Pressure mounts on Cettire as the market smells blood
One day after a staggering 50% fall in its share price, the luxury ecommerce platform is facing fresh questions about the high fees it pays to merchants.
Online fashion retailer Cettire's earnings downgrade on Monday was, in the words of one close market observer, "an unmitigated disaster”. Now following an extraordinary near 50% wipe-out for the stock in a single trading session investors are left wondering: is this worst of it for the fallen market darling ? Or is there more pain for shareholders to come?
Cettire, which sells discounted luxury fashion items from some of the world’s most valuable brands essentially warned yesterday that it business risks turning profitless later this year, blaming heavy discounting by the brands it stocks for the deterioration in its fortunes.
After generating $32.1 million in earnings before interest, tax, depreciation and amortisation in the first nine months of the financial year, Cettire told the market it would finish the year with EBITDA between $32 million and $35 million - well below market expectations.
“This update shows their unit economics are shot,” the market source, who was not authorised to speak to media and who holds no position in the company, told Capital Brief. “It raises the question, has all the profitability gone because of all of these external issues?”
