Getting your brand name out there is so important for any company looking to score retail success.
Although headlines may tell you otherwise, it never happens overnight, it is a slow process getting noticed and then acclaimed.
So yesterday’s news from Sosandar (LON:SOS), that it has signed a licensing agreement with NEXT should prove very beneficial for the women’s fashion brand.
It will not show through immediately but probably by this time next year good signals could be expected.
Sosandar is an established women's fashion brand in the UK, targeting style-conscious women who have graduated from lower-quality, price-led alternatives.
The business sells predominantly own-label exclusive product designed and tested in-house.
The company sells through Sosandar.com and its growing number of its own stores.
It also has several high-value brand partnerships including with NEXT and Marks & Spencer.
The NEXT Agreement
NEXT has around 460 stores in the UK and Ireland and also an online presence in over 70 countries, selling the NEXT brand and over 700 other fashion, home and beauty brands including Sosandar.
Following the success of Sosandar's clothing range sold through NEXT, NEXT is extending its partnership to licensing the Sosandar brand to develop a homeware range.
NEXT is one of the largest homeware retailers in the UK and the licensing deal will combine NEXT's sourcing and quality expertise with Sosandar's design inspiration.
The range will include a full set of living room furniture and accessories, including sofas, accent chairs, rugs and lighting.
It will be sold online exclusively at NEXT.co.uk and expects to launch in Autumn 2025.
Not only does this deal kick up the Sosandar brand it is especially noteworthy that it requires no capital expenditure for the company.
It is part of Sosandar's ongoing strategy to leverage its strong and growing brand awareness, with a focus on further broadening its reach and continuing to drive brand equity.
Co-CEOs Ali Hall and Julie Lavington stated that:
"It is a proud moment for the Sosandar brand to be licensing through NEXT, a testament to the strength of what we have built.
This is a fantastic opportunity to leverage our brand equity and extend the success Sosandar has had through third party partnerships with little risk and no capital expenditure.
We will combine NEXT's specialist technical and sourcing skills with our design aesthetic and understanding of Sosandar customers to deliver an exciting and unique product range.
Importantly, the homeware range will broaden our reach into new audiences and enable existing customers to deepen their affinity to our brand."
Analyst View
Matthew McEachran at Singer Capital Markets has the group’s shares rated as a Buy, with a Price Objective of 31p a share, compared to the current 9.90p.
His current-year estimates to end-March 2025 are for lower sales revenues of £40.5m (£46.3m) but with a swing into an adjusted pre-tax profit of £1.0m (£0.3m loss), generating earnings of 0.4p per share.
For the 2026 year he goes for £48.7m in sales and a £1.5m profit, with 0.5p earnings.
In My View
I fancy this £24.8m capitalised group’s shares, now at 9.90p, as a useful punt in the retail sector that could so easily rise 50% and still have further upside.
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