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Australia's luxury success story is running out of cash and Trump is to blame

Australia's luxury success story is running out of cash and Trump is to blame

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 minis 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 minis 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.
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Donald Trump news: US President speaks as he arrives in Scotland to open new golf course, discuss trade
Donald Trump news: US President speaks as he arrives in Scotland to open new golf course, discuss trade

West Australian

timean hour ago

  • West Australian

Donald Trump news: US President speaks as he arrives in Scotland to open new golf course, discuss trade

US President Donald Trump has arrived in Scotland as his family's business prepares for the upcoming opening of a new golf course in Aberdeenshire billed as 'the greatest 36 holes in golf'. Air Force One - the presidential plane - touched down at Prestwick Airport in Ayrshire on Friday just before 8.30pm (local time). Mr Trump was met by Scottish Secretary Ian Murray as he disembarked, before heading to the waiting presidential helicopter Marine One, bound for his nearby Turnberry golf course. His presence is expected to spark protests across the country, with Scottish Police being forced to request aid from other forces to help increase manpower for the trip. Mr Trump is set to spend time at his golf resort in Turnberry on Scotland's west coast, before heading to his sprawling golf property 320 kilometres away near Aberdeen in the east. But it won't be all play and no work. He will meet British Prime Minister Keir Starmer and European Commission President Ursula von der Leyen who both want to talk about trade. Mr Trump said Washington was also working hard on a possible trade deal with the EU, which he said was very keen to make a deal. EU diplomats say a deal could result in a broad 15 per cent tariff on EU goods, mirroring a framework agreement with Japan and half of the 30 per cent tariff Trump is threatening to impose by August 1. Speaking to reporters on the tarmac, Mr Trump said he'd be with his son and 'he's gonna cut a ribbon' for the second Trump golf course opening soon near Aberdeen. Eric Trump, who now helps run the Trump Organisation, previously joined his father for the groundbreaking in 2023. Although Eric did not travel with Donald on Air Force One, a Trump private plane was seen landing near Glasgow earlier in the day. Mr Trump also used the opportunity to send a blunt message to Europe, saying, 'This immigration is killing Europe. And the other thing, stop the windmills.' He added: 'Wind power generation is killing the beauty of your country.' His opposition to wind farms is longstanding, including previous legal efforts to protect views from his golf courses in Scotland. On immigration, Mr Trump warned, 'On immigration, you better get your act together. You're not going to have Europe anymore.' He contrasted this with his administration's tough US-Mexico border policies, suggesting Europe needs to act decisively on immigration controls. As part of the visit, he will open a second 18-hole course on the Aberdeen property named in honour of his mother, Mary Anne MacLeod, who was born and raised on a Scottish island before emigrating to America. The White House has described the trip as 'private'. Mr Trump's visit to Scotland is in the 'public interest', UK Chancellor Rachel Reeves insisted, pointing out a recent trade deal. 'That has a tangible benefit for people here in Scotland, whether it is people working in the Scotch whisky industry or people working in the defence sector, like here at Rolls-Royce, that trade deal means lower tariffs than any country in the world on things that we send to the US,' she said. While in the UK, he will also meet Scotland's First Minister John Swinney, who had publicly backed Democratic candidate Kamala Harris in the 2024 US presidential election. 'The Scottish leader is a good man, so I look forward to meeting him,' Mr Trump said. Swinney flagged in an interview with PA that he intended to raise 'the awfulness of the situation in Gaza and the unbearable human suffering' with Trump. 'I intend to take that opportunity to make sure that Scotland's voice is heard,' he said. The trip shows how the president has become increasingly comfortable intermingling his governing pursuits with promoting his family's business interests. Mr Trump has described Scotland as a 'very special place' and made a similar trip there in 2016 during his first run for the presidency, but he will not necessarily get a warm welcome. About 70 per cent of Scots have an unfavourable opinion of Trump, while 18 per cent have a favourable opinion, an Ipsos poll in March found. His visit requires a major police operation that will cost Scottish taxpayers millions of pounds as protests are planned over the weekend. The union representing officers is concerned that they are already overworked and will be diverted from their normal duties. The overseas travel comes as Trump faces the biggest domestic political crisis of his second term in office. Allies and opponents alike have criticised his administration's handling of investigative files related to disgraced financier and sex offender Jeffrey Epstein's criminal charges and the circumstances of his 2019 death in prison. The issue has caused a rare breach with some of Trump's most loyal Make America Great Again supporters, and majorities of Americans and Trump's Republicans say they believe the government is hiding details on the case, according to Reuters/Ipsos polling. White House officials, frustrated by the ongoing focus on the Epstein saga, are hoping the controversy dies down while Trump is abroad, one person familiar with the matter said. with PA and Reuters

