Credit insurance to fashion retailer cut
By Sarah Wood | 26th November 2018
Suppliers to Monsoon Accesorize have had their credit insurance cut, prompting concerns over its future trading.
Insurer Euler Hermes has reduced cover to suppliers by up to half, following three years of losses at the retailer, which has stores in Cirencester, Gloucester and Cheltenham, as reported by the Sunday Times.
Credit insurance protects suppliers against the risk of a company going bust between accepting an order and receiving a payment. When the insurance is cut, suppliers demand more payment up front, placing a financial strain on the retailer.
Suppliers to troubled retailers Debenhams and New Look are among those who have had their credit insurance cut this year.
Monsoon Acesorize is closing stores in an attempt to return to profit. Its parent company reported a loss of £12.6 million last year. Earlier this year it had 187 stores and £258m of rent to pay.
Punchline said: "This is more bad news for the high street in the run-up to Christmas, as increasing numbers of shoppers move online. We've already seen in 2018 what happens to companies which lose their credit rating. It's the start of store closures and even the road to pre-pack administration. Let's hope that doesn't happen to Monsoon Accesorize, because a lot of jobs are at stake."
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