Welcome to the Sosandar full year 2022 results webinar. All attendees are in listen only mode, and at the end of the presentation, there will be the opportunity to ask questions. This webinar is being recorded. I now hand over to Julie Lavington and Alison Hall, Co-CEOs, and Steve Dilks, CFO. Julie, over to you. Good morning, everybody, and thank you very much for joining us today. Just to talk about the agenda, first of all. The presentation will be about 35 minutes, and then we'd be delighted to take your questions at the end. As well as the usual sections on financials, KPIs, and strategy, we've dedicated a section in the presentation up front, which specifically looks at Sosandar's winning formula. Investors have been really keen to understand what is driving our success and what's unique about our business, which has enabled us to keep navigating the many external challenges that all businesses are facing. As part of our strategy section, after the financials, we'll be specifically addressing the market backdrop and looking at the challenges of the current economic climate and how we intend to navigate them. First, onto the highlights of the year and current trading. It's been a brilliant year. Revenue is up 142% year-on-year at GBP 29.5 million, and the key milestone was we were profitable in every month of H2. Underpinning that success was strong growth, both on our own site and through third parties, driven by an increased diversity of product mix, and there's also been a strong performance across all KPIs. We're very pleased to say that we've had a very strong start to the year. We've had a record quarter, so that's for April- June, with revenue of GBP 10.4 million, which is up 81% year-over-year, and that growth has been both our own site and with third parties. We've had record, records galore, record days, a record week just last week, and record conversion rates. Also, very importantly, we've been EBITDA positive in every month of the new financial year. That's now nine months, consecutive months of EBITDA positive. We've seen high demand across all product categories, but particularly strong sales in work wear, occasion wear, and holiday clothes. We successfully launched with The Very Group and Next Platform Plus. All this is demonstrating just how big the opportunity is for Sosandar. Our purpose is to dress women across the globe to feel sexy and chic. In doing this, our opportunity is to be one of the biggest womenswear brands in the world. There are six key areas that we've identified that together make up our winning formula and drive our success. First has been a cultural change in society and how this has created an opportunity for Sosandar to thrive and grow, the size of the addressable market, our differentiated product range, our unique creative process and use of imagery, our affluent high-spending customer base and very high retention rates, and then our company culture and how we run our business. We're gonna go through now each of these six areas. Starting off with an ageless society. The very reason Sosandar was born is that Ali and I identified a big societal shift towards an ageless society. You can see from the quotes here how increasingly age is no longer a barrier or a limitation, and people are less and less identified by their age. The phrase middle-aged is becoming meaningless, and people of all ages are rewriting every single rule about what you should do at what age. The effect that this has had is that all rules about dressing for your age have also gone out the window. Fashion and the way people dress is becoming equally ageless. To illustrate the point, you can see on here we have pictures of celebrities in their thirties, forties, sixties and even seventies, who are all dressing in a chic, sexy chic, youthful way. You can see age literally has no bearing on how they're dressing. Therefore, it gives us at Sosandar the massive opportunity to dress all women over 35. That addressable market of women over 35 that we target with Sosandar in the UK alone is a massive 20 million women, with 13 million in our core demographic of 35- 64. As age doesn't determine how women dress anymore, whatever age we recruit a customer at, our opportunity is to dress customers for their entire lives. These numbers represent only the UK. The same societal shift and the opportunity it represents exists in all developed countries across the world, giving us the opportunity to dress women right across the globe as the business scales. This huge addressable market are all united by a desire for on-trend, affordable, long-lasting, lifestyle appropriate clothes. Sosandar's magic is the successful execution of distinctive products and powerful communication, and this execution has captured the hearts and minds of our ever-growing customer base. This slide demonstrates what we actually do with product. As a clothing brand, our product is obviously everything. This is the key driver to success that makes everything work. From a practical level, we create head-to-toe outfits that flatter figures, whether our customer is a size six or a size 20 or anywhere in between. We give her a mid-level price point, we give her outfits she can always wear a bra with, outfits that are long lasting, a wide product range that covers all occasions, unique prints that are designed in-house, and unique shapes and the vibrant colors that she craves. On an emotional level as well, the clothes make women feel sexy and chic, boost her confidence, and make her feel both youthful and desirable. What amplifies our product range is the imagery we use to connect with our customers. We brought a unique creative process from our backgrounds in the media that completely turned retail industry norms on its head. Lifestyle imagery is really important as it brings the product to life and also creates an emotional connection with the customer as she buys into the lifestyle we're presenting. We're the only fashion brand to produce upscale lifestyle imagery and video for every product. We go from shoot to on site and on air in a matter of days, rather than taking the industry norm of months. Our imagery shows how to wear the product, which increases conversion and drives higher basket value by selling entire outfits. It's a big attraction for our