“While we try to hedge some of our buying, we were still badly hit by the devaluation of sterling against the euro over the past 12 months,” says Tenison, who founded the £18.5m-turnover maternity and childrenswear company 15 years ago. “The dollar rate is also proving to be a real concern. We have hedged 50 per cent of our buying – but that leaves us vulnerable for the other half and margins have been hit by the scary drop in sterling.

“This time of the year is our heaviest for purchasing. We are now recalculating our cash flow forecasts with a very pessimistic view on currency. This will hit our margins and has resulted in us having to move some of our production to lower-cost countries.

"Our hedging deal regularly needs renegotiating and it’s difficult to know whether to cut our losses and accept the poor rates on offer at the moment, or to hold on and hope that the market has hit rock bottom and will start to look better.

Tenison says she’s taken advice from a variety of sources – but it boils down to “hedge as much as you can not afford to loose”.

“Some experts are telling us that sterling will drop as low as $1.40. Others think it will be back up to around $1.80 within the next six to 12 months. It’s a gamble we’d rather not take. Where possible, we’ll continue to negotiate our buying in sterling, comparing deals to the hedging rates we’ve achieved in the past before committing to the purchase.”

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