Citi warns Cettire would be hurt by trade war
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More news: Citi analysts have warned escalating US tariffs bode poorly for luxury ecommerce platform Cettire.
They maintained their sell rating on the company given the imposition of tariffs "raises the likelihood" of measures against European goods.
Cettire shares were down 18.79% to $1.18 in late afternoon trade.
What they said: "Majority of CTT suppliers are based in the EU and >50% of CTT revenue is US-originated. Near-term impacts are likely net negative depending on how fast luxury brands can re-route production away from tariff-impacted economies, causing dislocations in luxury discount channels," analysts wrote in a note.
They added that a pull forward in luxury demand was "unlikely" and that a broader trade war would "certainly be negative".
"The luxury downturn has been due to: 1) multi-year price inflation driving imbalance between cost and perceived value, and 2) simultaneous economic weakness across major economies. A prolonged and wide-reaching trade war certainly wouldn't help with either and magnifies downside risks for CTT," they said.
Cettire shares plummet on US tariffs
The news: Cettire's share price has fallen 10% on Monday morning as the implementation of US President Donald Trump's tariffs on China, Mexico and Canada send shockwaves through markets.
The numbers: The luxury ecommerce company issued a statement during the trading session, revealing it had been assessing the changes to US tariffs on its business.
Cettire said 7.5% of US gross sales in 2024 would have been impacted by the new tariffs. This represented approximately 4% of the company's total gross sales.
The context: Cettire came under pressure last year over its treatment of import duties and how it reimbursed customers where charges collected by the company were greater than charges paid to customs.
Trump's tariffs have closed the so-called 'de minimis' exemption for imports from China, Mexico and Canada which had previously meant that goods under USD800 ($1,306) were not subject to duties.
Most of Cettire's luxury products are European and could be impacted should there be a further escalation. On Friday, Trump said he would "absolutely" impose tariffs on the European Union.
The sources: ASX announcement, Politico, Citi research
