Credit insurer Allianz Trade has pulled its cover for The Very Group’s suppliers following concerns about the retailer’s falling profits.
Drapers reported that the decision to withdraw cover was down to macro-economic pressures as consumers reduced their discretionary spend.
It comes as the retailer’s operating profit plunged 17% to £123.8m in the 39 weeks to 1 April 2023, down from £150.2m.
Group sales remained flat at £1.6bn due to 2.5% dip in retail sales as a result of the “heavily promotional environment”.
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A spokesperson for The Very Group told the publication: “One of several providers of credit insurance to our suppliers has reassessed its cover with respect to The Very Group.
“It has done the same with several retailers due to its view of the market. We continue to see other credit insurers maintain or increase cover with respect to the group.
“We continue to have constructive relationships with our suppliers, and our year-to-date Q3 results show Very revenue growth of 2.2% – ahead of the online non-food retail market – and a robust liquidity position.”
Allianz slashed its cover for Boohoo Group suppliers by an average of 50% in July, with some suppliers to the fast fashion retailer having their coverage level cut to zero in September.
Fellow insurer Atradius withdrew some of its cover for Asos suppliers in May amid concerns about falling profits.
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