Trump slump smashes major Aussie company
A brutal two-punch combo of Trump tariffs and inflation shocks is crushing the stock prices of major Australian fashion retailers, with luxury brand Cettire leading the dramatic slump.
The company started off the year with a market capitalisation of nearly $600m, but a precipitous 81 per cent decline in its share price since January 2 value means it is now worth just $115m.
Moomoo market strategist Jessica Amir warned 'serious alarm bells' were ringing about the survival of the company, which sells high-end products worldwide through its online platform.
'It's safe to say there are some serious questions about a potential receivership,' she said.
In a trading update from June 12, Cettire announced just $500,000 in earnings for the financial year ending May 31, though sales revenues lifted 1.7 per cent to $693.8m.
The company now has $45m left in cash, down from $79m in March.
Cettire founder and CEO Dean Mintz blamed trade uncertainty around US tariff policy in part for the difficult trading environment.
'Recent results from luxury industry participants point to continued challenges in the sector, amplified by trade uncertainty surrounding US tariff policy,' he said.
'As a result, elevated promotional activity persists across the market.'
While Cettire's share price is tanking, there are avenues the company could pursue to avoid any fall into administration, for example a capital raise or taking on a new debt facility.
It is not the only ASX-listed apparel business to record a disturbing slump in value this year.
Footwear retailer Accent Group has slumped 45 per cent, while KMD Brands, which sells the Kathmandu and Rip Curl brands, has tumbled 33 per cent.
City Chic has retreated 26 per cent.
At the start of the year, KMD was worth about $300m. Now it is worth less than $200m.
Some of the retailers point to US President Donald Trump's tariff shock for creating additional challenges in their businesses.
In a trading update from June 19, KMD estimated tariffs would strip about $1m in earnings from the company across the 2025 financial year.
'The (company) continues to closely monitor the fluid US tariff situation and it remains too early to estimate the impact on consumer demand in the US,' the company said.
'Given the uncertainty in the US market, agility remains the (company's) main priority heading into 2026.'
In an update from May 5, City Chic has warned some 20 per cent of its revenue was generated in the US and 90 per cent of its products were sourced from China, a big target for tariffs.
'Due to the tariff situation and its potential impact on consumer demand, USA sales expectations have been reduced for FY26,' the company said.
But global trade chaos is not the only pressure mounting on fashion stocks, Ms Amir cautioned.
Rising oil and electricity prices are also eating away at consumer spending power.
'The things we're paying every quarter and every month are far higher than they were,' she said.
'Petrol costs are up markedly and that's because the oil price is up.
'It means you've got less money left over to buy things like a luxury designer handbag from Cettire, or that Rip Curl jumper.
'You might want to get out your needle and thread and sow up your Kathmandu. You're not exactly going to go out and buy another one.'
The benchmark ASX200, which tracks the 200 largest companies on the Australian stock market, has advanced 3 per cent year-to-date.
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