By Geoffrey Smith
Investing.com -- Shares in Sosandar (LON:SOSS) leaped in early trading in London on Tuesday after the fashion startup defied the broader malaise in the U.K. retail sector with a second straight half-year profit and a 72% rise in sales.
The group was also upbeat about its outlook, despite signs that the U.K., where it makes nearly all its sales, is slipping into recession.
“Early autumn trading has been very positive with particular success in key growth areas of outerwear, knitwear and partywear,” the company said in a statement, adding that it was “confident” of further gains in market share.
Sosandar stock has been unable to detach itself from the general decline in U.K. equities this year, falling nearly 50%. However, by 04:40 ET (08:40 GMT), it was up 10.5%, just off the three-week high it hit at the open.
Sosandar said that it had profited from strong demand for smarter clothing, both formal and casual, during the period, and added that its new autumn and winter collection had met with sustained strong demand, even as the U.K. economy started to slow more dramatically.
The number of orders from its own website rose 43% from a year earlier, with new customers accounting for nearly a quarter of the total. Active customer numbers grew 33%, but the average order value failed to keep up with inflation, rising only 4% to 90 pounds ($102).
Gross profit slipped to 54.4% from 56.5% a year earlier, while net cash fell to £4.2 million as the company paid up to ensure timely delivery of stock for the key pre-Christmas season. It has started shipping heavier items by sea from China, something that requires longer lead times.
The company also announced a new partnership on Tuesday with ND Williams, adding to its existing deals with Next (LON:NXT), Marks and Spencer (LON:MKS), John Lewis and the Very Group.
Co-CEO Ali Hall told a conference call that while the group is considering expanding into foreign markets, there is “nothing imminent as there are still lots of growth opportunities in the U.K.”
“Opportunities to expand internationally are definitely there, to be exploited when the time is right,” Hall said.