Luxury goods marketplace Cettire is in the crosshairs of investors, with one instigating an investigation into the company’s complex supply network and customer service, while Australia’s competition regulator is probing complaints about its handling of disputes.

The Australian can reveal a global due diligence firm – which has conducted more than 100,000 investigations over 30 years, including a recent probe into Cettire – has uncovered a complex company operating structure, opaque supply and logistics network and lax complaints-handling processes.

The Cettire investigation included interviews with more than 100 sources including suppliers, luxury brand executives, former Cettire employees and consultants. The due diligence firm heard from sources who alleged that ASX-listed Cettire instructed some employees to draw out and deflect customer complaints made via email.

The report also claimed staff were often told to disconnect calls from customers seeking assistance or product refunds, and managers would sometimes reprimand employees who provided a satisfactory outcome to a ­customer.

The due diligence firm declined to be named as it was commissioned to conduct the work on behalf of a customer, an investor who trades actively in global markets and has a short position in Cettire. The investor wanted to conduct further due diligence on Cettire, given little transparency about the business and its ­founder.

Cettire is an online marketplace that ships more than a million orders per year, spanning high-end brands such as Louis Vuitton, Prada and Valentino, and is led by secretive rich-lister Dean Mintz, 38, who founded the company in 2017.

It operates a drop-shipping model which essentially connects wholesalers and distributors with end consumers, rather than dealing directly and only with the high-end brands.

Cettire has traded on the ASX since 2020 and cites a figure of about $2bn of available inventory through its website.

Dean Mintz founded Cettire in 2017

Separate inquiries by The Australian reveal how several customers have raised serious concerns about the quality and origin of luxury and designer products ordered from the Cettire website. Concerns have also been raised about the company’s complaints-handling processes.

The Australian understands a number of formal complaints to the competition regulator relate to Cettire’s handling of customer returns and complaints, and question whether the company is complying with its legal obligations. Responding to questions about Cettire, an Australian Competition & Consumer Commission spokeswoman said: “The ACCC does not generally comment on potential investigations or individual businesses.”

A Cettire spokesman declined to comment when asked about any engagement the company may have had with the ACCC, but noted it took customer service “very seriously” and benchmarked well against other luxury online retailers.

Cettire did not delay refunds, the spokesman added, and approved payments automatically once returned products were received by the supplier and passed a quality control check.

Cettire’s website shows it charges $30 for returns per item, while returns of more than $1000 incur an additional customs fee and any original shipping charges are not refunded.

On customer returns, Mr Mintz earlier this month told a Macquarie Group investor conference: “The whole flow backwards, forwards and back again – there’s no human intervention for us … There’s not a single Cettire employee doing anything there. At scale this is hard to do globally.”

He was referring to customers initiating their own returns through Cettire’s platform and the system being highly ­automated.

The company’s financial accounts show Cettire had a returns rate of about 23 per cent in the six months to December 31, up slightly from a year earlier. That is higher than the average rate of return for e-commerce businesses last year of 17.6 per cent, according to a report by multinational platform Shopify.

Cettire had some 644,026 active customers in the three months ended March 31, up 84 per cent from the same period a year earlier. For the six months ended December 31, Cettire said 58 per cent of gross revenue was generated from returning customers.

The Australian has, however, become aware of serious allegations against Cettire by two customers who have disputed transactions with their banks over what they claim is the supply of fake goods. A third customer believes the $1261 Valentino boots she received via the Cettire platform were either factory seconds or fake.

The Australian was unable to verify the authenticity of the goods and is not suggesting Cettire has shipped fake goods, only that customers have raised issues over the origin and quality of products received from orders.

Daniel Berman, a customer based in San Carlos in the US, is among those that have had a run-in with Cettire. He ordered a Polo Ralph Lauren hooded jumper from the company, but had issues when the product arrived and didn’t look right compared to others by the same brand he’d bought elsewhere.

