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Baugur in insurance talks

Baugur has kicked off talks with some of the of the world’s largest credit insurance companies in a bid to get them back on side and reissue cover to suppliers to some of its retail investments.

A source close to the talks with insurance giants Coface, Euler Hermes and Atradius said they were “moving in the right direction”. Some of the insurance companies withdrew cover last month after the collapse of Iceland’s three banks which had strong links with Baugur.

The reinstatement of insurance cover by the big trade credit insurers would be a boost to the retail group and the supply sector, which has been left exposed by a lack of cover.
Insurance giant Atradius told Drapers: “We are in ongoing dialogue. Atradius continues to cover some companies within Baugur’s portfolio.”

Coface said there had been “no change” since the firm pulled cover in some instances last month. A source close to Euler Hermes said: “We continue to support the Baugur group and discussions are ongoing.”

Separately, House of Fraser, which is part-owned by Baugur, said sales were down 1.1% to £1 billion for the year ended January 26 because of disruptions caused by store refits. EBITDA was up 30% on the equivalent underlying performance in the previous year. HoF said sales had improved since the year end and were up 2.7% for the 39 weeks to October 25.

HoF chairman Don McCarthy said: “We will be able to ride out the cycle and strengthen our position as the number one premium department store.”

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