So, I did it. I bought more shares in Sosandar (AIM: SOS).

This company is still one of my biggest losing positions — though not quite as bad as my painful ride with Argo Blockchain (I’ll cover that story another time…). Despite the losses I decided to average down. Below is what I looked at before pressing buy again and why I think there’s a real shot at upside.

Why Sosandar?

Sosandar is a UK fashion retailer focused on midlife womenswear. It’s not trying to be another fast-fashion giant — and that’s part of its appeal. Here are the reasons I felt comfortable adding to my position:

  • Top-line & turnaround: Revenue fell ~20% in FY25 (from £46.3m to £37.1m) after a period of heavy discounting. Management deliberately dialled back promotions to protect margin.

  • Margins are improving: Gross margin rose from ~57.6% to 62.1% in FY25, and Q1 FY26 showed margins near 65% — a meaningful structural improvement.

  • Profit discipline: Adjusted profit before tax moved positive once one-offs are stripped out. Management is prioritising full-price sales and profitability over growth-at-all-costs.

  • Cash runway: Net cash sits around the £8m mark, which gives the company room to scale stores or weather short-term partner issues without immediate dilution risk.

  • Physical retail expansion: The company opened its first stores in 2025, targeting affluent market towns. Early indications are the stores are trading close to break-even.

  • Customer base: Sosandar’s customers return items far less than fast-fashion shoppers, which helps reduce return rates and protects margins.

Quick ASOS comparison: One big reason I’m not backing ASOS is returns and customer behavior. In my view ASOS is overvalued — realistically worth maybe 10% of its current market cap. Every time I go to the post office I see people returning ASOS parcels; that return culture creates margin pressure and logistical costs. Sosandar, by contrast, is deliberately trying to reduce promotions and returns and build a steadier, full-price business.

Research I Asked ChatGPT to Do

Before buying more I asked ChatGPT to run through the latest numbers, analyst targets and downside scenarios. The summary:

  • Share price at the time of research: ~5p.

  • Analyst consensus targets clustered around 11p, implying ~100% upside if forecasts hold.

  • Some algorithmic/AI models are far more bearish and predict steep downside.

  • Probability estimate from that research: roughly 55–60% chance of Sosandar executing successfully (sustaining margins, returning to growth and delivering consistent profits), ~25–30% chance of stagnation, and ~10–15% chance of a material failure.

Probability & My Thinking

Yes, I’m aware those numbers aren’t guarantees — they’re probability estimates based on public financials, recent trading updates and execution risks. But that ~60% chance of doubling (to ~10–11p within a year) lines up with the analyst targets and the margin improvements I’m seeing.

Why average down?

  • If margins and cash generation continue to improve, the market will likely re-rate the stock.

  • Small-cap stocks move fast. Averaging down reduces my average cost and increases upside if the turnaround sticks.

  • I’m comfortable accepting higher volatility for the potential of higher returns — this is a speculative slice of my portfolio, not my core holding.

Risks (Be Realistic)

  • Partner & channel risk: Dependence on wholesale partners and broader retail disruptions can cause revenue volatility.

  • Store rollout risk: Retail expansion is capital intensive and could hurt margins if stores underperform.

  • Macro & fashion risk: Consumer sentiment and fashion trends can shift quickly.

  • Thin coverage: Limited analyst coverage means surprises (good or bad) can cause sharp price moves.

Conclusion — What I Did

I bought more Sosandar shares. It’s one of my biggest losers, but I believe the price is reflecting too much pessimism and not enough of the margin and strategy gains we’re seeing. I view it as a calculated risk: a speculative position sized to my risk appetite with a potential payoff that, if execution continues, could be significant.

Not investment advice — just my personal journey.