Published
Feb 25, 2019
Reading time
2 minutes
Download
Download the article
Print
Text size

​More credit insurance woes for Arcadia? Tough retail backdrop continues to bite

Published
Feb 25, 2019

Suppliers who deal with UK fashion retail giant Arcadia have reportedly seen their credit insurance being cut further as trading in Britain's fashion market remains challenging.


Topshop



The Sunday times said at the weekend that major insurer Euler Hermes has contacted suppliers to tell them it's reducing cover levels for Arcadia due to generally deteriorating conditions in the retail sector and the weak consumer confidence at present that shows no signs of improving.

It's another sign of the headwinds facing British fashion retail with credit insurance having been cut or removed from a number of UK fashion retailers in recent periods. And of course, that insurance really is vital as it gives suppliers the confidence to provide their goods and to know that they will be paid even if the company they're supplying runs into difficulties. Without a credit insurance safety net, suppliers are less willing to sell to certain retailers or may demand payment upfront, which could seriously dent a retailer’s cash flow.

At the moment, Arcadia is reportedly working with Deloitte on restructuring plans for its sprawling retail empire, which includes Topshop/Topman, Miss Selfridge, Wallis, Burton, Dorothy Perkins and Evans.

It’s believed the company wants to close a large number of its stores and there have been reports that it's even considering a company voluntary arrangement but the company hasn’t commented.

The latest move by the credit insurer isn't in response to any specific bad news around Arcadia's operations though. Instead, it appears to be a reaction to the generally weak conditions on UK high streets. When it does hear specific bad news about certain retailers, it tends to take more drastic action. The newspaper said Euler Hermes is currently “in the process of removing cover entirely for suppliers to Monsoon Accessorize, citing the company's weak trading,” even though Monsoon itself said that it still has a strong cash position.

Copyright © 2024 FashionNetwork.com All rights reserved.