stores have opened”.
Overall trading remains in line with market expectations for the current financial year, “with January starting well and pleasing levels of full price sales, despite the well-publicised challenging macro-environment”. It believes that market expectations for the year ending 31 March 2025 are currently revenues of £40.5 million and PBT of £1 million.
And those new store agreements? It has signed two new lease agreements for its own stores, in Bath and Harrogate. Both locations are said to “meet Sosandar’s strict criteria of top tier, thriving locations, where Sosandar customers over-index”.
The picturesque city and town are in geographically very different parts of the UK but both have a shared history as fashionable spa destinations and continue to have plenty of appeal both for tourists and business events. They also share an affluent consumer base who, as the company pointed out, are likely to embrace what Sosandar has to offer.
In Bath, the store is located in SouthGate, the main shopping area in the heart of the city. It’s close to the thoroughfare of Bath Spa railway station with convenient underground parking. The store is in a prime position, adjacent to retailers such as Reiss and Oliver Bonas.
Meanwhile, Harrogate is one of the largest commercial centres in North Yorkshire and home to 76,800 people. The store is in a prime trading position on James Street, surrounded by other established retailers such as Oliver Bonas, White Company and Mint Velvet.
German retail sales rose in 2024, but growth should be more modest this year due to the high level of uncertainty, according to retail association HDE.
Last year, retail sales rose 1.1% compared to the previous year in inflation-adjusted terms, official data showed on Friday. The HDE forecasts 0.5% growth in real terms this year.
“Consumption and the retail sector in Germany will not really gain momentum in 2025 either,” said HDE managing director Stefan Genth. “There is simply too much uncertainty,” he said. “Wars, high energy costs and overall economic stagnation are a toxic cocktail for consumption.”
In nominal terms, retail sales rose by 2.5% in 2024 and are expected to grow by 2.0% in 2025, according to HDE’s forecast.
The latest HDE survey with 700 retailers shows that 22% of respondents expect sales to increase this year, while almost half of them expect results to be below the previous year’s level.
In December, retail sales fell by 1.6% compared with the previous month, official data showed. Analysts had predicted a 0.2% increase.
Many big names in UK retail had a good Christmas season — despite the sector being generally sluggish — but it seems John Lewis Partnership (JLP) may not have been one of them.
The retailer — which operates its eponymous department stores and webstore, plus Waitrose supermarkets — has missed its profit target after a disappointing festive season.
It hasn’t shared any info officially but internal documents seen by The Telegraph suggest bad news to come when it does release its results.
Those internal documents have only been shared with staff so far with the company saying that sales have fallen short of expectations and it’s unlikely to achieve its hoped-for £131 million full-year profit.
The company is said to have blamed “lower consumer confidence and weaker than expected market confidence” for the sales miss in the month to 21 December, although also the fact that key trading days fell outside the period.
Sales targets were missed at both of the firm’s chains, although the newspaper said it still claimed it outperformed rivals and staff should be “proud of our performance”.
It will be interesting therefore to see exactly what its figures were as a number of rivals have actually reported a good Christmas. If its stores have beaten other supermarkets and chains like M&S, perhaps its targets were too ambitious in the first place.
We won’t know for a while, but we do know that with M&S resurgent, JLP’s supermarkets and department stores have lost some of their lustre as the destination of choice for Britain’s middle classes.
So what were the firm’s benchmarks? Back in September it had said it was seeing strong demand and expected a significant rise in profits for the year to January. The prior year’s pre-tax profit had been £56 million and the year before that it made a loss.
It had also talked about its turnaround efforts paying off and that it was seeing a “considerable improvement” in performance, with the John Lewis chain in particular expected to benefit from a buoyant second half.
It’s been rumoured for some time that he would exit the label but it’s not yet known what his next step will be.
Jones has been widely praised for his work at Dior with his latest men’s collection shown this month being hailed as a success.
He’s been a key creative at LVMH having also designed its Fendi women’s collections. And he helmed Louis Vuitton’s menswear before he joined Dior.
The company said it “wishes to express its deepest gratitude” to the designer “who has accelerated the development of Men’s collections internationally and has greatly contributed to the worldwide influence of the House by creating an inspiring wardrobe that is both classic and contemporary, and connected to some artists of our time”.
And Delphine Arnault, who’s chairman and CEO of Christian Dior Couture,added: “I am extremely grateful for the remarkable work done by Kim Jones, his studio, and the ateliers. With all his talent and creativity, he has constantly reinterpreted the House’s heritage with genuine freedom of tone and surprising, highly desirable artistic collaborations.”
Jones meanwhile called it a “true honour to have been able to create my collections within the House of Dior, a symbol of absolute excellence. I express my deep gratitude to my studio and the ateliers who have accompanied me on this wonderful journey. They have brought my creations to life. I would also like to take this opportunity to thank the artists and friends I have met through my collaborations. Lastly, I feel sincere gratitude towards Bernard and Delphine Arnault, who have given me their full support.”
Entertainment8 years ago