Case | HBS Case Collection | December 1994 (Revised June 1995)

Tiffany & Co.--1993

by W. Carl Kester and Kendall Backstrand

Abstract

The restructuring of Tiffany's retailing agreement with Mitsukoshi Ltd. in 1993 exposed Tiffany to substantial yen/dollar exchange rate volatility that it had not previously faced. This new exposure requires Tiffany to establish risk management policies and practices. Management must determine whether to hedge, what the objective of hedging ought to be, how much exposure to cover, and what instruments to use. Teaching Objective: To introduce students to the problems of risk management in a relatively uncomplicated administrative situation.

Keywords: Restructuring; Currency Exchange Rate; Management Practices and Processes; Risk Management; Agreements and Arrangements; Situation or Environment;

Citation:

Kester, W. Carl, and Kendall Backstrand. "Tiffany & Co.--1993." Harvard Business School Case 295-047, December 1994. (Revised June 1995.)