Mr Berman got in contact with Cettire, which denied the product was fake, prompting him to engage with Ralph Lauren via their customer care text message service. “They (Ralph Lauren) said check the QR code (attached to the jumper) – it will tell you if it’s real, and it didn’t come up as real,” Mr Berman said. “They (Ralph Lauren) said they don’t deal with sales like that … you have to buy it from an authorised seller in order for it to be real.”

The Australian sighted a video showing Mr Berman’s QR authentication code did not work when he scanned the jumper.

After contacting Ralph Lauren, Mr Berman then got in touch with Wells Fargo, his bank, to assess what could be done. “They told me I needed to get two places that say it’s fake, so one was Polo and one was my mom (who runs her own tailoring business).”

Besides the QR code not authenticating the product, Mr Berman’s mother recognised a different zipper, backing behind the logo and other subtle differences between the jumper sent from Cettire and his existing Polo jumper. Wells Fargo sided with Mr Berman on the matter and reversed the payment.

Asked about Mr Berman’s complaint, Cettire’s spokesman said: “There is not a single confirmed case of a non-genuine item being sold on Cettire’s platform.

“We have strict and enforceable contractual terms with our suppliers … Cettire has instructed its Australian and US attorneys to sue the customer for deceit, injurious falsehood and to explore action for fraud.”

Ralph Lauren didn’t respond to requests for comment by The Australian. The company’s website notes, however, it is rolling out digital product identification for all its goods to protect its brand.

“These digital tags allow you to authenticate Ralph Lauren products with your smartphone by opening your camera and scanning the QR code next to the product label,” the company’s site says.

Fashion content creator Samantha Todd with a pair of new Valentino boots. Picture: Lyndon Mechielsen

Separately, a Sydney-based Cettire customer who purchased a French designer handbag earlier this year recently provided her bank with material to support her claims questioning the authenticity of the bag. The transaction was eventually reversed by the bank – which sided with her – and the financial institution returned the bag’s purchase price.

Another Cettire customer in Brisbane was entangled in a long-running dispute with the company, which she documented on TikTok. Samantha Todd, an influencer and content creator, splashed out on a pair of designer Valentino boots only to be disappointed when the heel came loose after a few hours of wear.

“They (Cettire) are supposed to be Australian … so I picked them because they were cheaper but seemed legit,” she told The Australian. “They broke when I was on vacation, which was so annoying, then I had to carry around these broken boots.”

Ms Todd wanted a replacement pair of boots but found it extremely difficult to deal with Cettire. “I was emailing them daily trying to get a response for two weeks. It was always ‘we’ll get to it, or you have to email this person or email that person’. It was ridiculous. I honestly think if I didn’t post it on TikTok and it didn’t get a lot of traction, I don’t think they ever would have helped me.”

Ms Todd said Cettire eventually sent out a second pair of boots, but this time the shoes had a tag from Cettire’s rival platform Farfetch affixed to them and were scuffed. While another pair of shoes ordered via the platform were fine, the returns process then started over again for the boots.

“They just didn’t respond for ages and then when they finally did respond they wouldn’t accept, they wouldn’t explain anything or answer any of my questions or accept any responsibility,” she added. “They eventually said if I send them back, they would give me a refund and then did they process the refund? No! I had to harass them for weeks.”

Ms Todd got in touch with the ACCC and her bank ING about Cettire’s handling of her complaint, particularly given she had sent the second pair of boots back.

While that was under way, Valentino saw her TikTok posts which had been viewed by millions of others. One of Ms Todd’s TikTok videos amassed more than 364 comments.

Valentino sent Ms Todd a new pair of boots free of charge after assessing her predicament.

Ms Todd remains of the view that both pairs of boots she received from Cettire were not as the product was advertised.

“They were a second or a fake, more likely a fake, because the leather was low quality. You could see it had marks on it when I unboxed it,” she said. “They felt different in weight to the real ones that I got from Valentino and when Valentino emailed me … they said they (the boots) definitely wouldn’t break after one wear.”

