KEY POINTS:
The kiwi may have reached stellar heights but has made Pumpkin Patch a falling star of the New Zealand stock market.
Pumpkin Patch executive chairman Greg Muir says that while the soaring kiwi is reducing some costs, its most tangible effect has been in dragging down the Pumpkin Patch share price.
Muir said the stock - whose value has dropped $1 over the past month to $3.20 yesterday - had fallen because it earned so much of its revenue overseas.
While attention has focused on the US dollar against the kiwi dollar - which passed US78c yesterday - Pumpkin Patch is exposed to other currencies with outlets in the UK and Australia.
UK profits recorded in the interim results to March 31 were at a time when the New Zealand dollar was worth 32 pence. Now it is worth 38 pence, he said.
"Australian operations deliver three-quarters of our earnings and the kiwi dollar has gone from A81c a year or so ago to A91c now," Muir said. "It's just huge and there is nothing we can do about it."
Funds management company Fisher Funds appears to see the upside to the slide. Last month it announced it had increased its stake from 10.4 per cent to 11.6 per cent of the children's clothing company.
In theory both retailers and consumers should benefit from the higher value of the kiwi against other currencies.
Retailers could have better margins and consumers could buy cheaper goods.
But publicly listed retailers Briscoe Group and The Warehouse are playing down the positive impact, insisting savings are being squeezed in a tough retail market.
A spokeswoman for The Warehouse said: "We take steps to smooth the effects of volatility in the NZ dollar through hedging, so the effects are not that noticeable in the short-term and are not immediately reflected in pricing."
"Where we can, we will lower prices as we have done on many lines over the past few years."
