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UK DIY News

Poundstretcher loses credit insurance

Poundstretcher store

There's further signs of trouble on the high street, as discounter Poundstretcher with 410 stores has had its credit insurance restricted, according to the Sunday Times.

It's understood that credit insurers Euler Hermes have tightened terms on the discount retailer’s owner Crown Crest. 

Poundstretcher is the latest large retailer to experience a cut in its credit insurance, with New Look and House of Fraser both announcing similar news earlier this year. The electronics retailer Maplin saw its credit insurance cut before it fell into administration last month.

Credit insurance is offered to protect suppliers from losing money should a company fall into administration before they receive payment for the delivery of stock or services and it's often seen by the market as a red-flag for companies who are struggling financially. When insurers refuse to provide cover, suppliers often demand payment upfront, putting extra pressure on working capital.

Poundstretcher owner Crown Crest, a holding company for Aziz and Rashid Tayub, said most of its products were sourced from the Far East and the open market where Euler Hermes does not cover suppliers — so the loss of cover would have little impact on the business.

Source: Insight DIY Team

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19 March 2018

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