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across the UK, who are being hit by brands changing their credit terms as a result of credit insurance being withdrawn.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.