‘Better get your act together': Trump arrives in Scotland
‘Better get your act together': Trump arrives in Scotland

Perth Now

timean hour ago

  • Perth Now

‘Better get your act together': Trump arrives in Scotland

US President Donald Trump has arrived in Scotland as his family's business prepares for the upcoming opening of a new golf course in Aberdeenshire billed as 'the greatest 36 holes in golf'. Air Force One - the presidential plane - touched down at Prestwick Airport in Ayrshire on Friday just before 8.30pm (local time). Mr Trump was met by Scottish Secretary Ian Murray as he disembarked, before heading to the waiting presidential helicopter Marine One, bound for his nearby Turnberry golf course. His presence is expected to spark protests across the country, with Scottish Police being forced to request aid from other forces to help increase manpower for the trip. Mr Trump is set to spend time at his golf resort in Turnberry on Scotland's west coast, before heading to his sprawling golf property 320 kilometres away near Aberdeen in the east. But it won't be all play and no work. He will meet British Prime Minister Keir Starmer and European Commission President Ursula von der Leyen who both want to talk about trade. Mr Trump said Washington was also working hard on a possible trade deal with the EU, which he said was very keen to make a deal. EU diplomats say a deal could result in a broad 15 per cent tariff on EU goods, mirroring a framework agreement with Japan and half of the 30 per cent tariff Trump is threatening to impose by August 1. Speaking to reporters on the tarmac, Mr Trump said he'd be with his son and 'he's gonna cut a ribbon' for the second Trump golf course opening soon near Aberdeen. Eric Trump, who now helps run the Trump Organisation, previously joined his father for the groundbreaking in 2023. Although Eric did not travel with Donald on Air Force One, a Trump private plane was seen landing near Glasgow earlier in the day. Mr Trump also used the opportunity to send a blunt message to Europe, saying, 'This immigration is killing Europe. And the other thing, stop the windmills.' He added: 'Wind power generation is killing the beauty of your country.' His opposition to wind farms is longstanding, including previous legal efforts to protect views from his golf courses in Scotland. On immigration, Mr Trump warned, 'On immigration, you better get your act together. You're not going to have Europe anymore.' He contrasted this with his administration's tough US-Mexico border policies, suggesting Europe needs to act decisively on immigration controls. As part of the visit, he will open a second 18-hole course on the Aberdeen property named in honour of his mother, Mary Anne MacLeod, who was born and raised on a Scottish island before emigrating to America. The White House has described the trip as 'private'. Mr Trump's visit to Scotland is in the 'public interest', UK Chancellor Rachel Reeves insisted, pointing out a recent trade deal. 'That has a tangible benefit for people here in Scotland, whether it is people working in the Scotch whisky industry or people working in the defence sector, like here at Rolls-Royce, that trade deal means lower tariffs than any country in the world on things that we send to the US,' she said. While in the UK, he will also meet Scotland's First Minister John Swinney, who had publicly backed Democratic candidate Kamala Harris in the 2024 US presidential election. 'The Scottish leader is a good man, so I look forward to meeting him,' Mr Trump said. Swinney flagged in an interview with PA that he intended to raise 'the awfulness of the situation in Gaza and the unbearable human suffering' with Trump. 'I intend to take that opportunity to make sure that Scotland's voice is heard,' he said. The trip shows how the president has become increasingly comfortable intermingling his governing pursuits with promoting his family's business interests. Mr Trump has described Scotland as a 'very special place' and made a similar trip there in 2016 during his first run for the presidency, but he will not necessarily get a warm welcome. About 70 per cent of Scots have an unfavourable opinion of Trump, while 18 per cent have a favourable opinion, an Ipsos poll in March found. His visit requires a major police operation that will cost Scottish taxpayers millions of pounds as protests are planned over the weekend. The union representing officers is concerned that they are already overworked and will be diverted from their normal duties. The overseas travel comes as Trump faces the biggest domestic political crisis of his second term in office. Allies and opponents alike have criticised his administration's handling of investigative files related to disgraced financier and sex offender Jeffrey Epstein's criminal charges and the circumstances of his 2019 death in prison. The issue has caused a rare breach with some of Trump's most loyal Make America Great Again supporters, and majorities of Americans and Trump's Republicans say they believe the government is hiding details on the case, according to Reuters/Ipsos polling. White House officials, frustrated by the ongoing focus on the Epstein saga, are hoping the controversy dies down while Trump is abroad, one person familiar with the matter said. with PA and Reuters

