Crockett & Jones MTO Central

[Isbister]

I do not discount your points. Mine were just a hypothesis. But to your point on the Pound/Dollar. While 7% doesn't seem like a lot, but it could be very relevant when your margins are thin due to inefficient use of factory resources. The drop in the GBP overall has taken it to an approximately 30 year low, which is hard to ignore.

True that full pull out would not occur until 2019 at the earliest, but the British Central Bank has already cut interest rates, while the US has increased rates, and there are predictions for further hikes this year. Which will further increase the strength of the Dollar relative to the Pound.

Who is to say whether C&J has taken all of these things into account, but I'm fairly sure they are not completely ignorant of them either.

Overall the most likely reason is, as you state, a "perfect storm" of factors.

Don't overlook the fact that, like all the Northampton boot and shoe companies, they export a great deal of what they make. In that respect, the fall in sterling translates into a greater profit margin, which should easily offset the higher input prices of raw materials such as cordovan (or French calf).

Far from making 'inefficient use of factory resources', they all seemed to be working flat out when I visited, two or three years ago. Not that the factories themselves are ideal. Edward Green's and G&G's are the only British shoe factories that are in any way modern. Most are little changed since the Goodyear machines were installed in the 1880s. But the fact that they are working flat out may be an inhibiting factor in taking on rather fiddly GMTO orders, which in the scheme of things probably are almost a bit of an irritant.

 

[ace13x]

Don't overlook the fact that, like all the Northampton boot and shoe companies, they export a great deal of what they make. In that respect, the fall in sterling translates into a greater profit margin, which should easily offset the higher input prices of raw materials such as cordovan (or French calf).

Far from making 'inefficient use of factory resources', they all seemed to be working flat out when I visited, two or three years ago. Not that the factories themselves are ideal. Edward Green's and G&G's are the only British shoe factories that are in any way modern. Most are little changed since the Goodyear machines were installed in the 1880s. But the fact that they are working flat out may be an inhibiting factor in taking on rather fiddly GMTO orders, which in the scheme of things probably are almost a bit of an irritant.

The fall in the GBP does not necessarily lead to an increase in profit margin. While it lowers the effective costs for buyers who are not on the GBP, which could lead to increased export sales, C&J has to take advantage of that. If they're factory is already near capacity, they will not be able to make enough shoes to offset increased material costs.

 

[Isbister]

@ace13x

I believe I am correct - Tricker's for instance, sell something like 80%+ of their shoes overseas (that is what I was told at their factory). Selling them for dollars, yen, euros, whatever - these will all convert to a proportionately greater number of pounds when the pound depreciates. The cost for buyers will only go down if they are paying in sterling (and clearly there are some who do), but most will be paid for in the local (export) currency.
Like all businesses importing and exporting, there is a lot of hedging, to cushion the effect of currency fluctuation of course.

 

[ace13x]

@ace13x

I believe I am correct - Tricker's for instance, sell something like 80%+ of their shoes overseas (that is what I was told at their factory). Selling them for dollars, yen, euros, whatever - these will all convert to a proportionately greater number of pounds when the pound depreciates. The cost for buyers will only go down if they are paying in sterling (and clearly there are some who do), but most will be paid for in the local (export) currency.
Like all businesses importing and exporting, there is a lot of hedging, to cushion the effect of currency fluctuation of course.

This is true if the price of the item is denominated in the foreign currency. If a company sells a widget forf 1 GBP, it will receive 1 GBP unless it chooses to leave the sale in the equivalent foreign currency. If it should, it is hedging that the GBP will further depreciate at which point they could then convert to more than 1 GBP. Many companies cannot afford to leave that revenue in fiscal limbo for very long.

In the specific case of shell C&J's. If they sell the shoes for say 500GBP, get paid in fewer dollars (if exported to the US) than in the past, (due to the recent depreciation), but then have to replace the shell and pay Horween in dollars, they have in effect made less. (or will make less on the shoes made with said purchased shell).

The way they can make this up, other than increasing prices, is to sell more shoes; that may be difficult if they do not have the capacity to do so. Particularly if their resources are tied up making special GTMO's.

I'm not saying you are wrong. I'm just saying there are other factors in play on which neither of us have information but C&J likely does.

 

[ace13x]

@Isbister Forgot to mention. On your example of Trickers: Remember, they may get more GBPs in the future due to depreciation for Dollars, Yen etc. earned today, but they have to pay their employees in GBPs today.

 

[zippyh]

TBH, I'm kind of surprised that C&J hasn't instituted some kind of minimum pricing on shoes bound for the USA ala Carmina and EG.
I wonder how much of a hit USA C&J retailers have taken recently.
As an example, US retail for an Islay is $775, but buy from the UK (and take off VAT) and price is about $480 plus shipping.

 

[devastitis]

No last second interest in the Dundees? Looks superior to the Lindricks imo.



https://docs.google.com/spreadsheet...MMnwLZw_BRkxZV59z6rk5SvZhk/edit#gid=990563036

 

[ace13x]

No last second interest in the Dundees? Looks superior to the Lindricks imo.



https://docs.google.com/spreadsheet...MMnwLZw_BRkxZV59z6rk5SvZhk/edit#gid=990563036

Isn't this now dead? or at least on hold?

 

[TommyB]

How are we doing on the Lindrick GMTO, is it getting closer to being submitted to the factory?

 

[BackInTheJox]



How are we doing on the Lindrick GMTO, is it getting closer to being submitted to the factory?

Speaking of which, I just received shipping notification for the brown Lindrick from several months ago. Very excited!

 

[KPDarb]

Speaking of which, I just received shipping notification for the brown Lindrick from several months ago. Very excited!

HOT DAMN THATS GOOD NEWS

 

[Vincent Chanal]

Speaking of which, I just received shipping notification for the brown Lindrick from several months ago. Very excited!

Good!

i have got nothing yet.

 

[chickenfark]

How are we doing on the Lindrick GMTO, is it getting closer to being submitted to the factory?

I will ask Lauren now! I assume we just have a couple payment stragglers.

 

[Vincent Chanal]

Good!

i have got nothing yet.

I have got the email from Lauren!

 

[ScarsdaleVibe]

I'm suppose to hear from her today on my Navy Dundees. I can't focus on work because of it!