Foreign Exchange Case Study

Foreign Exchange Case Study

Large Retailer

  • A rapidly growing retailer with COGS denominated in Dollars, Sterling and Euros
  • No official/documented treasury or risk management policy in place
  • Decision making was ad hoc and often knee Jerk.

Rochford was engaged to:

  • Construct a hedging policy aligned to the company’s buying cycle
  • Create a process of weekly exposure reporting of a FX risk management committee consisting of the CFO, Head of Buying and Rochford
  • Weekly 15 minute meeting to discuss risk management
  • Weekly decision making, even doing nothing should be an informed decision
  • Monthly policy compliance board reporting.

Outcomes:

  • Budgets and cash flow protected from a depreciating AUD
    • The impact of currency volatility is smoothed over time
  • Allowing key staff to focus on strategic objectives
  • Allowed for value enhancing investments/achievement of strategic objectives
    • New product lines
    • Aggressive new store roll out/acquisition