Sosandar plans to raise £4.5million via a placing in efforts to accelerate the execution of its omni-channel strategy through further investment in stock.
The fashion retailer said the investment will enable it to bolster its product range in-store with third party partners, including Sainsbury’s, towards the end of the year.
Proceeds from the placing will also create further balance sheet headroom to fast-track other growth initiatives, the group said, and enable accelerated investment in the company’s ‘proven customer acquisition model’.
Plan: Sosandar plans to raise £4.5m via a placing to accelerate the execution of its omni-channel strategy
Sosandar shares fell sharply and were down 12.01 per cent or 3.17p to 23.23p, having fallen by 15 per cent in the last year.
The group is set to place just over 18.18million new ordinary shares via an accelerated bookbuild at 22p each to raise about £4million.
On top of that, Sosandar said it plans to carry out a separate offer of up to 2.27million new ordinary shares to raise a further £500,000.
The retailer said: ‘The board believes that there is a compelling opportunity to accelerate the roll-out of Sosandar’s product range in-store with third party partners.
‘As a new channel to market, the provision of Sosandar’s product range in-store will result in heightening brand awareness, which the board believes will ultimately help accelerate growth in the company’s market share.
‘The board also believes that becoming an omni-channel brand will provide the company with an increased breadth of quality potential partners internationally.
‘As such, the board believes that it is in the best interests of shareholders to raise additional equity for the company to fully capitalise on these opportunities and accelerate its future growth.’
In January, Sosandar reiterated its full-year 2023 guidance after revealing that revenues had hit a new record high in its third quarter.
Revenues were up 30 per cent in the three months ending 31 December at £11.6million, with strong growth across all sales channels and a new record quarter for third-party partners in a fifth consecutive quarter of profitability for the group.
Average order values over the period jumped 11 per cent to £106.37, reflecting customers buying into higher priced items and categories, while gross margins edged up from 55.8 per cent to 56.8 per cent.
Back in January, Sosandar confirmed that it was continuing to trade in line with market expectations of revenues of £42.8million and pre-tax profits of £2million for the current financial year.
Today, Sosandar said: ‘As announced in the Company’s trading update released on 10 January 2023, the Company reported strong revenue growth across all sales channels, with a new record quarter for third party partners, resulting in another profitable quarter for the Group following being profitable in both H2 FY22 and H1 FY23.’