Sosandar (SOS) Trading Update summary

Strategic shift and store rollout

• Opened first three stores in affluent UK locations (Marlow, Chelmsford, Gateshead) with strong trading and increased local website traffic.

• Transitioned to a multichannel retailer, aiming to capture a share of the £60bn UK physical clothing market.

• Store openings are driving brand awareness, higher margins, and more efficient marketing.

• Fourth store in Cardiff set to open imminently, with positive customer feedback on in-store experience.

• Store design is consistent, adapted to local physical spaces and landlord requirements.

Financial performance and profitability

• H1 FY25 revenue was £16.2m, down from £22.2m in H1 FY24, reflecting a focus on full-price sales and reduced promotions.

• Gross margin improved to 62.2% from 55.4% YoY, with pre-tax loss reduced to £0.7m from £1.3m.

• Net cash position at £7m, after investment in new stores and stock for Autumn/Winter.

• FY25 revenue guidance moderated to £40m, but profit expectations remain unchanged due to margin strength.

• Strategic goal remains a pre-tax profit margin of at least £10m on £100m revenue.

Operational insights and partner performance

• Third-party sales remain strong, with Sosandar a top brand for partners like Next, M&S, and The Iconic.

• Store openings have a halo effect, boosting both local in-store and online sales.

• Click and collect and in-store returns are available, enhancing customer convenience.

• Product selection in stores is tailored to local demographics and bestsellers, with ongoing range adaptation.

• Partners welcome store openings, as they also see increased sales in those areas.