third-party partners because our imagery is unique. We also changed the industry norm, as all our third parties refused lifestyle imagery from their partners. They only took imagery photographed on white backgrounds. We convinced each of them to do a test with our clothes on white backgrounds and then with our lifestyle imagery, and they saw the obvious increase in sales. Let us break their rules and have lifestyle imagery on their site. To come on now to talk more about our customer, we are extremely mindful of the challenges that are presented with difficult economic times, and we're more focused than ever on delivering value for money for our customers. The socio-demographic of our customers will give them some degree of cushioning against the rising cost of living. Of key importance is that Sosandar customers index very highly on Mosaic profiling against the top socio-demographic groups in the UK. Our customers are most likely to be high-income earners with successful careers and large houses in affluent areas. This is also reinforced by the data that we see in our own business. A tiny proportion of customers use Klarna compared to what would be typical for other fashion brands, as they have little need for spreading payments. Unlike many fashion retailers, we don't see a demonstrable uplift in sales around payday because our customers aren't waiting for payday in order to spend. We also see year-round strong sales in high-ticket items over GBP 200, such as leather jackets and dresses. We know our customers inside out. They have diverse wardrobe needs, they're affluent, and they shop regularly. The success of our products and communication is proven in the rapid rise in our key customer metrics. You can see here that the number of active customers has quadrupled in three years, now standing at around a quarter of a million people. An ever increasing proportion of those customers are becoming regular shoppers. That's now risen to 42% of the customers we recruit becoming repeat customers. The frequency of buying among these regular customers has rocketed. On average, a repeat customer now shops over four times a year. Finally, we come on to the sixth point, which is around our company culture. This underpins everything that we do, and it's driven our ability to execute well and to successfully navigate the many challenges that all businesses have faced over the last two and a half years. We're highly creative and innovative, challenging everything that we do to get better and better at what we do, to understand our customers better, to think ahead, to constantly innovate, both in the business and in our product for our customers. We're also highly disciplined and organized as a business, planning well, being proactive, anticipating challenges, and thinking ahead to the solutions. Utilizing data sits at the absolute heart of the business, meaning we're constantly honing and refining everything that we do. We combine creativity, discipline, and data with agility and speed of an entrepreneurial culture. That means we can adapt quickly to change, we can solve problems, and react to customer behavior. Our company culture is evident in every single area of the business, whether it's supply chain, product planning, marketing, or customer care. To give you a couple of examples, how we've continued to navigate the supply chain challenges has been by good strategic planning across a diverse supplier base, a diverse freight strategy, and the ability to adapt shipping methods quickly and working with strong partners. Also, in our marketing, we run this like it's a news desk. Expert planning, and then we combine that with ability to react quickly to product, weather, customer sentiment, so we always capture exactly what customers are thinking and feeling. I'm now gonna hand over to Steve, who will walk through how everything that Ali and I have just spoken about is evident in our financials and KPIs. Morning, everybody. Starting with our financial highlights, the first slide here shows our net revenue for FY22 was GBP 29.5 Million, which is 142% up on the prior year and 228% up on FY20. The growth in revenue was delivered through incredibly strong performance on both Sosandar.com and through each of our third-party partners who continued to go from strength to strength throughout the year. Our revenue in the first half of FY22 was equal to the entirety of the prior year. The year included a series of new records, including record monthly revenue in three consecutive months from September through to November. Return rates during the year normalized on a category by category level, which for us means mid- to late 40s%, depending on the time of year and what is selling at that time. In terms of profitability, on the right-hand side, we are delighted to report that as our revenue grew significantly, our losses reduced substantially. For FY22, our EBITDA loss was GBP 0.2 million, which compares with GBP 2.9 million in the prior year. This performance included a profitable second half at both EBITDA and PBT level, with every single month being profitable, including the traditionally quieter months of January and February. This improved performance shows the clear trajectory that we are on towards being profitable full year as we head into FY23. Next slide, please. In terms of gross margin, this improved significantly compared with the prior year, which reflected a more normal year being much less impacted by the COVID pandemic. During the year, as our scale has increased, we have seen margin improve, reflecting the benefit of larger order quantities, which has led to improved cost prices. In addition, we have continued to increase the proportion of stock being transported to the UK using cheaper and more environmentally friendly methods such as road and sea, and this trend will continue further into FY23. The margin in the prior year was a result of greater promotional activity to ensure that inventory sell through, in particular during periods of lockdown. This has not been repeated in FY22, as the impact of COVID was much less severe and consumers were gradually able to return to some sort of normality, including going back to work, going out or taking holidays. On the right-hand side is our overheads as a percent of net revenue, which