Sosandar Halves Profit Forecast Amid Continued Impact of Marks and Spencer Cyberattack

Sosandar, the fashion retailer catering to style-conscious women, has announced a significant reduction in its profit forecast due to the ongoing fallout of the cyberattack on Marks and Spencer, which is one of its largest retail partners. The company revealed that the disruption to third-party partner sales caused by the breach would persist until at least August.

Marks and Spencer, whose online clothing deliveries have been severely affected since mid-April, does not anticipate full operational recovery until the end of July. This has resulted in a complete cessation of sales through the platform for Sosandar, further hindering the retailer’s performance during this challenging commercial environment.

Sosandar now projects its revenue for this financial year to grow by 18 per cent, reaching £43.6 million. However, its pre-tax profit forecast has dropped sharply to £400,000 from an earlier estimate of £1.5 million. This cautious outlook reflects issues stemming from the disruption at Marks and Spencer, exacerbated by a reticence to expand store operations in the current climate.

The company, founded in 2015 by ex-publishing professionals Alison Hall and Julie Lavington, made its name by addressing gaps in the high street fashion market. Initially selling solely online, Sosandar began collaborating with retailers such as Sainsbury’s, Next, and Marks and Spencer before starting to open physical stores last year. It currently operates six shops and remains focused on optimising the profitability of these locations before considering further expansion.

Sosandar’s results also reflect the broader pressures on fashion retailers as consumers tighten discretionary spending amidst a cost-of-living crisis. A deliberate pivot away from price promotions to enhance profit margins has also impacted revenues, which fell from £46.3 million to £37.1 million for the year ending March 31. Despite this, adjusted pre-tax profit improved to £200,000 compared with a loss of £300,000 in the previous financial year, though one-off figures linked to warehouse relocation and stock writedowns resulted in a small overall loss.

Shares in Sosandar have fallen by approximately 50 per cent over the past five years, with the latest trading session seeing a drop of nearly 22 per cent to 6¼p per share. However, the leadership remains optimistic, stating that the business is at an “inflection point” and prepared for sustained profitable growth through leveraging its strong brand equity and existing multi-channel presence.