Customer acquisition costs drag down Sosandar shares

Shares in AIM-listed online clothing retailer Sosandar (LON:SOS) dropped by 5.55% to 26.68p (as of 14:50 GMT) despite revenues for the three months ended 31st December beating expectations. Management said that they intended to continue investing in customer acquisition for the remainder of the financial year but warned that this would contribute to the company booking a net loss.

Joint CEOs Ali Hall and Julie Lavington commented: “We are delighted to be reporting on an exceptional period of growth with sustained momentum across the key trading months to 31 December. It is pleasing that, as expected, following our increased investment in marketing, product and team we are seeing accelerated growth across all our KPIs. It is also testament to the quality of our product range that once we have acquired the customers they are becoming highly engaged with our brand.

“The opportunity we identified appears to be bigger that we first thought, with the success of new product areas helping to drive repeat purchases increasing the potential for future ranges. This has been enhanced by the successful trial in TV advertising which, combined with the already established channels of social, direct mail and PR, expands our ability to attract more new customers than originally anticipated.

“Acquisition of customers is nothing without successful retention and that’s why it is so pleasing to see that repeat customers in January, a traditionally difficult trading period, are tracking higher than in the peak Autumn/Winter period helping to continually improve the ever-growing lifetime revenue number“.