reduced from 71% in FY21 to 56% in FY22. We've increased our spending to drive the business forward while maintaining the same strong cost control measures to ensure return on investment is maximized, while also driving ongoing improvement in processes across everything that we do. Next slide, please. In terms of the overhead breakdown, this chart provides more detail in terms of where our spend has gone. On the left is a breakdown of absolute spend, broken down into the four main categories. Overall, our overhead spend increased by 92% compared with the prior year. We've invested in all parts of the business throughout FY22, which has enabled us to deliver the 142% growth in revenue. On the left, in pale gold, is the commission which is retained by our third-party partners. We report this in overheads, which ensures that the revenue and gross profit figures remain unaffected by whether we make a sale on Sosandar.com or through one of our partner websites. On the right-hand side is our overhead spend as a percent of net revenue. All types of spend fell in the year, resulting in our loss being so substantially reduced. Of particular note is that our fulfillment and logistics cost has fallen as a percent of revenue for the second year running. This is inclusive of us supporting our warehouse provider, Clipper, with colleague wage increases, which has been more than offset by productivity initiatives, which has brought down the cost per unit overall. There remains more opportunities to come to further improve our overhead percentage. Next slide, please. I'll now come on to look at some of the core KPIs for our own website, Sosandar.com only. These exclude our third-party partnership results. On the left, the number of visits to our website increased in FY22 by 47% to just over GBP 13 million. This included six of the 12 calendar months being new records, reflecting the ongoing awareness of our brand and the response to our marketing communication strategy. We are delighted with the continued improvement in conversion on the right-hand side during the year, which averaged 3.9%, which is a 25% increase compared with the previous year. In addition to our marketing, this step up is a reflection of the amount of product choice that we have available for our customers. Next slide, please. This increase in conversion resulted in 508,000 orders being generated in FY22, which is an 84% more than the prior year. We had several records with both October and November having more than 50,000 orders for the first time in a calendar month. Our AOV on the right stepped up again to GBP 90 in the year. This is a 9% increase, reflecting a greater proportion of full price sales given FY21 was impacted by actions that we had to take as a consequence of COVID in order to ensure strong seasonal stock sell through. For reference, the AOV in FY20 reflected a product mix very different to where we are today, and it was heavily dominated by higher price point categories such as dresses. Next slide, please. In terms of new orders, these are orders generated from new customers, and they increased by 64% in FY22 to 141,000, represented by the bars on this chart. Importantly, the critical KPI of CPA or cost of acquisition reduced again in FY22, having fallen substantially from pre-pandemic levels, which is the gray line on the chart. We're incredibly pleased to have further improved the ROI from our customer acquisition activity with a CPA under GBP 19, which is 65% lower than in FY20. The reduction in FY21 was in part due to cutting back on marketing, particularly in H1 due to COVID. However, to further reduce our CPA ever since that point means that each customer is profitable to us very early in order number two. Next slide, please. In terms of repeat customer orders, on top of strong customer acquisition KPIs, we've also continued to grow our repeat customer orders. In FY22, we generate 367 repeat customer orders, which is 94% up on the prior year. To summarize, we've continued to deliver increasing levels of customer engagement on Sosandar.com with all KPIs increasing year on year. Next slide, please. Moving on to third parties. We've been delighted with how well Sosandar product has resonated with our third parties as well as their customers. This graph shows the growth in revenue that we've achieved over the last two years. We grew significantly through the first half of FY22 from a low base, and this was further accelerated in H2 as we were able to invest in even more stock following the equity raise that we did in May 2021. We continued to allocate more styles to each partner throughout the year and have increased the average number of units per style as well. We've increased the proportion of overall range that is allocated from around 10% in FY21 to on average 15% in FY22. This is even more now with Next following the launch of Platform Plus in Q1 of the new financial year. The concession model is profitable from day one, and so this significant step forward in revenue has helped us to drive us towards profitability while also giving us even more opportunities which having greater scale brings. With the addition of our first wholesale arrangement with The Very Group in March of 2022, we still have so much more opportunity for further growth, further growth across this sales channel. Next slide, please. For completeness, here is a summary, or here's our full income statement for FY22. In addition to what I've already shared, I want to just draw attention to a couple of additional highlights. Firstly, within amortization, there is a GBP 200 thousand charge relating to accelerated amortization of our website intangible, and that's resulted in our carrying value on the balance sheet now being zero, in effect a one-off in the year. Second, and for the first time, we have been able to recognize the deferred tax asset, which is GBP 400 thousand in the year. Previously, this was all unrecognized. However, given our trajectory now towards full year profitability, it's now been possible to recognize a portion of this tax asset within FY22. For information, the unrecognized element of our deferred tax asset now stands at GBP 4.7 million. Next slide, please. Moving on to our balance sheet. I'm really pleased to share our growing balance sheet strength