Monsoon Accessorize has seen its credit insurance cut as concerns continue to grow about the retailer’s financial health.
According to The Sunday Times, credit insurer Euler Hermes has scaled back its cover by up to a half, potentially causing chaos in its supply chain over the coming months.
This comes as its parent company Drillgreat reported pre-tax losses of £10.5 million in the year to August 26, dropping from £17.9 million in 2016, with sales remaining flat at £424 million.
Months earlier Drillgreat opted to separate Monsoon and Accessorize into individual retail fascias, closing around 140 stores with the joint branding.
Over the year, Drillgreat saw its staff numbers drop 12 per cent to 2737, including 100 administration roles and over 250 instore roles as 18 stores were scrapped.
Suppliers purchase credit insurance to ensure their losses would still be covered should a company collapse, but insurers either hike the prices or remove cover entirely when a company looks likely to fail before it can pay its creditors.
This year alone insurers have withdrawn cover on Poundworld, Debenhams, Footasylum, House of Fraser, New Look and The Original Factory Shops (Tofs).
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