👉 Background: Cettire was founded back in 2017 in Australia as a luxury fashion retailer, stocking all the big brands like Prada, Gucci, Saint Laurent and many many more. However, it’s a grey-market reseller because it doesn’t deal with the luxury brands itself, but with 3rd party distributors of the brand.

👉 What happened: Now, Cettire has warned that they have elevated inventory levels and a softening of demand from consumers. As a result, they’re planning to run “aggressive promotions” on luxury goods.

👉 What else: While discounting prices on luxury goods may help drive Cettire sales, it creates brand dilution for luxury brands. And clearly investors didn’t think too highly of this discounting-strategy with Cettire's shares dropping more than 8%.

What's the key learning?

💡Luxury brands maintain their brand value through limited supply and even more limited discounting.

💡But a brand can lose its exclusivity when platforms like Cettire aggressively discount their luxury items.

💡We’re already started to see a shift in Gen Z’s perception of luxury shopping according to a new Bain report:

• Global luxury spending is expected to reach nearly €1.5 trillion in 2024, but this is flat compared to 2023
  
• Luxury customer base has shrunk by around 50 million people over the last two years — particularly Gen Z

So while Cettire is discounting everything to sell products, luxury brands are a little more concerned about the long-term impact.