with net assets now of GBP 10.6 million, which is roughly double the level in the prior year. This strengthening includes GBP 7 million of cash, which is after investing GBP 2.2 million in working capital during the year. This followed the equity raise in May 2021, which allowed us to accelerate our growth through additional investment in stock with both breadth and depth in the range increasing. We executed our plan as envisaged with stock increasing in the year by GBP 4.4 million to GBP 7.3 million, which includes further investment for the spring/summer season. It is this additional stock that has allowed us to meet the clear and growing demand from customers across all sales channels, including from our third party partners, where the Sosandar product range has resonated so well with their customers. Debt has increased by GBP 1.7 million- GBP 2.5 Million, and credit has increased by GBP 3.9 million- GBP 6.8 million, where creditor days have continued to move favorably, which reflects the trust that our suppliers have in Sosandar and how much they value our relationship. In February, we renewed our existing office lease, and from April 2022, we were delighted to take on even more space. This has doubled our overall office capacity, which has provided a fabulous working environment for our team, allowing us to further attract and retain great people to drive our business in the future. Finally, our cash balance as at June 2022 is GBP 6.1 million, which reflects the timing as well as further investment in inventory, which is driving another step up in revenue as we go through the first half of FY 2023. Next slide, please. We're now gonna look ahead at our strategy for the next stage of growth for the business, and also at the market backdrop. We've just gone through over two years of extremely challenging trading conditions, where consumers have had little actual need for clothing and, have spent vast amounts of time at home, and we still thrived as a business against this difficult backdrop. We're under no illusion that we now have another set of very challenging circumstances with a difficult economic climate, rising cost of living, and how that impacts discretionary spend and also creates low consumer confidence. It's no surprise that fashion retailing is one of the more resilient retail sectors at the moment, and this has been driven particularly by the mid-market, which is exactly where we sit, because in difficult economic times, women do still buy clothes. We also know that our customers are more affluent, as we showed at the beginning, and therefore more cushioned from economic pressures. However, trading is and will continue to be challenging against this tough economic backdrop. Although women still buy clothes in hard times, the impact is they tend to buy less clothes. What we can do is drive even harder to keep gaining market share. We intend to do this by broadening the product range even further. In the pandemic, the product ranges were narrower in terms of what the customer wanted to buy, as she just largely wanted casual clothes. Now she has broader lifestyle needs again and wants clothes across all areas from work wear to occasion to casual. However, we're fast-tracking those categories where we know she's most likely to spend. This is occasion wear, beach and swim, and tailoring. Basically, what we're seeing is after a couple of years wearing casual clothes no one saw her in, she's actually spending her money now in the places she will be seen, so going out, going to work, and going on holiday. On top of this, we are also looking at wider pricing structures. We know our customer really well, and as we did in the pandemic, our messaging and our communication with customers will reflect how our customers are thinking and feeling. What customers really want at the moment is stand out quality clothing and value for money, and that is what we're really good at. We are so focused as a business on loyalty, seen in our ever-increasing repeat rates, and we intend to take more share of spend, something we're confident we can do. Now we're going to look at our strategy going forward, which falls into four pillars, product, marketing, sales channels, and supply chain. To look at product first, it is our strategy to continue expanding the number of styles in all categories while always maintaining our strategy of on-trend, quality, long-lasting, lifestyle appropriate clothes. As you can see from the pie chart, we already have a really equitable mix across all product categories, and we are in all main womenswear categories, and all those categories are in growth. However, there is still lots of room for expansion in all the categories. We are also fast-tracking some new categories that we spoke about earlier that we've seen explode post-pandemic, occasion wear, beach and swim, and blazers, and suits. We are also developing new shapes and lengths, so we already do all trousers and jumpsuits in three lengths, and we're expanding different lengths into our dresses too. We're also increasing garments using sustainable fabrics and maintaining our affordable mid-price point. We'll also make sure we have daily newness while maximizing our best sellers. Our strategy of planning, buying, and merchandising stock has really been critical to our success. We constantly hone and develop this to mean that we turn stock very fast, we maximize best sellers, and we create constant newness while minimizing risk. The graph on the left shows the number of styles. 