// Shop Direct to have credit rating probed by credit ratings agency Moody’s
// Losses for the online retailer widened by 645% in the 52 weeks to June 30
Shop Direct is having its credit rating investigated by credit ratings agency Moody’s after its losses widened by 645 per cent in the 52 weeks to June 30.
The losses were as a result of a £241 million provision for customer redress payments for historical shopping insurance sales.
Moody’s has placed under review the online retailer’s B2 corporate family rating, and B1-PD probability of default rating.
Moody’s does not expect Shop Direct to have any issues with liquidity in the following months.
The review will focus on sources of funding by Shop Direct, that dealt with the increased customer redress payments.
For the 52 weeks to June 30, Shop Direct reported a loss before tax of £185.5 million, which it attributed to an “unexpected surge in claims” in August.
It received over 276,000 PPI claims during the month, compared with a “typical” monthly run rate of 40,000.