Sometimes controversial online luxury retail provider Cettire (ASX:CTT) has confirmed it’s launched in China.
Earlier this year, the company was hit by reports in two national mastheads alleging it was dodging taxes when it shipped goods around the world. It wasn’t the first time the company had a fall from grace – the company’s shares were hit in 2022 in similar circumstances.
It doesn’t help that founder Dean Mintz likes to sell large packages of shares at inopportune times.
“As the world’s largest luxury market, China is an important strategic opportunity for Cettire,” Mintz said on Monday.
But in between the lines, Mintz hinted at a subdued start for the world’s largest luxury market.
“We intend to be measured in our approach to the market, with a broadening of our channel proposition over time as we seek to build presence.”
This is without doubt partially a response to China’s current woes – an economy struggling to exit deflation amidst mixed (and uncertain) conditions. A recent uptick in Chinese retail sales may offer some relief.
That relief would probably be well received – Mintz also spoke of broader ‘challenging market conditions’ in a broader context.
“Since our market update in mid-April, we have observed … a softening demand environment and an increase in promotional activity has been visible across our footprint,” Mintz said.
“Additionally, we believe the market is currently being impacted by clearance activity as certain players exit parts of the market.”
Whether the company’s China launch boosts sentiment for Cettire’s shares remains to be seen, but it could be well-received.
The company’s returns are down -22.7% YTD and -12% over the last year. But this isn’t the first time it’s fallen.
In late 2021, the Cettire share price fell from $4.00 to being worth 50 cents in June of 2022. By February this year, it had climbed back to $4.50.
Then a fresh wave of skepticism on Cettire’s business model hit the press in reports earlier this year, and that was that. Notably: the decline wasn’t as bad as it was in 2021. Prices remain above $2.00.
Update: in the first half hour of trades on Monday, Cettire shares fell -40% to $1.35 as the company’s trading update spelt panic in the eyes of shareholders.
CTT last traded at $1.35.