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CTT - CETTIRE LIMITED


nipper
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Cettire Limited (CTT) is a global online retailer, offering selection of in demand personal luxury goods via its website, cettire.com. Its catalogue of over 1,300 luxury brands and over 160,000 products of clothing, shoes, bags and accessories is underpinned by a large, diversified network of suppliers.

 

 

listed in Dec 2020 .... and has doubled in price since then. Market Cap now $450M.

 

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  • 2 months later...

still going. ... at $1.86

 

CEO Dean Mintz, who established the luxury goods retailer in 2017, owns 66 per cent of the company after selling 50 million shares into the float for $25 million. Regal Funds Management owns more than 23 million shares, making it the largest shareholder after Mr Mintz with 6.05 per cent, and Washington H Soul Pattinson has 5.5 million shares.

Cettire was formed out of Mr Mintz’s Ark Technologies, an incubator with a focus on developing technological innovation in social media, mobile, web applications and e-commerce.

 

According to the company’s prospectus,

Dean identified a market opportunity to build a global online proposition in the personal luxury goods market, a large market characterised by relatively low (but growing) digital adoption, high fragmentation and scope for attractive unit economics

 

Sales have risen from $545,000 in 2018 to $22.8 million in 2020. Sales soared 331 per cent to $18.5 million in the March quarter, prompting Cettire to upgrade prospectus forecasts. It now expects sales for the year ending June to reach at least $80 million, up from a previous forecast of $70 million.

 

It also expects to make a profit, subject to marketing spend, after losing $2 million before interest, tax, depreciation and amortisation in 2020.

 

 

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  • 4 weeks later...

there was an AFR article on the weekend..... CTT dropped 30% this morning and now in a trading halt

Mainly, CTT appears to have built an online customer database and uses organic search and Google ad words to rank highly when shoppers searched for luxury fashion.

 

.... But now questions are asked about the supply chain and use of third parties (with the implied question mark hanging over provenance/ authenticity).

 

Those who have 'lifted the bonnet' have found that Cettire has no direct relationship with brand owners. Rather, fund managers said it bought stock from third-party suppliers and wholesalers, some of whom operated in the grey market or parallel import market.

And when the 1300 designer brands such as Prada, Gucci, Saint Laurent, Balenciaga, Burberry and Valentino and Australian designer brands such as Zimmermann start to assert control of their brands, as the luxury end has been wont to do, then the forward PE of 500 or 800 or whatever tends to look a bit rich?

 

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  • 2 months later...

The Company delivered exceptional growth, significantly outperforming FY21 Prospectus forecasts and upgraded guidance.

FY21 highlights (vs FY20): • Reported gross revenue up 333% to $124.5 million; up 384% on a constant currency basis

• Reported sales revenue up 304% to $92.4 million; up 352% on a constant currency basis

• Active customers up 285% to 114,830

• 40% of gross revenue from repeat customers (FY20: 26%)

• Reported product margin of 37% and delivered margin of 24%

• Adjusted EBITDA of $2.1 million

• Statutory NPAT of $(0.3) million

• Operating cash flow up 131% to $12.7 million

• Strong balance sheet, with $47.1 million cash and zero debt

• Launch of proprietary ecommerce storefront

• Commencement of direct partnerships with brand owners

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  • 7 months later...

Cettire made it to $4.70 last Nov, but is now 73c.

Maybe ecommerce is not an easy space to operate in? I would imagine there would be a continual spend to maintain relevancy, and perhaps customers have little loyalty.

CTT keeps coming out with selectively attractive numbers in the Quarterlies, but the market does not seem convinced.

  • Cettire grew revenues by 178 per cent to $70 million in the March quarter compared to the same period a year ago.
  • The company has launched a mobile app to help funnel more customers to its website and take advantage of the fact its web traffic is 80 per cent linked to mobile devices.
  • The number of orders sold on the platform jumped 173 per cent to just shy of 100,000, compared to the 36,000 achieved in the March quarter last year.
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  • 2 weeks later...

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