60% of styles will be completely brand new to the customer in a year, and 40% of styles are best sellers. The range constantly feels new and exciting to the customer, inspiring them to spend when brand new, with brand new things that they've never seen before and also on best sellers that come back into stock. The graph on the right shows the total stock units. Because we buy much more deeply on proven styles, when it comes to overall stock count, 65% of our cash is invested in stock that goes into proven best sellers, with only 35% of our cash invested into brand new styles. It means we can offer a constantly refresh clothing range to the customer while minimizing our risk on stock. It's not just stock buying that's unique, it's also our customer acquisition strategy. Our plan for acquisition is to invest in three big areas, and we invest in them pretty much equally. That's TV, glossy brochures, and social media. Then a fourth area with small amounts of money goes into digital marketing, which is things like Google Shopping and search. Because of our backgrounds in media, we've been able to develop a strategy that makes all forms of media work from print to digital to TV, and it stood us in really good stead not to be overly reliant upon one channel. It's also very easy to dial up and dial down and adapt each to when we get the best ROI in each area. Again, we've taken the industry norms and turned them on its head. To quote our agency, "No one, but no one buys TV like we do." We buy TV like a digital campaign. We track sign-ups by hour in order to optimize channels, programs, and specific times of day. Then we combine this with a brand new TV creative shot every month. We shoot it cost-effectively on location at the same time that we shoot all our stills, meaning that we get an unheard of response rate to TV. Our brochures are also brand new every time. We put them together like we would a magazine with fresh imagery, new product, and they're turned round in a matter of days, so we can exactly tap into what customers are thinking and feeling at any moment. Our strategy is to acquire high quality customers who will go on to repeat, as we saw at the beginning, how effectively we're doing this, which leads on to our retention strategy. The same channels that work for acquisition also drive retention. TV, social, and brochures drive deep ongoing engagement with our customers. Our number one retention channel, which utilizes our backgrounds in media to best effect, is email marketing. It works for us in a way that we've never seen for other brands. We have industry-leading open rates, and we drive over 50% of our revenue with negligible cost. It means that we constantly have our finger on the pulse as emails can be adapted by the minute to tap into what customers are thinking and feeling. The final bit of our strategy is zero cost brand endorsement through TV, celebrities, and third parties. We've always had brilliant celeb endorsement for Sosandar from high-profile actors, presenters, dancers and singers. Unlike a lot of brands, we don't pay celebrities to wear our clothes. The celebrities wear them as they like them. The great thing about our strategy is that when a celebrity wears our clothes, it's like the icing on the cake, but we're not reliant on celebrities or influencers and their popularity to sell our clothes. The product sells as we're producing product women in our market want and need, and until Sosandar were not able to find. We have found once a celebrity wears us, just like our customers, they repeatedly wear us. On average, Sosandar clothes will appear daily on a celeb, on a TV appearance like Lorraine fashion slot or This Morning, or on an influencer. Also selling through our third-party partners is great for brand endorsement too, as we are exposed to their large database of customers, and we also receive promotions from them that are free, such as Marks & Spencer's doing an above the line brands campaign this autumn, which we don't have to pay for. Next, looking at our sales strategy. Our own site growth is the anchor to our success. We work with strategically chosen third parties where we can grow rapidly. So far, Next, Marks & Spencer, John Lewis, and The Very Group. Our strategy is to scale our own site and existing channels and then start to expand overseas, either through third parties or our own site, and this is what we are currently assessing, modeling, and comparing the opportunities for. In terms of our supply chain strategy, it is all about doing more of what we are already doing and ensuring that all elements can scale up in line with our growth plans. It's imperative to have daily newness of product for our customer to shop, and therefore, our supply chain has been structured to manage this really effectively. From a supplier perspective, we have always mitigated risk by spreading our suppliers across multiple countries. The focus remains on further expanding and diversifying our supplier network, balancing the objectives of scale, margin, ethical compliance, and sustainability. In terms of shipping, historically, we have used predominantly air freight to move goods to the UK. Over the last 12 months, this has changed, with H2 FY 2022, in particular, using much more road freight. The proportion of air freight has reduced even more in FY23, within a more equitable mix of air, sea, and road being used, and this will continue to be managed in a way to retain speed to market, balancing our economic and environmental aims. Since the beginning, we have partnered with Clipper Logistics, who manage the warehouse on our behalf. They are efficient and work with great speed, but importantly, they can scale their operation to support our growth objectives. Julie, you're muted. Oh, sorry. Hang on. Great. We can hear you now. Can you hear me now? Yes. Thank you. Sorry, my internet just went. To come on to the future, we've got an exciting future ahead, and the new financial year has started very strongly. The rise of an ageless society means the opportunity for Sosandar is ever-growing, and we can dress our ever-growing customer base for their entire lives. We are very clear about the challenges that a struggling economy will bring, but we have confidence in our ability to navigate tough times ahead as we have done through the pandemic. We've navigated a hugely challenging time when women had little need for clothing, in addition to steering our way through global supply chain challenges and rising costs. We've delivered record revenue and moved the business into profit, now with nine consecutive profitable months. Our achievements have been down to our strategy, planning, and our ability to execute, and it's the way that we run our business that will enable us to steer through the next set of challenges. We've got a very clear strategy in place and the ability to execute our plan, giving us confidence that we will achieve what we set out for the coming year and beyond. That's the end of the presentation, and we'd love to hand over to you now for questions. Thank you, Julie. The first question is, do you have a sense of the age of your inventory? What percentage is more than, say, 90 days? Steve, do you want to take that question? Yeah. There'll always be a proportion over 90 days, but the key thing really is about the rate of sale from our point of view. We categorize stock in multiple ways, whether it by season, by category, so on and so forth. 