Cettire: Boutique Inventory Allocation Strategy

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So, regarding the marketplace, how do they work? How do they integrate with your ERP? How do you manage the pricing that you put on?

All the marketplaces work with us. We decided four or five years ago that if a marketplace wants to work with us, they have to be integrated with our API. We have a system with a huge catalog containing all the references, prices, short descriptions, and three pictures. Depending on the marketplace, we share a pricing list. We always have an updated system. We give two main scores to the marketplace for the risk and the commercial conditions. We give them a score of one through four. Right now, it's four. We give scores so the team can understand why we do certain things. Then we decide on the rules. Cettire is one of the highest risk marketplaces we have, but it's also the first marketplace we have.

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Can you describe Cettire in terms of risk and commercial terms? How do you evaluate that?

Cettire is the highest-risk marketplace because in every selective distribution contract we sign each season, there's a clause of no sharing with Cettire. This applies to all the brands. So, for me, it's very high risk. We've had an agreement with them for five years. It's an old agreement where we have a base discount of 22%. I don't give them goods valued at less than a 22% discount, and I pay €8 per shipment. These costs are not immediately visible because they are not in the first margin but in the second margin. We always have to check with the administration office to ensure everything fits. In the last two years, since Farfetch was declining, Cettire became the primary marketplace, but it posed too many risks for us. I think it was last June or July that we decided to slow down because it's a rule not to depend on one client.

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When did China and Korea start to decline?

At the end of 2023. When we purchased a large quantity of goods, we bought a lot, but also faced issues. I think the problems started with Korea because they didn't have the funds to pay for the goods. So we ended up with stock that we hadn't planned for. My buying team didn't share the same vision regarding the stock, and we had dust accumulating on the packaging because we were waiting. In my business, you cannot afford to wait.

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