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Credit insurer will not extend cover for UK retail sector

Europe’s biggest trade credit insurance company Euler Hermes has said it will not extend levels of cover to the UK retail sector.

According to the Financial Times, Euler Hermes has said that despite requests from clients concerned about the impact of more retail administrations this year, it will not extend cover.

The insurer charges a premium to protect suppliers that provide goods on credit against the retailer defaulting on payment.

At present Euler Hermes provides around £7bn of trade credit insurance to companies supplying the UK retail sector.

Euler Hermes told the FT it regards the UK retail sector as a “major concern” following recent high profile administrations including La Senza, Barratts and Peacocks.

The news will be of particular concern to independents across the UK, who are being hit by brands changing their credit terms as a result of credit insurance being withdrawn. Drapers highlighted the issue last November, finding that out of 24 indies, 15 had been impacted by brands changing their payment terms. Twelve predicted tighter payment terms would have a negative effect.

 

 

Readers' comments (1)

  • this was of course and obvious occurance. administrations and poor management of retail store has left suppliers out of pocket and allot out of business.

    no supplier now will deal with a store without insurance and there are some retail stores who cannot get insurance cover so it will be interesting year for some.

    i do feel sorry for the independants as all this trouble has come from high street chain mistakes.

    the high street have always been fast to pass on any bad news to suppliers, maybe its time the suppliers started to be a bit hard on the stores.



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