Womenswear retailer Sosandar is continuing to move at pace from its original e-tail business model into one that includes physical stores.

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.