Australia, UK to ink 50-year deal to underpin AUKUS
Australia, UK to ink 50-year deal to underpin AUKUS

The Advertiser

time2 hours ago

  • The Advertiser

Australia, UK to ink 50-year deal to underpin AUKUS

Australia and the UK will ink a 50-year deal to underpin delivery of the AUKUS nuclear submarine agreement, amid concerns about a US review of the trilateral pact. AUKUS, formed in 2021 between Australia, the UK and US to address shared concerns about China's rising military ambition, is designed to enable Australia to acquire nuclear-powered attack submarines in the 2040s. But doubts have been raised about the future of the $368 billion program after the Trump administration this year initiated a review of the deal to examine if it met its "American First" criteria. Defence Minister Richard Marles said he remained confident about the future of US involvement on the eve of Australia and the UK signing a multi-decade bilateral deal cementing their commitment. "It is a profoundly important treaty that we will sign," Mr Marles said on Friday alongside Foreign Minister Penny Wong and their British counterparts John Healey and David Lammy. "It forms part of a trilateral agreement that we have and we are really confident about the progress of all three countries in bringing that to fruition." The treaty, to be signed in Geelong on Saturday, would allow "comprehensive co-operation" on the design, build, operation, sustainment, and disposal of AUKUS submarines, the ministers said in a joint statement. It will also support development of personnel, workforce, infrastructure and regulatory systems for Australia's nuclear-powered submarine program, the statement said. Mr Lammy said the treaty showed the strength of Australia and the UK's commitment to AUKUS. "It's clear that the UK-Australia relationship is an anchor in what is a very volatile world, providing stability in troubled waters and a relationship that holds steady whichever way the geopolitical winds are blowing," he said. Mr Healey said the UK was confident it could meet its obligations under the deal on industrial capacity to deliver SSN-AUKUS submarines. "We have the technology and the designs to be able to deliver our commitments to the SSN-AUKUS and we will," he said. Australia will pay $5 billion to support British industry to design and produce nuclear reactors to power the future AUKUS-class submarines. Australia will acquire at least three Virginia-class nuclear-powered submarines from the US in the early 2030s. On Sunday, the ministers will visit Darwin to observe joint military exercises known as Talisman Sabre, which comprise more than 30,000 personnel from 19 militaries. This year, the war games involve the UK's Carrier Strike Group, led by the Royal Navy flagship HMS Prince of Wales - the first UK carrier strike group to visit Australia since 1997. Australia and the UK will ink a 50-year deal to underpin delivery of the AUKUS nuclear submarine agreement, amid concerns about a US review of the trilateral pact. AUKUS, formed in 2021 between Australia, the UK and US to address shared concerns about China's rising military ambition, is designed to enable Australia to acquire nuclear-powered attack submarines in the 2040s. But doubts have been raised about the future of the $368 billion program after the Trump administration this year initiated a review of the deal to examine if it met its "American First" criteria. Defence Minister Richard Marles said he remained confident about the future of US involvement on the eve of Australia and the UK signing a multi-decade bilateral deal cementing their commitment. "It is a profoundly important treaty that we will sign," Mr Marles said on Friday alongside Foreign Minister Penny Wong and their British counterparts John Healey and David Lammy. "It forms part of a trilateral agreement that we have and we are really confident about the progress of all three countries in bringing that to fruition." The treaty, to be signed in Geelong on Saturday, would allow "comprehensive co-operation" on the design, build, operation, sustainment, and disposal of AUKUS submarines, the ministers said in a joint statement. It will also support development of personnel, workforce, infrastructure and regulatory systems for Australia's nuclear-powered submarine program, the statement said. Mr Lammy said the treaty showed the strength of Australia and the UK's commitment to AUKUS. "It's clear that the UK-Australia relationship is an anchor in what is a very volatile world, providing stability in troubled waters and a relationship that holds steady whichever way the geopolitical winds are blowing," he said. Mr Healey said the UK was confident it could meet its obligations under the deal on industrial capacity to deliver SSN-AUKUS submarines. "We have the technology and the designs to be able to deliver our commitments to the SSN-AUKUS and we will," he said. Australia will pay $5 billion to support British industry to design and produce nuclear reactors to power the future AUKUS-class submarines. Australia will acquire at least three Virginia-class nuclear-powered submarines from the US in the early 2030s. On Sunday, the ministers will visit Darwin to observe joint military exercises known as Talisman Sabre, which comprise more than 30,000 personnel from 19 militaries. This year, the war games involve the UK's Carrier Strike Group, led by the Royal Navy flagship HMS Prince