Insurers cancel New Look cover
9th January 2018
A key insurer has cancelled New Look's cover against insolvency to its suppliers.
Credit insurer Euler Hermes has stopped selling cover on new shipments of goods to the fashion retailer, which has stores in Stroud, Cirencester, Gloucester and Cheltenham. Other insurers are also thought to have reduced levels of cover for the company, as reported by Retail Gazette.
Credit insurance protects suppliers in the eventuality that a customer goes bust before the payment for an order can be made. Refusing to provide cover demonstrates a lack of confidence in New Look, which has suffered from falling sales. The knock-on effect could be further damage to the company, as suppliers will demand payment upfront when insurance is not available.
BHS, Woolworths and Comet all saw their insurers cancel cover before their collapse, although New Look says it has sufficient assets to get it through the rough patch.
Punchline says this is worrying for the high street as a whole and points towards a tough market in 2018 for all retailers.
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