ASX retail stock Cettire Ltd (ASX: CTT) is trading at 37 cents, up 7.25%, amid no news from the online luxury goods retailer today.
It's been an astounding fall from grace for this ASX retail stock after being the fastest riser of the S&P/ASX All Ordinaries Index (ASX: XAO) in FY23.
The Cettire share price has fallen from a record high of $4.90 on 1 March 2024 to a record low of 25 cents on 13 June this year.
How did that happen?
What on Earth happened to this ASX retail stock?
A string of events heralded the start of a volatile period and overall decline of 92.4% for Cettire shares from the March high last year.
It appeared to begin with investors' dismay over Cettire founder and CEO Dean Mintz selling $127 million worth of shares that month.
Then, controversy sparked by a media report on Cettire's practices relating to duties and taxes led to changes in Australia and the US.
The following month, major investor LHC Capital told its clients it had sold its $362 million worth of Cettire shares due to a "red flag".
In June 2024, Cettire released an update noting that "the operating environment within global online luxury has become more challenging".
Investors panicked, with Cettire shares crashing 49% on the day to $1.135.
Cettire released its unaudited FY24 results on 29 August, reporting a 34% dive in net profit after tax to $10.5 million.
The ASX retail stock crashed 20% on the day to close at $1.06 apiece.
On 2 and 3 September, Mintz took advantage of the weaker Cettire share price, snapping up $15.8 million worth of stock.
He bought the Cettire shares in two tranches for an average $1.2667 and $1.5235 per share.
A brief rally for Cettire shares was short-lived
Cettire shares had a brief rally from late August to 17 October, when they closed at $2.54 apiece.
Then the ASX retail stock reversed course.
A 1Q FY25 update on 29 October sent Cettire shares crashing 17% on the day.
The company revealed a 77% fall in adjusted EBITDA from $8.7 million in 1Q FY24 to $2 million in 1Q FY25 due to softer global demand.
The half-year report in February revealed adjusted EBITDA of $12.1 million, down 54% compared to $26.1 million in 1H FY24.
US tariffs
The new year also brought a new risk to the Cettire business — US tariffs.
US President Donald Trump announced the reciprocal tariffs on 2 April. They included a 20% tariff on goods from European Union nations.
The following day, the ASX retail stock plunged 20% to a 3-year intraday low of 64 cents after the company released a statement advising investors that approximately 41% of its total gross sales in 1H FY25 were European Union-manufactured goods sold to US customers.
Cettire said:
Cettire is currently assessing the full implications of these tariff changes on the Company and its global operations, noting that several major luxury brands have indicated they would seek to increase pricing of luxury goods in the US market to mitigate possible tariff changes.
Cettire's 3Q FY25 update on 23 April revealed an adjusted EBITDA loss of $4.7 million, including a $2.1 million foreign exchange loss.
This sent the ASX retail stock down 24% on the day to 50 cents.
An FY25 trading update earlier this month revealed an adjusted EBITDA of just $500,000 for the 11 months to 31 May.
Cettire noted continued challenges in the global luxury market that had been "amplified by US tariff policy changes".
Once again, Cettire shares slipped substantially, down 32% for the day.
The next day, 13 June, the ASX retail stock hit a historical intraday low of 25 cents.
Cut and run on this ASX retail stock, says expert
Against this backdrop, Jonathan Tacadena of MPC Markets currently has a sell rating on this ASX retail stock.
Commenting on The Bull, Tacadena says:
In our view, the outlook is challenging.
Approaching the end of the financial year, investors may want to consider realising any losses in CTT to offset other capital gains.
