The recipient of Retail Week’s Emerging Retailer award in 2020, Sosandar is a rapidly growing online womenswear brand specifically targeted at a generation of women who have graduated from throwaway fashion and are looking for affordable clothing with a premium, trend-led feel.  

The etailer narrowed its losses in the year to March 31, as an expanding product offer and a growing number of online partnerships with major retailers drove revenue growth and took it close to break-even for the first time.

Sales surged 142% year on year to £29.5m, driven by a 65% increase in the number of active customers to 13.2 million, and more frequent purchasing.

 

Although it remained in the red, Sosandar’s EBITDA loss of £200,000 marked an improvement on the £2.9m loss it booked a year ago. And having been profitable throughout the first quarter, chief financial officer Steve Wilks predicts that the business will be in the black over the full 2022/23 financial year. 

 

Exploiting the ongoing convergence of ecommerce and social media, Sosandar makes full use of the editorial expertise of its founders Ali Hall and Julie Lavington, who previously ran high street fashion and celebrity magazine Look, to engage with its customers through a variety of channels. 

The business model is built around trend-led, in-house designs that are sourced from an expanding network of suppliers globally and an outsourced logistics provider to support ambitious growth plans. These include a potential first foray overseas in the coming months.  

sosandar

Here are five things to know about Sosandar from our Prospect analysts: 

1. Partnerships are driving growth

The core Sosandar.com website might be the “anchor” of its success, but partnerships with other retailers have become an increasingly important part of the business over the past three years.  

Sosandar started trading with online fashion marketplace SilkFred in 2019, which Lavington said allowed it to test the third-party business model from a logistics point of view. It also has a partnership with discount fashion platform Secret Sales to sell end-of-season lines. 

Things moved up a gear in 2020 when Sosandar struck deals to sell via John Lewis and Next, and penned a similar partnership with Marks & Spencer that kicked off in the spring of 2021. Such tie-ups are significantly increasing brand awareness across a broad range of customer demographics.  

In early 2022 the etailer moved on to Next’s new Platform Plus. This allows for an extended Sosandar offer to be made available to Next customers, with items picked from Sosandar’s own warehouse and delivered via Next’s distribution network. 

This was followed by a wholesale agreement with The Very Group in March 2022, with Sosandar reporting “positive early momentum”.  

With an increased focus on partnering with such major retailers, Sosandar’s partnership with SilkFred has quietly been pulled.  

Speaking to the press following its preliminary results for 2021/22, finance boss Steve Wilks revealed that sales made through third-party websites now account for a third of Sosandar’s overall revenues. That proportion is only likely to increase further in the coming years.

 

2. Looking to new markets

Sosandar hasn’t specified the form that its international expansion could take, but the etailer will already have established some brand awareness outside of the UK through its partnerships with Next, M&S and The Very Group, all of which have an international aspect to their online operations. 

Potential partnerships with ecosystems such as Asos or Zalando could also be used to grow its presence in new markets, providing Sosandar with an insight into markets where its offer proves popular ahead of any dedicated developments. 

The German and Dutch markets have proved receptive to UK fashion exports in the past, by virtue of their similar demographics and seasons, so the retailer could seek to develop online partnerships with the likes of Kaufhof or de Bijenkorf to test the waters and heighten awareness. 

Further afield, Nordstrom or Van Maur could be potential partners if Sosandar decides it wants to venture as far as the US. While this has proved a harder market to crack for UK retailers, fashion brands such as Fat Face are currently expanding cautiously in the country having launched a dedicated website and started opening stores a few years ago.

3. Growing appeal and loyalty

Sosandar has grown rapidly since its inception six years ago, driven by an ongoing increase in customer numbers and more frequent purchasing as the product offer has been expanded. 

While the number of active customers rose 65% to 223,253 in 2021/22, order numbers surged 84% to 508,437, with average order frequency increasing by 10% to 2.28 times a year. Underlining its growing appeal and increasingly loyal customer base, five years ago customers placed an average of 1.46 orders a year.

 

The etailer has revealed that repeat orders nearly doubled from 189,703 to 366,848 in 2021/22, while conversion rates also moved ahead strongly, rising from 3.1% to 3.9%, which management says reflects the retailer’s “unique creative process and highly effective lifestyle imagery”. 

A small uptick in average order value, which rose 9% to £90.39 in 2021/22, also contributed to the stellar growth. 

Building on this, Sosandar is continuing to extend the offer in 2022/23 and says it is “fast-tracking” the development of categories such as occasionwear, swim and beach, and blazers and suits. It is also adding new shapes and extending length varieties in a bid to capture an even wider customer base. 

4. Shoring up the balance sheet 

Despite raising £5.3m through its launch on the Alternative Investment Market (AIM) of the London Stock Exchange towards the end of 2017, Sosandar had to resort to two further rounds of fundraising in 2019/20, accruing an additional £12m to fund ongoing development plans – strengthening its design capability, widening its product range and trialling additional marketing channels – and to get it through the pandemic.

A further £5.8m was raised in another placing in May 2021, to invest in greater levels of inventory, buying more widely and deeply across its product categories and putting more stock into its third-party retailers as well as its own site to meet the growing demand. 

With the brand set to move into profitability during the 2022/23 financial year, management will be hoping that these regular fundraising rounds will become a thing of the past. 

Indeed, as the scale of the business has increased, Sosandar has been able to forward book factory capacity, meaning it can agree some prices for the season knowing that larger volumes will be required. 

5. Revenues predicted to hit £100m in five years

Sosandar is forecasting revenue of £42.5m in its current financial year to March 2023 – a level that would represent a 44.3% increase on the previous year.

As its partnerships mature, growth is expected to continue at robust levels over the next few years.

According to Prospect forecasts, total revenues are set to break the £100m barrier by 2026/27. That will, however, depend on the ongoing success of its existing third-party agreements and the signing of additional new agreements – including internationally – in the coming years.