90 days isn't necessarily for us, a milestone. The key thing is to enter a new season, so say spring, really well with good stock and then transition out of spring/summer into autumn with relatively clean stock. Even if we had stock that was brought in a year previous to that season, it will always sell in the following. But we have a really clean stock hold overall, and a very, very fast selling throughput. One of the charts that Julie shared was about how we purchase stock. The new lines that we bring in are relatively low in quantity, and monitoring the sell-through of those items is really fundamental to whether we repeat buy that item. If it proves its worth on a minimum buy, we'll get more volume behind it in the second buy, which in turn drives bestseller, and that drives the newness for the customer. We've got a relatively clean stock hold. Really pleased, actually. In the position we're in right now, and exiting Q1, is with absolutely the right amount of stock for the rest of the summer, and then we've got a good pipeline of stock starting to go on some boats ready for the autumn season. Really pleased overall with our stock hold. Tremendous. Thank you very much indeed. Sorry, I didn't say to ask your question, click on the Q&A button, but many people have already found that. We've got lots of questions, and do not use the chat button. Next question. Many thanks for your time today and congratulations on your numbers. Given so many brands, for example, Lipsy, are listing on Next, M&S, et cetera, to what extent in time will these platforms charge you to be on their, say, top list like Amazon do with adverts and sponsored listings, et cetera? Might this in time affect margins? Second question, one from the same person. How much do you estimate you'd have to spend on marketing to stand still and not grow at all? Email is obviously mostly free, is free, but you'd still need to spend on photo shoots. Do you count the cost of the photo shoots as marketing in your numbers? Right. Quite a few questions in there. Let me start with the question around paying for marketing on third parties. Perhaps we move on to you, Steve, to talk about actual expenditure on our marketing on our own site. Third parties. The simple answer is they already do charge. If you want to pay for marketing on Next or John Lewis or indeed Marks & Spencer, you can pay for marketing on their sites. The answer to that question is we don't pay for marketing because we've not found the need. We don't find the need to pay for marketing. That's really the beauty of our relationships with them is organically our product is selling. What those third parties care about is selling product. They don't make their money from marketing. They, that's an additional revenue stream. They just want the best product to sell. If organically your product sells, which is exactly what ours is doing, that's really why it's working so well for us. We do get some free marketing as well with because our product is so strong. I think Ali mentioned in her section on the presentation, it's one of the benefits of working with the third parties. We quite often get free marketing because our brand is doing so well on their site. They want to promote us because in turn, that drives revenue for them in their brand. Hopefully, that answers that question. Steve, do you want to answer about does photo shoot fall into marketing? On the presentation slide, there is the overhead breakdown by the four distinct types of spend. We include the cost of our photo shoots and the creative for our TV ads within the marketing line in there. In terms of how much would we need to spend to stand still, we don't necessarily model that as such. I think the key thing, of course, is about retention of customers, but also of acquisition, because it's really important to keep adding to our database, and that's what we've been doing over the last 12 months. As Julie said, we're now at a quarter of a million active customers, which is a fraction, of course, of the overall opportunity. The key point really is about cost effective acquisition. With the cost of acquisition now at under GBP 19, which has now been maintained and lowered over the last 12, 18 months, we're in great shape to continue to grow the active customer number. There are months where we don't spend very much at all, and those are the months where they're typically lower return on investment months, and therefore, we channel our marketing activities into the periods where you're gonna get more reward for the investment. We do get three or four months in the year where we do minimal marketing in terms of acquisition marketing to focus the effort where we're gonna get biggest bang for our buck. Hopefully that answers the questions that were asked. Thank you very much. Couple of questions on returns. Are you impacted by growing returns? If so, what are your plans to mitigate this? Do you have any plans to charge for returns? Steve, do you want to take that as well? From our point of view, we have, again, we've seen a curve, of course, with returns. If we go back to pre-pandemic, for us, we had a return rate, let's call it normal, that was predicated on the mix of product that we were selling at that time. That was predominantly dresses and formal wear, which typically is a category that has slightly higher rates of return because it's harder to fit onto the body. Through the pandemic, we had a much lower rate of return as the industry did, partly because people didn't want to return stuff and go out, but predominantly because the product categories that we're selling at that time were much more casual, much easier to fit. Those rates of return were never going to carry on as we came out the other end of COVID. What we did, we always planned for rates of return to grow in our modeling, and that's exactly what's happened. What we've seen post-pandemic, if you will, is a much