Based in Los Angeles, Jacques Marie Mage (JMM) produces and sells limited-edition designer goods, specializing in collectible eyewear. Helmed by French designer Jerome Mage, each item is handcrafted in Japan and sold globally through their website or a network of selected retailers. As part of their growth strategy, which aims at more than tripling the size of their business over the next five years, JMM is planning to open flagship stores in key markets internationally as they continue to expand in Europe Asia and the Middle East.
With buyers located all over the world, and vendors in Japan and Europe, overseas payments were managed in USD and inflows were in USD and EUR. With international growth this rigid approach to payments made cross border relationships more complex.
When Andrea Tonello joined the company as their new CFO in 2020, he quickly recognized that invoicing and making payments in local foreign currencies would be commercially advantageous for the company, enabling them to win more business and secure better vendor pricing. The problem, however, was that doing so would increase their cost of doing business substantially and increase their exposure to foreign exchange risk –considering the company’s aggressive growth strategy.
Opening new bank accounts overseas to collect receipts and pay local vendors, for example, would result in mounting banking fees. With a lean finance team who was already spending significant time managing multiple banking and payment provider platforms – adding new accounts and platforms to the mix would add cost, complexity and impact operational efficiency.
Alternatively, managing foreign currency collections and vendor payments from the US based USD checking account was undesirable too, as it exposed the company to foreign exchange risks like currency losses and expensive wire fees.
To support the company’s objective to expand into several new global markets over the course of the next five years, JMM was looking for a solution that would streamline collections and payments while also minimizing the potential expenses associated with their existing processes.