Value clothing retailers are coming under increasing scrutiny from credit insurers as trading conditions remain tough.
Big-ticket retailers have so far been among those most likely to come onto the insurance firms’ radars but the net is increasingly being spread more widely, the Financial Times reported.
Credit insurer Atradius senior manager for UK risk Simon Rockett told the newspaper: “Clothing retailers are increasingly being highlighted as an area to watch.
“Raw material costs are rising, and the value end of the market can only go so far in passing on price rises.”
However he said that retailers and credit insurers are increasingly engaging with one another, and that Atradius has met executives from 100 retailers in the past six months.
Rockett said: “This allows us to obtain up-to-date information about their trading strategy and exactly what they’re doing to deal with the current environment so we can continue to support them – a message that I think is often missed.”
Trade insurer Euler Hermes chief executive Fabrice Desnos said expectation management by retailers is crucial. “Insurers are more likely to react to bad news if they aren’t expecting it,” he said.