ASX-Listed Cettire’s ecommerce drop-shipping model reports significant growth, with $416.2 million in sales revenue reported for FY23.
Cettire (ASX: CTT) stock rallied on Thursday, climbing 12% on close over the previous day, on the release of its FY23 adjusted EBITDA reporting of $ 29.3 million – a significant swing from its negative FY22 figure of -$ 21.5 million. Active customer numbers have also grown 63% to over 423K.
Cettire is a luxury fashion online retailer, founded in 2017 and becoming ASX-listed in late 2020. The company sells more than 500K products from over 2,500 brands, including Prada, Gucci, Saint Laurent, Balenciaga and Valentino.
The company has no inventory overheads, acting as a drop shipper. Cettire also uses proprietary technology, which it says enables “exceptional scalability for customer acquisition and automated order fulfilment”.
Founder and CEO Dean Mintz comments, “Cettire is a highly nimble business, with a largely flexible cost base. This enables us to adjust quickly to market conditions and optimise performance.”
The company’s FY23 numbers suggest a divergence in consumers’ premium fashion spending habits from the industry’s macro environment. For example, ABS data shows the overall clothing and footwear category growing only 0.6% in Q4 FY23 over Q3, with just a 0.3% increase over 12 months. However, Cettire reports almost doubling its sales revenue, from $209.9 million in FY22 to $416.2 million in FY23.
Customer lifetime value (CLV) also appears to be on the rise for Cettire, with 58% of gross revenue coming from repeat customers vs 50% in FY22. Reporting notes that return shoppers have shown “higher average spend per order and increased order frequency” over the FY23 period.
Localisation is “a key strategic priority to drive penetration” for the company’s emerging markets, which accounted for 27% of gross revenue in FY23. During this period, the company deployed multi-language features and intends to grow capabilities in 6 languages, including Chinese, Japanese and Spanish. Additionally, the site allows shoppers to view prices and checkout in local currencies.
Entry into the Chinese market in FY24 is a strategic focus for Cettire. Mr Mintz commented on the next financial year outlook, “We are pleased by the early trading in FY24, with all our key markets performing strongly. Cettire is well positioned for another strong year of growth and profitability. We are well advanced in our preparations for China market entry, which remains a very attractive market opportunity and offers significant incremental growth potential.”