(Bloomberg) -- Shares of an Australian luxury e-commerce firm that’s surged nearly 680% this year thanks to stay-at-home shoppers could cool on supply concerns and as global lockdowns end, analysts said. 

Cettire Ltd. is an online retailer that buys wholesale high-end goods like hand bags and heels from Europe resells them at a big discount to shoppers in the U.S., Australia and elsewhere. Its brands include LVMH Moet Hennessy Louis Vuitton SE’s Fendi and Kering SA’s Gucci.

That strategy has allowed the firm to top the S&P Global Luxury Index this year, beating the likes of Chow Tai Fook Jewellery Group Ltd. and Hugo Boss AG. Since listing in December, its shares have jumped more than sevenfold and are up 41% this month alone.

However, some headwinds may be ahead. High-end firms are also pivoting away from wholesale discounts, which could crimp the supply of luxury goods to so-called gray market firms like Cettire. Meanwhile, pandemic-linked curbs easing from the U.S. -- where the company gets the lion’s share of revenues -- and Australia could damp sales. 

“We know that the most important brands still exposed to wholesale are cutting their wholesale exposure to the bone. This will limit the growth prospects of gray market players and arbitrageurs,” said Luca Solca, an analyst at Sanford C. Bernstein. “I am not sure that Cettire may have a sustainable business model long-term.” 

The company was not immediately available for comment. 

Prada SpA said in July that wholesale revenues were down 37% versus the same period in 2019 on its selective approach to develop retail. Kering SA said that wholesale was down more than 40% in recent years, consistent with Gucci’s strategy to increase control of its distribution channel.

Well-run retailers may be able to withstand cutbacks on wholesale, according to Bloomberg Intelligence analyst Deborah Aitken. She says that while Cettire’s shares may lose some momentum after the strong run, e-commerce sales remain resilient. 

Cettire’s gross revenue jumped 333% in its full-year results in August. Active customers, or those that have made a purchase in the last 12 months, increased 285% to 114,830, the company said. 

Aitken points out that Cettire’s U.S. peer, Farfetch Ltd., has already seen better days but is still up substantially from its pre-pandemic levels. Farfetch’s shares surged 517% in 2020 but tumbled 36% this year, putting it near the bottom of the S&P Luxury gauge.

Global pandemic-related curbs easing may also hit the firm. The U.S. will soon allow entry for most foreign air travelers, the latest in its reopening efforts. Meanwhile, Australia’s most-populous state is preparing to wind back stay-at-home while the country is aiming to open its international border by Christmas. 

“The important question is whether the consumers that have migrated online during the pandemic will continue shopping online once stores reopened,” said Chloe Stokes, an investment manager at Forager Funds Management Ltd.

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