// THG has seen a reduction in the level of cover provided to its suppliers by one of the UK’s largest credit insurers
// Sources said the reduction in cover was “small” compared with the group’s overall level of credit insurance
Allianz Trade, one of the UK’s largest credit insurers has trimmed back insurance cover for suppliers to THG in recent weeks, the Guardian has reported.
Credit insurance is used to protect suppliers against the risk of a retailer going bust between the point of accepting an order and payment being made.
It is understood Allianz informed the group’s suppliers of its decision although it continues to provide cover for them, alongside other credit insurers.
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Sources close to THG, which owns brands including Lookfantastic, Glossybox and Cult Beauty, said the reduction in cover was “small” compared with its overall level of credit insurance, reflecting cover that was unused by suppliers and has no bearing on THG’s financial position.
The reduction is the latest headache for founder and chief executive, Matt Moulding, who has seen the value of his Manchester-based e-commerce group plunge since its IPO.
THG’s float was the largest initial public offering on the London Stock Exchange for seven years when it floated in September 2020, worth over £5bn. But since then, the stock has fallen by 93% to just 53p, valuing the business at £667m.
Last month Allianz Trade also lowered its cover for Boohoo group’s suppliers amid the fashion retailer’s concerns about its recent falling profits.
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