Poundland’s trade cover has reportedly been reduced by credit insurer Atradius in the wake of parent company Steinhoff’s accounting scandal.
The value retailer’s credit cover was cut down yesterday by Atradius, which could lead to stock availability issues early in the new year, according to The Grocer.
One grocery supplier told the trade title that his business will not provide any more stock to Poundland at this time as it does not supply retailers without full trade cover as standard.
Atradius declined to comment on the story.
A spokesman for the value retailer said: “Poundland is a profitable, cash-generating business that’s currently trading more strongly that it has in almost five years – with positive like-for-likes and real momentum.
“That’s why, while we certainly can’t predict the consequences for Steinhoff from the events of the last week, any action by credit insurers to make life difficult for Poundland suppliers is irrational.”
A source close to the situation told Retail Week that Poundland had not seen any reduction to its supplier deliveries and that the retailer would “work very hard to make sure suppliers understand the full story”.
The value retailer, which reshuffled its management team and put Barry Williams at the helm in September, leads Steinhoff’s stable of UK retailers, which also include Bensons for Beds and Harveys.
The reported reduction to Poundland’s credit cover comes after parent company Steinhoff’s executive chairman Christo Wiese’s resignation.
The South African retailer conglomerate’s shares crashed around 80% since it postponed its full-year results last week as a result of “accounting irregularities”.
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