As sales grew, so did its pile of cash in the bank. This sales model also means it holds no inventory, and only needs to ensure the logistics of moving the goods from supplier to customer, taking care of any taxes and duties and customer support.

But the stock’s 90 per cent plunge since last October, from a high of $2.75 to a low of 25¢ last week, indicates just how much Cettire investors – and management – were blindsided by the impact of the EU tariff threats on its business.

In early April, Cettire’s ASX announcement expressed caution over the tariff threat given that 41 per cent of its business relied on selling EU-based luxury goods to the US.

Cettire noted at the time that its average order value remained under the $US800 ($1234) de minimis exemption, which means it can ship goods to the US exempt from these duties anyway.

The potential threat is that Trump has already introduced a tariff on these low-value parcels, which come under the de minimis threshhold, from China. If he replicates this for low-value parcels from the EU, it would provide further disaster for Cettire.

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But this is not a problem for now.

So no one was prepared for the bombshell update just three weeks later which sent the share price plummeting.

Cettire said it made an operating loss for the March quarter as the “primary impact” of US tariff developments softening underlying demand across all geographies. Worryingly, it said this included items not subject to duties.

Cettire said its focus remained on delivering profitability for the June quarter.

But things got worse. Weeks before the end of June, the company was forced to issue another profit downgrade due to a further softening of demand in its established markets such as the US.

Topping it all off was its cash levels plunging more than $30 million in three months to just $45 million by the date of the June 13 announcement.

RBC Capital cited this deteriorating balance sheet as a key concern given the accelerating losses.

RBC analysts noted that Cettire had $101 million in cash on its balance sheet at the end of December. They estimate that $85 million of this was working capital, i.e. temporary cash that would have to be paid back to the retailer’s luxury suppliers to cover outstanding debts.

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According to RBC, Cettire may have had as little as $16 million at the end of 2024, which may now have been eaten away by operating losses and capital expenditure.

“This suggests to us there may already be limited/no surplus cash on hand beyond what is required to meet Cettire’s obligations to suppliers,” RBC said.

RBC and Bell Potter flagged the risk of a capital raise – with shares trading at record lows – as a real risk.

Cettire’s deteriorating financial health feeds into the debate over whether the controversial retailer’s changing fortunes stemmed from cyclical trends impacting the industry or deeper structural issues. This includes the luxury brands tightening control of their retail sales channel and squeezing out players such as Cettire.

It’s not the only controversy that has dogged the group. Cettire has faced allegations that it may not have been paying the proper duties on goods it ships, and also collected duties it did not pass on to the relevant authorities.

Cettire has denied this.

E&P retail analyst Julian Mulcahy is not so glum about its funding despite forecasting that cash will decline again in June as sales are seasonally lower.

“While cash ex-working capital is currently negative, we believe the company has enough funding to ride out the cycle,” he says.

Cettire did not directly respond to a query regarding whether it might need extra funding, but referred to an earlier statement from Mintz.

“Cettire remains relentlessly focused on its strategy to grow profitably while self-funding. Due to the rapidly evolving market environment, the immediate focus remains on improving profitability,” he said.

Given recent events, investors are probably hoping to just make it to the August full-year results without another update from the group.

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