The Debenhams is trying to reassure the city’s financial health after the best loan insurer cut cover for suppliers to troubled retail chains.
“Euler Hermes” is understood to have reduced the cover against the backdrop of growing concerns about the ability of Department store giant to pay your bills on time and in full.
In the credit insurance industry source said the decision to reduce the case will be taken to “avoid unacceptable risk” and “sign similar to what other unsecured creditors can do” to limit the risk of unpaid bills.
The source added that the credit insurers have carefully considered the retailers, as they came under increasing pressure from online competitors.
“There are many companies out there, in the scene that have a more traditional portfolio and are exposed financially,” they said.
The Debenhams is trying to reassure the City, is in financial good health
The debenhams website has released this year’s three profit warnings, blaming “increased competitor discounting and weakness in its key markets” in its latest update last month. Rival credit insurance companies euler Hermes and coface also cut back cover for suppliers of the retailer, according to the “Sunday times”.
The changes relate to new business and existing contracts with the supplier are considered to be unchanged. In a statement, Debenhams said it was “a healthy balance sheet and cash position.”
“All credit insurers continue to provide cover for our suppliers, and we maintain a constructive relationship with them. It is well documented that market conditions are challenging, but Debenhams continues to be profitable, has a clear strategy and taking decisive steps to strengthen the business,” the firm added.
The Debenhams is the latest seller will come under pressure, after house of Fraser was forced to shutter 31 stores and axe 6,000 jobs, marks & Spencer said it will be close to 100 stores, and John Lewis has warned its profits will be “significantly below” this year.