18th Mar 2020 14:53
(Alliance News) - Online women's fashion brand Sosandar PLC on Wednesday warned that its trading in March will be "well below forecast" due to the coronavirus pandemic and, as a result, the company expects a widened loss for financial 2020.
The retailer expects net loss for the year to March-end to be between GBP6.5 million and GBP6.8 million. Revenue is predicted between GBP9.0 million and GBP9.3 million.
In financial 2019, the company recorded a net loss of GBP3.5 million and revenue of GBP4.4 million.
Shares in the company were down 50% at 5.70 pence each in London on Wednesday afternoon.
"During Q4 of the current financial year, the company experienced strong trading through January and February and into March resulting in revenue in the quarter to date up 203% on the previous year," Sosandar explained.
"However, the recent increasing macro-economic uncertainty associated with the Covid-19 outbreak is creating a significantly more challenging and volatile trading environment. As a result, sales over the past week have been substantially weaker than expected with margins also being impacted by increased customer incentives used."
The company expects the current challenging environment to continue in the immediate future and, as a result, estimates March trading to be "well below forecast".
Sosandar said it will reduce its marketing spend to conserve cash and will focus on repeat orders from existing customers rather than new customer acquisitions. It forecasts over GBP5 million cash at March-end.
By Tapan Panchal; [email protected]
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