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Online fashion thrives for new retailer where women call the shots

Nov 23 2018 20:06
William Mathis, Bloomberg

Online-only British fashion retailer Sosandar is racking up big returns for shareholders as the women who run the brand connect with target customers.

The Wilmslow, England-based company has grown rapidly since it went public a year ago. Defying the gloom among the UK’s bricks-and-mortar retailers, Sosandar saw its revenue grow more than 400% in the six months through September.

Founders Julie Lavington and Ali Hall seized an opportunity to woo women their own age who are dissatisfied with established apparel chains but don’t find the right clothes at millennial-focused online retailers.

The company’s biggest buyers are females between the ages of 35 and 55.

"We are two women who are in the demographic," co-chief executive officer Lavington said by telephone. "It comes from a place of knowing and understanding our customers."

While the company is still small, with a market value of about £40m (R713m), the stock has almost doubled this year. That makes it the second-best performer among UK retail and consumer stocks, behind grocer Ocado, according to data compiled by Bloomberg.

Heavy spender

Sosandar offers classics such as cheetah-print faux fur coats for £139 (R2 478) and midnight blue velvet dresses for £79 (R1 408). The company aims to lure customers away from ailing British department stores like Debenhams and Marks & Spencer as they shift to sell more online.

The upstart is spending heavily to fuel the expansion, and it posted a loss of almost £2m (R35m) in the six-month period, the company reported this week. As sales grow, it expects to turn profitable and ultimately expand outside the UK to Europe and the US, Lavington said.

For now, Sosandar’s revenue growth rather than profit will drive investor appetite, according to John Stevenson, retail analyst at Peel Hunt. The sales, growing customer base and improving conversion rate are all encouraging signs, he said.

Lavington and Hall have worked in the British fashion industry for decades, most recently running the magazine Look.

Sosandar began trading last November after a reverse takeover by defunct mining company Orogen, a procedure small companies can use to enter the stock market without an initial public offering.

Men at top

The executives are an exception in an industry that caters to women but tends to pick men as leaders. Women run only two of the 27 members of the FTSE All-Share General Retailers Index: home-improvement retailer Kingfisher and greeting-card company Card Factory. Clothiers such as Debenhams, Marks & Spencer and Asos have men at the top.

Some customers say they can tell the difference. Sammy Duder, a 43-year-old fashion blogger in London, first noticed a red leopard-print Sosandar dress on a friend about eight months ago. She soon began posting some of the company’s clothing on her Instagram feed, kindling interest among her 12 000 followers, mostly women 30 to 45 years old, she said.

"When you get a company that’s so feminine, it strikes a chord," Duder said. "You want to support them. It could be me running that company."

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