Henleys is slashing its account base by 25% after the credit crunch stymied the young fashion brand’s ability to insure orders from some of its stockists.
Henleys said it would axe between 80 and 100 of its stockists out of its total account base of 350. The brand, which is best known for its T-shirts, said it was also streamlining distribution to ensure it was represented in the best and widest way possible. It said it would cull accounts on a case-by-case basis.
Issues with getting credit insurance on orders have become a broader problem for fashion brands in recent months as the credit crunch has led to insurance companies tightening up on cover for retailers.
Both brands and retailers are having to come up with solutions to work around the difficulties, including pro-forma payments and payment plans.
A source close to Henleys said: "Henleys is losing credit insurance on a lot of accounts and that is a pre-requisite, especially if there is no sales history. It is still working with the good accounts but some will fall by the wayside, like the poor payers. It is good to keep reviewing the business. I don’t think that Henleys is being unreasonable."
However, one independent account which has been axed by the brand contacted Drapers and said: "Henleys' commitment to the independent retailers that helped develop the brand to what it is today leaves a lot to be desired. Given the current market climate and tendency for every brand to have its day, I wonder how long it will take for Henleys to come calling again when one or two of the big retailers pull the plug on their forward orders?"