ING approved a chargeback for Ms Todd, which saw her transaction reversed by the bank and credit or debit card scheme, and the funds returned to her account. Cardholders can initiate a chargeback process with their bank to dispute a payment for reasons such as products being defective or not as described, duplicate transactions or if the goods were not received.

If companies incur higher than average levels of chargebacks by banks and credit card companies, that can impact the fees merchants have to pay to enable the processing of transactions.

Cettire’s accounts put the company’s merchant fees at about 3.6 per cent of sales revenue for the six months ended December 31. Analysis by anonymous blogger Taxloss this month said the relatively high merchant fees represented “another fragility” in Cettire’s model.

A Valentino spokesperson said Cettire was among the company’s authorised retailers.

Asked about Ms Todd receiving boots with a Farfetch label on them, Cettire’s spokesman said: “Many of Cettire’s suppliers could also sell on Farfetch’s platform. In extremely rare cases, it is possible there could be mismatches in packaging used by a supplier.”

Cettire’s prospectus from 2020 said key risks to the company included the “inadvertent sale of infringing products”, because Cettire said it drew on third-party suppliers to dispatch goods.

“There is a risk that branded products offered and supplied for sale through Cettire’s online platforms may infringe the intellectual property rights of third parties or other products. The inadvertent sale of such products could expose Cettire to allegations, claims and litigation from such third-party intellectual property owners,” it said.

“Claims of this kind would be disruptive and could damage Cettire’s reputation.

“Cettire may not be able to enforce its warranties against its suppliers for intellectual property infringement, particularly where a supplier operates, or is based, in a foreign jurisdiction.”

Cettire sales revenue from H1 FY24 results

The spokesman’s comments provided to The Australian seem to indicate that the situation has changed and contractual terms with suppliers now stipulate products must be genuine.

Another Cettire customer who has engaged with The Australian is Sara, an executive at a large global company, who didn’t want her surname disclosed.

She ordered a $2000 Prada bag via Cettire in February but was shocked when the box arrived empty at her home in Dubai.

Sara said Cettire “washed their hands” of the problem and after multiple emails they told her the bag had been shipped in the box. Sara subsequently got in touch with shipping company DHL and provided Cettire evidence of an X-ray scan which proved the bag was missing when they received the box.

After many weeks of no luck with Cettire, Sara filed a number of complaints and reports against the company, including with Dubai police’s cybercrime unit and her bank First Abu Dhabi Bank.

Sara eventually received a refund from Cettire in early May, about three months after her ­purchase.

The Australian has sighted DHL’s email to Sara and the receipt of the police report.

The due diligence firm’s sweeping report into Cettire also alleges the company has used a range of obscure suppliers, including some headquartered in places including Hangzhou City in China, the Marshall Islands, Hong Kong, The Philippines and Vietnam.

The probe found some shipping records since 2019 named Ark Technologies as the shipper of goods.

There are, however, also suppliers in Italy, with a Cettire order made by The Australian this month being dispatched from retail group Bellettini, according to DHL shipping records.

The Cettire spokesman said the company did not generally comment on supplier names, but it had previously communicated via the ASX that “it does not have any product suppliers based in China”.

Other online players in the luxury goods market have confronted a challenging period, with Cettire’s rival Farfetch acquired in a rescue deal by South Korean group Coupang.

That transaction provided Farfetch a capital lifeline and was completed in January.

In March, luxury retailer Matchesfashion collapsed, owing more than £210m.

That company held inventory rather than matching sellers with end consumers.

Cettire has bucked that trend and posted a $12.8m interim statutory profit in February.

The company has previously said it is pushing further into new and existing markets to pursue growth and has flagged the expansion into mainland China for its platform will occur in the final quarter of this fiscal year.

At the Macquarie conference earlier this month Mr Mintz and finance boss Tim Hume said Cettire’s operating model was low-cost and held no inventory which gave it a “structural advantage”.

Cettire employs about 70 staff, which is weighted toward engineering employees.

The company announced a direct brand relationship with fashion house Zegna in late 2022.