Shop Direct bond values drop as FCA crackdown looms

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Shop Direct

Shop Direct’s lenders have seen the value of their investments dive 15 per cent after concerns a Financial Conduct Authority (FCA) crackdown could damage its business.

The Littlewoods and Very owner’s lenders have been left around £55 million worse off as they scramble to offload bonds.

Lenders have become concerned that an FCA review of borrowing rates for shoppers, which is due over the next two weeks, will severely affect the groups lending arm.

The retail group’s loan arm, which allows users to purchase items on credit, is a key driver of sales for the group.

However, this has now come under threat from the looming FCA consumer credit review, leading to investment bank Credit Suisse to place a “sell” rating on the bonds.

“This thing is at the centre of a perfect storm,” a leading Shop Direct bondholder told the Evening Standard.

“It straddles two of the most troubled sectors — retail and consumer credit.”

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