We've probably had some inquiries about what we're doing about about the strength of our dollar. I haven't been asked till today though. Other retailers have tried to address it but realistically most of those efforts are nothing more than a public relations exercise. Here's our situation:
- Many of the items we get from the US are actually bought from agents and wholesalers out of Eastern Canada. Those guys in Toronto/Montreal purchased the goods months before we ever get it. We pay them in Canadian currency and have asked them to have the exchange rate for future orders be reflective of the current situation.
- Items that we buy for immediates from the LA and NYC show markets have the most current exchange rate and is already reflected in the price.
- European goods, the Euro has risen in step with our currency. So no effect.
- Items we paid for already... well the rate would be as of when we paid for it. So if we bought it 3 months ago (I hope we don't have too much of that stock left!) then that's the rate. Even so, 6-7 months ago the exchange rate was $0.93 cdn to 1.00 usd vs. now of $1.03 cdn to 1.00 usd. New items ordered recently will have the current rate applied.
The items where you'll get the best deals are on cars, flat screen TVs or any other big ticket item. Items that would have been manufactured when the US dollar was highest 9 months ago. Fashion may be designed far in advanced but production is just weeks before a delivery date. There are many variables but ultimately it's not the kind of differences that you would see in other products. Unless you're the GAP, their business is about production efficiencies and not really fashion, so it's different.
We've done our best to pass the rate difference savings where we can. I guess with the few inquiries we've had, probably most people understand. Mind you the customer I was talking to today wasn't doing a fair comparison. I'd like to see her get that same Ed Hardy Sweater cheaper anywhere else in this city.
What's interesting is how some retailers are dealing with the situation. I was in
a store today (starts and ends in an "A") and they were making a point of showing that they were reacting to the exchange rate difference by offering a 20% discount on certain items. This was an obvious gimmick, since most of their items are Asian made and have never passed thru the US. Their business model would also make it that they paid for it before our strong dollar had happened.
So how or maybe more importantly why are they offering this discount? Looking at the items, I can tell right away the discounted items were their poor performers. They were probably getting discounted anyways since it's about the right time for markdowns. It does sound better to say that they're offering you a break on the exchange rate. I've got some sale items too, you can receive the benefits of a strong loonie in my store too! hahaha