New Look faces more difficulties as its credit insurance is cut less than a month after a company voluntary arrangement (CVA) was approved by creditors.
According to Drapers, HSBC has withdrawn credit protection for some suppliers of the fast fashion retailer after initially reducing its level of credit protection at the end of 2017.
It means another blow to the business as it continues to work on streamlining its store portfolio, with 60 store closures and almost 1,000 job losses in the pipeline.
Although HSBC’s withdrawal will only impact a small number of New Look’s suppliers, it’s thought the CVA could have prompted HSBC’s decision to stop selling New Look’s suppliers cover against insolvency.
The move comes only a few months after Euler Hermes halted the sale of protection against insolvency to suppliers of the retailer.
Click here to sign up to Retail Gazette‘s free daily email newsletter
1 Comment. Leave new
Another case of HSBC wanting their cake and eating it too. Of course financial institutions need to be frugal and to protect their depositors and investors from the downside, but it goes to show that you can be a small business or a multi-billion pound company and commercial banks will reap the profits from the loans, but pull the rug from under you when things get a little hairy.