more normalized product mix, more formal wear, much higher return rate as a consequence, but it's just reflective of the mix of product that we're now selling. We've not seen any material change since pre-pandemic on a category by category level. Therefore, at the moment, we've not been looking at whether we do or don't change the way we kind of run the business from an economics perspective. That would include charging customers for returns. We're not seeing any material change in consumer behavior when they buy from Sosandar, and therefore, at this moment in time, we're not looking at charging the customer. Of course, we're very aware what other brands are doing in the e-commerce space, and we watch that, and we'll take learnings, but at this moment in time, we don't need to, and we're not changing the model that stood us in good stead up until now. Thank you very much. Given the success of third party sites like Very and Next, are there other sites that would be appropriate for Sosandar to be listed on? Are these a good way to start international sales? Ali, do you want to take that? I think there is room for possibly one more site in the UK. We are at the moment looking at how we enter the market internationally, because we know that the opportunity that we've seen in the UK for Sosandar is definitely an opportunity overseas. Obviously, our opportunity in the UK is still massive because there's 20 million women in the UK over thirty-five. Our active database is quarter of a million, so we still have a huge opportunity just in the UK. We know that this also transfers overseas. In terms of overseas, how we'll do that, will it be through third party sites? Will it be through our own site? That's what we're assessing and modeling at the moment. It may well be that it's a combination of the two, but that's something that we're definitely looking at and will inform you about in time. Thank you very much. This questioner says, really impressive performance, congratulations. Your larger online rivals like ASOS and Boohoo are facing strong headwinds with logistics problems, inflation, Brexit, rising returns and falling EBITDA margins. You've explained why you've bucked the trend, but is there concern that as you scale, you'll start to see gross margin erosion and big CapEx requirements? Steve, would you like to take that? Probably not. I think what we're conscious of is growing the business in a way that's diverse and mitigates risk from day one. One of the core DNA elements of the business is it strikes a balance between high entrepreneurial spirit and agility. We plan, and we make sure that we make decisions that don't put the business at risk. For example, we've already got a really diverse set of suppliers across multiple countries, which in turn reduces the risk profile of the business. As we scale, that DNA doesn't change. We put ourselves in as good a position as possible to not be impacted by headwinds in the future. Of course, we're not immune to all headwinds. They affect all of us equally. I think from our perspective, we've worked really hard to put structure in place that tries to protect us as best as possible. From an economics perspective or a gross margin perspective, I guess we've got great opportunity. Already, we're increasing proportional volume that comes to the UK using lower priced shipping methods, and that will only continue. That has quite a significant impact on our margin already. Importantly, we see material benefit already, and that will only carry on as we continue to order larger volumes of product coming from our suppliers. We're still. We recognize there's still massive opportunity, and our growth profile will be significant. That it brings opportunity. It also brings challenge, but it brings real opportunity to mitigate headwinds, but also to drive future growth in gross margin. From a warehouse logistics, more generally perspective, one of the reasons Sosandar chose to work with a third party, and specifically Clipper Logistics, is because they can scale our operation to a level much, much larger than we are today. We have regular meetings with them in terms of not just the near-term objectives, but also the longer term objectives, to make sure that we have the structure in place that will grow with us, whether that be footprint, process, automation, investment. All of those things are on our roadmap, not necessarily today, but we do dedicate a lot of time to make sure that the pathway is clear so that we can achieve the growth ambitions that we have for the business. Tremendous. Thank you very much. How does your cost of customer acquisition compare with your competition? Where do you think this cost will eventually settle and keep you efficiently gaining market share? I'll answer part of that. To my knowledge, other companies don't release their cost of acquisition, unless, Steve. I don't think, to my knowledge, I don't think anybody does, do they? Not to my knowledge, no. No. It's impossible to compare. I think what really matters is that the cost of acquisition that we have works for us and works for our model. The cost of acquisition that we're sitting at now, which is just under GBP 20, is a sustainable and long-term way of running our business. 'Cause it's quality customers that matter. It's not about acquiring cheap customers that then don't necessarily go on to repeat. For us, it's about acquiring the right customers that become regular purchasers, as you've seen in the growth that we've seen in the frequency of purchase. I think if our cost of acquisition were to remain at the level it is now, which is around that GBP 20 mark, that's perfectly acceptable, and we can run long-term business at that kind of level. Is there a possibility to reduce that further? Yes, probably. The business is modeled really on staying at that kind of level of cost of acquisition. Therefore, if we were able to reduce that further because we're constantly trying to reduce that further, constantly trying to hone and refine exactly what we're doing, then obviously that would be, you know, very beneficial and upside for us in the future. Thank you very much. We've got a couple of questions on international. At what point will you start to address the international opportunity? What lessons do you draw