Online Retailer Faces Challenges from M&S Incident
- Sosandar cuts profit guidance due to M&S cyber attack impact
- Disruptions in sales through M&S expected until August
- £2.6m cut from full-year sales expectations
- Adjusted pre-tax profit reduced to £400,000 from £1.4m forecast
- Revenue growth of 15% in Q1 to £9.5m
- Sales down 19% to £37.1m for the year
- Reduced price promotions improved margins and cash generation
- Focus on profitability of existing portfolio before opening new stores
- Inflection point for profitable, cash-generative growth
Sosandar, an online fashion retailer, has downgraded its profit and sales guidance due to the impact of the Marks & Spencer (M&S) cyber attack on its sales. The company’s second-largest third-party partner experienced disruptions since mid-April, leading to a £2.6 million reduction in full-year sales expectations. Sosandar now anticipates an adjusted pre-tax profit of £400,000, down from the previously forecasted £1.4 million. Despite this setback, the retailer reported a 15% revenue growth in Q1 to £9.5 million and a £200,000 adjusted pre-tax profit for the year ending March 31, up from the previous year’s £300,000 loss. Sales dropped 19% to £37.1 million due to a strategic move away from price promotions. Co-chief executives Ali Hall and Julie Lavington emphasized focusing on profitability of existing stores before opening new ones. They believe the company is at an inflection point for profitable, cash-generative growth. The M&S cyber incident has affected sales through M&S, which will continue until August.
Factuality Level: 8
Factuality Justification: The article provides accurate and objective information about Sosandar’s profit and sales guidance adjustments due to the M&S cyberattack and its decision to pause store openings. It also includes relevant financial figures and quotes from company executives discussing their strategy and growth plans.
Noise Level: 3
Noise Justification: The article provides relevant information about Sosandar’s profit and sales guidance adjustments due to the M&S cyberattack and its impact on sales. It also discusses the company’s decision to focus on profitable growth and transition away from price promotions. The article includes quotes from co-chief executives Ali Hall and Julie Lavington, as well as a mention of returning to revenue growth in Q1 FY26. However, it could provide more details about the specific consequences of the cyberattack and how Sosandar plans to mitigate them.
Financial Relevance: Yes
Financial Markets Impacted: No
Financial Rating Justification: The article discusses Sosandar’s downgraded profit and sales guidance due to the impact of a cyberattack on its sales through M&S, which is its second largest third-party partner. It has cut £2.6m from its full-year sales expectations and expects an adjusted pre-tax profit of £400,000 instead of the previously forecasted £1.4m. The company also reported a return to revenue growth during the first quarter with sales up 15% to £9.5m.
Presence Of Extreme Event: Yes
Nature Of Extreme Event: Technological Disruption (cyber-attacks)
Impact Rating Of The Extreme Event: Moderate
Extreme Rating Justification: The article mentions the impact of a cyberattack on Sosandar’s sales and operations, causing disruptions and affecting its profitability. Although it is not an extreme event in terms of deaths or injuries, it has had a moderate impact on the company’s financial performance and operations.
www.retailgazette.co.uk