Latest news with #US800
Canberra Times
01-07-2025
- Business
- Canberra Times
US Senate passes Trump spending bill, sends to House
An initial version passed with only two votes to spare in May, and several Republicans in that chamber have said they do not support the version that has emerged from the Senate, which the non-partisan Congressional Budget Office estimates will add $US800 billion ($A1.2 trillion) more to the national debt than the House version.
The Age
22-06-2025
- Business
- The Age
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. Loading 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. Loading 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.
Sydney Morning Herald
22-06-2025
- Business
- Sydney Morning Herald
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. Loading 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. Loading 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.
Sydney Morning Herald
03-06-2025
- Business
- Sydney Morning Herald
Hailey Bieber's ‘glazed donut' is a $1.5 billion gamble
But Elf is paying a pretty polished price for Rhode, also known for its sleek, minimal packaging. The $US800 million in cash and stock payable at the close of the deal, expected before September, equates to 3.8 times Rhode's sales of $US212 million in the year to March 31, 2025. Including the additional $US200 million payable based on Rhode's performance over the next three years, the multiple is 4.7 times. The latter is in line with the lush deal multiple on L'Oreal SA's purchase of natural beauty label Aesop two years ago. To justify the price tag, Elf must ensure that its new addition doesn't run out of, well, Rhode. The narrow product range is the obvious starting point for expansion. Elf has rolled out a raft of innovations, appealing to its Gen Z buyers and turbocharging sales, so this avenue looks promising. There is also scope for Rhode to reach a wider range of customers. The brand is already due to launch in Sephora in the US, Canada and the UK this fall, a major milestone. Longer term, Elf could leverage its partnerships with other retailers — it is available in Ulta Beauty in the US for example, in Douglas in Italy and Boots in the UK — to maintain the momentum. Assuming Elf doubles sales over the next three to five years — which looks feasible — then the acquisition multiple would fall to a more reasonable level of about two times. Loading But there are risks to this trajectory, the most significant of which is Bieber herself. So far, she has bucked the broader boredom with celebrity-led brands. But her relevance must be sustained. Six years ago, Coty made a big bet on the Kardashians, paying $US600 million for a majority stake in Kylie Cosmetics, founded by Kylie Jenner. A year later, it spent $US200 million on a 20 per cent stake in Kim Kardashian's beauty business. The results have been mixed. While Kylie Cosmetics has increased sales by 1.5 times over the past two years, helped by launches of skincare and fragrance, Kardashian's underwear label Skims recently acquired Coty's shareholding, resulting in a $US71 million loss for the US-listed company. Bieber will join Elf as Rhode's chief creative officer and head of innovation. The new owner also has a strong track record of connecting with Gen Z via social media, through viral moments such as its tie-up with Chipotle Mexican Grill. And it has some experience managing celebrity and influencer involvement. It acquired Naturium, the skincare line created by influencer Susan Yara and beauty-brand accelerator The Center for $US355 million two years ago. It also developed Alicia Keys' brand. Even so, Rhode being so closely associated with its founder is a risk that must be managed. This isn't the only challenge. Lindsay Dutch, analyst at Bloomberg Intelligence, expects Elf's sales growth to slow this financial year following a frenetic pace of revenue expansion. The beauty boom is also fading, although Ulta said after the deal was announced that many consumers were turning to fragrance and body lotion as a comfort and escape from economic uncertainty. There's also the pressure from US President Donald's Trump's tariffs. Elf makes about 75 per cent of its products in China and will add $US1 to all its products globally on August 1 to reflect the levies. With so much to grapple with already, taking a big bet on a celebrity-backed brand looks a surprising diversion. But as any beauty enthusiast knows, there is always room for one more lipstick, particularly if it's a peptide-infused pout enhancer.
The Age
03-06-2025
- Business
- The Age
Hailey Bieber's ‘glazed donut' is a $1.5 billion gamble
But Elf is paying a pretty polished price for Rhode, also known for its sleek, minimal packaging. The $US800 million in cash and stock payable at the close of the deal, expected before September, equates to 3.8 times Rhode's sales of $US212 million in the year to March 31, 2025. Including the additional $US200 million payable based on Rhode's performance over the next three years, the multiple is 4.7 times. The latter is in line with the lush deal multiple on L'Oreal SA's purchase of natural beauty label Aesop two years ago. To justify the price tag, Elf must ensure that its new addition doesn't run out of, well, Rhode. The narrow product range is the obvious starting point for expansion. Elf has rolled out a raft of innovations, appealing to its Gen Z buyers and turbocharging sales, so this avenue looks promising. There is also scope for Rhode to reach a wider range of customers. The brand is already due to launch in Sephora in the US, Canada and the UK this fall, a major milestone. Longer term, Elf could leverage its partnerships with other retailers — it is available in Ulta Beauty in the US for example, in Douglas in Italy and Boots in the UK — to maintain the momentum. Assuming Elf doubles sales over the next three to five years — which looks feasible — then the acquisition multiple would fall to a more reasonable level of about two times. Loading But there are risks to this trajectory, the most significant of which is Bieber herself. So far, she has bucked the broader boredom with celebrity-led brands. But her relevance must be sustained. Six years ago, Coty made a big bet on the Kardashians, paying $US600 million for a majority stake in Kylie Cosmetics, founded by Kylie Jenner. A year later, it spent $US200 million on a 20 per cent stake in Kim Kardashian's beauty business. The results have been mixed. While Kylie Cosmetics has increased sales by 1.5 times over the past two years, helped by launches of skincare and fragrance, Kardashian's underwear label Skims recently acquired Coty's shareholding, resulting in a $US71 million loss for the US-listed company. Bieber will join Elf as Rhode's chief creative officer and head of innovation. The new owner also has a strong track record of connecting with Gen Z via social media, through viral moments such as its tie-up with Chipotle Mexican Grill. And it has some experience managing celebrity and influencer involvement. It acquired Naturium, the skincare line created by influencer Susan Yara and beauty-brand accelerator The Center for $US355 million two years ago. It also developed Alicia Keys' brand. Even so, Rhode being so closely associated with its founder is a risk that must be managed. This isn't the only challenge. Lindsay Dutch, analyst at Bloomberg Intelligence, expects Elf's sales growth to slow this financial year following a frenetic pace of revenue expansion. The beauty boom is also fading, although Ulta said after the deal was announced that many consumers were turning to fragrance and body lotion as a comfort and escape from economic uncertainty. There's also the pressure from US President Donald's Trump's tariffs. Elf makes about 75 per cent of its products in China and will add $US1 to all its products globally on August 1 to reflect the levies. With so much to grapple with already, taking a big bet on a celebrity-backed brand looks a surprising diversion. But as any beauty enthusiast knows, there is always room for one more lipstick, particularly if it's a peptide-infused pout enhancer.
