New Look has had its credit insurance cut just weeks after a company voluntary arrangement (CVA) aimed at improving its fortunes was voted through.
HSBC has withdrawn credit protection for some suppliers of the embattled fashion retailer in a fresh blow to its turnaround efforts.
HSBC reduced the level of credit protection cover at the end of last year, but has now withdrawn it completely, according to Drapers.
It is thought the move will only impact a clutch of New Look’s suppliers.
HSBC’s withdrawal comes just months after a similar move by Euler Hermes amid concerns over the retailer’s trading performance.
In its most recent financial results, covering the 39 weeks to December 23, 2017, New Look suffered an underlying operating loss of £5.1m after like-for-like sales plunged 10.6%.
New Look’s creditors voted through its CVA last month, paving the way for the beleaguered chain to shutter 60 stores and axe almost 1,000 staff as it ramps up its transformation strategy.
However, it is understood the CVA could have been behind HSBC’s decision to stop selling New Look’s suppliers cover against insolvency.
A New Look spokeswoman said it did not comment on individual supplier arrangements, but added: “As previously communicated, we have adequate liquidity to deliver our plans which provides us with the operational flexibility to meet challenges presented by changes in supplier credit arrangements.
“We continue to work closely with our core strategic suppliers that provide New Look with more than 80% of our product and remain confident in our supply model.”