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Sosandar sees revenues soaring during pandemic without resorting to discounts

The initial dip in demand in March prompted discounts to attract customers, hitting margins

Sosandar - Sosandar sees revenues soaring during pandemic without resorting to discounts

Sosandar PLC (LON:SOS) said revenue and traffic for April and May soared 62% and 98% respectively despite the general downturn in the clothing market.

The online fashion retailer said it was due to the large customer base gained through previous marketing investment.

READ: Sosandar expects wider loss, drops new year guidance

The AIM-listed firm, which proposes comfortable but trendy garments, shifted to more casual ranges during lockdown and sold out in days some loungewear items, denim and casual summer dresses.

The initial dip in demand in March prompted discounts to attract customers, hitting margins, however Sosandar has now shifted back to full price.

Cash at the end of May was £4.4mln, remaining flat compared to the month before.

Revenue for the year to March is expected to double, but loss will be larger than expected due to a spike in returns and discounts during lockdown, alongside high promotional activity earlier in the year. Margin is expected to drop by 5.5%.

"This is a reassuring trading update highlighting the ability of the company to quickly pivot from a customer acquisition growth strategy to one of efficiency, utilising the strength of the existing customer database to generate continued revenue," analysts at Shore Capital commented.

"It is also worth noting that they have been able to generate more new customers from much reduced spend highlighting, the efficiencies in acquisition and increased brand awareness resulting from previous marketing activities."

Shares climbed 34% to 11.7p on Tuesday at the opening bell.

--Adds analyst's comment--

Quick facts: Sosandar

Price: 16.625 GBX

AIM:SOS
Market: AIM
Market Cap: £31.96 m
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