Fashion retailer Peacocks is understood to have become the latest retailer to have some of its credit insurance cut.

Credit insurer Euler Hermes has written to Peacocks to say it was cutting the amount of insurance cover given to some suppliers that provide clothing to Peacocks by up to 90 per cent.

Peacocks Group chief executive Richard Kirk confirmed the receipt of the letter to The Independent but added: “It is the wider clothing sector they [credit insurers] are withdrawing cover on.”

Kirk said suppliers insured by trade credit insurers only accounted for a small amount of clothing sold by Peacocks. “A huge chunk of our business is done directly with suppliers,” he said.

Other retailers to have had some credit insurance cut in the toughening economic climate include Currys and some of Icelandic investor Baugur’s fashion brands.