from the experiences of other large online clothing brands that have attempted to grow internationally? Which country or countries do you have in mind? Ali, do you want to start on that? Start with that. Yeah. As I kind of mentioned in the last question, we're at the moment where I think last time we spoke to you, we were in research stage. We've moved slightly on from that, and now we're looking at assessing and modeling the opportunities for going international. In terms of which country, that's not something we've decided yet because we're assessing all countries, all areas. I think we take a lot of the lessons that we've learned from what we've done in terms of the UK and apply that to going internationally. I think the point is to take each one slowly and not rush into going into lots of different countries, but actually take it slowly, launch into one country, see how that goes and what lessons we learn from that before we spread ourselves too thin, which is what we did in the UK. At the moment, that's our strategy. There's still a lot of work to be done in terms of modeling and assessing, and we will keep you informed on that as we go along. I would add to that, Ali, that, probably worth noting, within the senior team at Sosandar, we have several members of the senior team that have worked in other businesses that have launched and grown businesses overseas. Not just the learnings from the sector, but also more hands-on experience, but also knowledge about what it takes to grow a business overseas, some of the challenges and some of the learnings, I suppose, that are very much closer to hand to people so that they brought those to Sosandar. When we do execute, we're doing it from a point of knowledge and strength, rather than guesswork. I think as with everything that we do, we plan, and we'll make sure that we're robust when we execute the go live. Thank you very much. What are your plans for sass and branded accessories? We already do quite a lot of accessories anyway. We do scarves, jewelry, belts, all things that go with clothing. Obviously, we do a very extensive range of footwear. I would say we're already very much in the accessories market. Plans to expand beyond that? I think we're expanding in all our categories. Every single category that we're in is growing and has an opportunity for expansion, and some of them are well into their infancy. Yeah, accessories, along with all the other categories, there is a plan to expand. Thank you. This is the final question at the moment. If anyone does have a burning question, get typing now. When did John Lewis and Next, et cetera, start saying to you, "No more third-party relationships, please"? Do you think that will happen? I think because it's a concession arrangement, and we're in control of how much stock we push into them, what they care about is that that product is selling on their site. It doesn't matter to them really if the product is sold elsewhere. They've never, at any point, raised any concerns about the fact that we work with the three biggest womenswear retailers in the U.K. already. Obviously, we launched on Very. I just think it's perfectly normal business behavior to sell on a number of sites. I don't envisage that they would ever really raise that as a question. Thank you. You've covered the recession a lot, or impending recession a lot, but someone is asking quite emphatically, can you talk a bit about how a U.K. recession might impact Sosandar and what you might do to mitigate that impact? I know you've covered this a lot. Yeah. Okay. We'll just talk about that maybe again. I think I would say that our forecasts that are in the market from Singers are realistic. They're realistic based on challenging times ahead. Those forecasts have been put together with that really in mind, I think. I think we are under no illusion about what recession means. We've all three of us have managed businesses through very difficult recessionary times in the past. We know that businesses can really thrive in recession. Some businesses don't, but some businesses do. We think that our strategy around product, customer retention, and engagement with our customers will be the right strategy to keep gaining share. I suppose if we were to sum it up, is even if customers shop less, which they will, because overall, women will buy less clothes in a recession. They still buy clothes. They just overall, the pie is likely to be smaller. But that doesn't stop you gaining share from that pie. We can still do all those things. Our strategy is really around our product being differentiated, the absolute best product that you cannot buy anywhere else apart from Sosandar branded product. Also understanding and engaging with our customers and understanding how they're thinking and feeling. I think we would sum it up to say it's no different than being in the pandemic. It's just the set of challenges were different in the pandemic. In the pandemic, people had lots of money, but they had absolutely no need for any clothes whatsoever because they were just sitting at home. We still managed to turn that to our advantage. It was very tough trading and selling clothes during COVID. We managed to thrive. We kind of switch it on its head now. What we've got now going forward is people with less money, but much more of a need to buy clothes, and as Ali said, to buy clothes that they're going out into the world and people are seeing them in clothes. The challenge is very obvious to us, and I think we're very clear of how we tackle that challenge. I don't know if you'd add anything, Ali. No, I totally agree with everything you said. I mean, at the end of the day, as we said a lot through the presentation, the product is king. It's what all our success is based on. I think we just continue to drive that forward and keep that unique differentiation of our product going forward for the customer and will help us thrive through this challenge as well. Many thanks indeed. I'm afraid that's all the questions we've got time for. Julie, do you have any closing remarks? Just to say thank you very much everyone for your time today and coming to listen to the presentation, and we look forward to seeing you again next time. Many thanks, Julie, Ali, and Steve. To everyone listening, you'll now be taken