of Wales - the first UK carrier strike group to visit Australia since 1997. Australia and the UK will ink a 50-year deal to underpin delivery of the AUKUS nuclear submarine agreement, amid concerns about a US review of the trilateral pact. AUKUS, formed in 2021 between Australia, the UK and US to address shared concerns about China's rising military ambition, is designed to enable Australia to acquire nuclear-powered attack submarines in the 2040s. But doubts have been raised about the future of the $368 billion program after the Trump administration this year initiated a review of the deal to examine if it met its "American First" criteria. Defence Minister Richard Marles said he remained confident about the future of US involvement on the eve of Australia and the UK signing a multi-decade bilateral deal cementing their commitment. "It is a profoundly important treaty that we will sign," Mr Marles said on Friday alongside Foreign Minister Penny Wong and their British counterparts John Healey and David Lammy. "It forms part of a trilateral agreement that we have and we are really confident about the progress of all three countries in bringing that to fruition." The treaty, to be signed in Geelong on Saturday, would allow "comprehensive co-operation" on the design, build, operation, sustainment, and disposal of AUKUS submarines, the ministers said in a joint statement. It will also support development of personnel, workforce, infrastructure and regulatory systems for Australia's nuclear-powered submarine program, the statement said. Mr Lammy said the treaty showed the strength of Australia and the UK's commitment to AUKUS. "It's clear that the UK-Australia relationship is an anchor in what is a very volatile world, providing stability in troubled waters and a relationship that holds steady whichever way the geopolitical winds are blowing," he said. Mr Healey said the UK was confident it could meet its obligations under the deal on industrial capacity to deliver SSN-AUKUS submarines. "We have the technology and the designs to be able to deliver our commitments to the SSN-AUKUS and we will," he said. Australia will pay $5 billion to support British industry to design and produce nuclear reactors to power the future AUKUS-class submarines. Australia will acquire at least three Virginia-class nuclear-powered submarines from the US in the early 2030s. On Sunday, the ministers will visit Darwin to observe joint military exercises known as Talisman Sabre, which comprise more than 30,000 personnel from 19 militaries. This year, the war games involve the UK's Carrier Strike Group, led by the Royal Navy flagship HMS Prince of Wales - the first UK carrier strike group to visit Australia since 1997. Australia and the UK will ink a 50-year deal to underpin delivery of the AUKUS nuclear submarine agreement, amid concerns about a US review of the trilateral pact. AUKUS, formed in 2021 between Australia, the UK and US to address shared concerns about China's rising military ambition, is designed to enable Australia to acquire nuclear-powered attack submarines in the 2040s. But doubts have been raised about the future of the $368 billion program after the Trump administration this year initiated a review of the deal to examine if it met its "American First" criteria. Defence Minister Richard Marles said he remained confident about the future of US involvement on the eve of Australia and the UK signing a multi-decade bilateral deal cementing their commitment. "It is a profoundly important treaty that we will sign," Mr Marles said on Friday alongside Foreign Minister Penny Wong and their British counterparts John Healey and David Lammy. "It forms part of a trilateral agreement that we have and we are really confident about the progress of all three countries in bringing that to fruition." The treaty, to be signed in Geelong on Saturday, would allow "comprehensive co-operation" on the design, build, operation, sustainment, and disposal of AUKUS submarines, the ministers said in a joint statement. It will also support development of personnel, workforce, infrastructure and regulatory systems for Australia's nuclear-powered submarine program, the statement said. Mr Lammy said the treaty showed the strength of Australia and the UK's commitment to AUKUS. "It's clear that the UK-Australia relationship is an anchor in what is a very volatile world, providing stability in troubled waters and a relationship that holds steady whichever way the geopolitical winds are blowing," he said. Mr Healey said the UK was confident it could meet its obligations under the deal on industrial capacity to deliver SSN-AUKUS submarines. "We have the technology and the designs to be able to deliver our commitments to the SSN-AUKUS and we will," he said. Australia will pay $5 billion to support British industry to design and produce nuclear reactors to power the future AUKUS-class submarines. Australia will acquire at least three Virginia-class nuclear-powered submarines from the US in the early 2030s. On Sunday, the ministers will visit Darwin to observe joint military exercises known as Talisman Sabre, which comprise more than 30,000 personnel from 19 militaries. This year, the war games involve the UK's Carrier Strike Group, led by the Royal Navy flagship HMS Prince of Wales - the first UK carrier strike group to visit Australia since 1997.

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