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Brexit vote pushes up cost of Lego for UK


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All companies are using Brexit as an excuse to bump up prices when in reality any big global multinational company such as Lego should have appropriate fx hedging strategies in place to offset any major currency moves that affect their business, whether it's earnings from their major markets or paying suppliers etc.

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8 minutes ago, Cheese said:

All companies are using Brexit as an excuse to bump up prices when in reality any big global multinational company such as Lego should have appropriate fx hedging strategies in place to offset any major currency moves that affect their business, whether it's earnings from their major markets or paying suppliers etc.

Not to mention they’re pricing off the highs not the mean. (I don’t recall any price falls when GBP hit 1.40 in 2015) 

And claiming that the latest GBP cost increase is Brexit related is somewhat disingenuous.  

Presumably USD prices will increase as well. 
 

eurusd.png

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1 hour ago, Cheese said:

All companies are using Brexit as an excuse to bump up prices when in reality any big global multinational company such as Lego should have appropriate fx hedging strategies in place to offset any major currency moves that affect their business, whether it's earnings from their major markets or paying suppliers etc.

Sorry mate but I'm laughing.

there is a significant difference between "major" and "catastrophic" term. What happened to Pound Sterling is not a major move but catastrophic-historical plummet leaving economy at the edge with perspective of recession and currently skyrocketing inflation.

and if you can read LEGO annual reports you can clearly see they have such funds for such damage control, but what happened to Pound Sterling is a way beyond capability of those holdings.
and now customers will pay for that.

Those countryside folks didn't understand the simple term of economic consequences of Brexit vote, they thought it was just for sealing the borders limiting immigration and NHS money deceived by those "Brexit" front populist leaders now declaring "well It's not what we meant" but now you can only cry over spilled milk.

 

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2 hours ago, feed said:

Not to mention they’re pricing off the highs not the mean. (I don’t recall any price falls when GBP hit 1.40 in 2015) 

And claiming that the latest GBP cost increase is Brexit related is somewhat disingenuous.  

Presumably USD prices will increase as well. 
 

eurusd.png

Lego can't raise the USD prices as Trump will not be able to build his wall out of Lego resulting in the EU getting the Fire and Fury treatment

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Well Lego should have come to me and my boys. During the night of the referendum we were doing huge fx forward swap transactions for hedging purposes. Some of them had notionals in billions which to this day has helped many of my clients to maintain their existing business models and ultimately not pass on costs to customers. When the first votes came back negative just after midnight we were pricing in USD/GBP at 1.20 and advised clients to also do the same. Those that listen are now laughing.

 

This is major. Catastrophic is when currency controls get removed such as when the Swiss removed their CHF peg. That's when a lot of people lost their shirts and never recovered. Look at that movement. I have friends who had Swiss franc mortgages who have now defaulted and they were well and truly screwed.

 

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50 minutes ago, Val-E said:

To be fair, they were in no rush to lower prices when the pound was well above 1 euro 25 for a sustained period.

They can´t make a special UK sized set for the same price with less parts, which is what most food companies have done.

09toblerone-web1-facebookJumbo.jpg

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Guest TabbyBoy
12 minutes ago, Shewie said:

09toblerone-web1-facebookJumbo.jpg

Oh yeah, when the 50g Toblerone turned into an Obleron. Some of these companies think we were born yesterday. I no longer buy Toblerone.

Brexit ain't happening yet (I think it'll be blocked) so it's all scaremongering. If LEGO want to price themselves out of the UK, let 'em.

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