"Upscale" wrote in message
...

"JohnD" wrote in message
inconsistency. In the first case, when the currency movement
benefitted LV, no change could be made, due to currency commitments,
and catalog printings. In the latter case, when the currency movement
harms Lee Valley, then they abandon recently-distributed catalog
pricing and push it up. All I am saying, Einstein, is that this is
inconsistent.

No, it's business. Robin's first duty to his company is to see that it
doesn't lose money. When the Canadian dollar was worth more than the US
buck, it was only that way for a relatively short period. Nobody is
immediately going to change prices under those conditions until they're
fairly sure those rates are going to stay fairly consistent. They didn't
stay that way for long so no prices were changed.

However when the dollar went way down again, immediately LV would be
losing
money, so he has to address that condition immediately. That's his duty
and
it is what he did. There's no greed or inconsistency there, just ordinary
business.

I'm not a financial advisor, so don't take this for gospel. It's common
business practice to hedge against commodity price movements by holding
futures on those commodities. This has the effect of locking in the price of
that commodity. For LV, USD currency futures would lock in an effective
exchange rate for their US sales revenues. Losses from an adverse price
movement are offset by gains on the futures contracts, and vice versa. To
not hedge this way amounts to speculating on the commodity market. That's a
valid business model also, but should be undertaken as a conscious decision.
Maybe this will shed some light and take some of the angst out of the
discussion. But what does that mean in context of LV price adjustments? Was
John so far off mark to cry "Foul!" in the face of LV's stated policies?
Sales projections were undoubtedly skewed by the suddenly tight retail
market. They would then be over hedged, and losing money on the exchange
rate. It might also be they were playing a little lose and free with the
long term CDN strength on the dollar, scraping a few extra pennies on the
favorable exchange rate. They would then be under hedged and over exposed.
This is the scenario John paints, that LV was playing the market in their
favor with their customers' pocketbooks. Who's to say? I'm guessing there
was a little of both.