Sydney-based hedge fund Regal Funds Management has significantly reduced its stake in online luxury goods retailer Cettire, offloading 10.6 million shares between June 12 and June 17. The sale slashes Regal’s holding from a previously disclosed 15.3 per cent to 11.45 per cent, resulting in the crystallisation of tens of millions of dollars in losses. Cettire operates as an online platform selling well-known luxury brands globally, with the United States notably accounting for 40 per cent of its sales. Regal had been an initial backer, purchasing shares at an average price of $1.81 after Cettire listed at 50 cents in late 2020. This marks Regal’s first major reduction in its Cettire stake in two years.
Once a darling among small company investors, Cettire’s market value soared to almost $2 billion in March 2024, with Regal’s investment peaking at $220 million. However, the company has since experienced a sharp downturn. This decline is largely attributed to escalating investor concerns regarding its business model viability, a broader slump in luxury sales, and the imposition of duties on imported goods in the United States. Cettire’s share price has plummeted 96 per cent from its peak, losing nearly 75 per cent since the beginning of the year to trade around 21 cents a share on Monday.
Despite the company’s struggles, Cettire founder Dean Mintz remains its largest shareholder, holding 36 per cent of the company, valued at $28.8 million. Mr Mintz had previously cashed out $335 million through various share sales, although he has since repurchased $21.5 million worth of shares. Cettire has not issued a trading update since its half-year results in February, which reported a 2.6 per cent decline in sales to $382.7 million and a 28 per cent drop in adjusted earnings to $8.7 million. Crucially, Cettire’s auditor flagged material uncertainty over the retailer’s ability to continue as a going concern following several months of falling sales, despite the company recently partnering with Tmall Global to expand into mainland China.
