The withdrawal of credit insurance from suppliers to Topps Tiles will not affect trading performance, the retailer’s management insisted.
Insurer Euler Hermes is believed to have made the decision as part of a wider sector review.
Topps Tiles chief executive Matthew Williams, who declined to confirm the identity of the insurer involved, said the withdrawal “only affects three to four suppliers of any real size” and that all suppliers will keep supplying to the retailer.
The move follows the reduction or withdrawal of cover by some insurers to sectors including fashion and electricals.
Focus DIY chief executive Bill Grimsey last month blasted credit insurers for making decisions based on the risk of the DIY sector as opposed to specific companies.
Williams said: “Reading between the lines, the credit insurer has taken a sector-wide view of the home improvement market, rather than a company-specific one.” However, sources said Euler Hermes deemed
Topps Tiles too risky, based on its “probability of going bust”.
But Topps Tiles house broker KBC Peel Hunt analyst John Stevenson said Topps Tiles has sufficient cash reserves to fund its own working capital.
Euler Hermes declined to comment on Topps Tiles. It said it bases decisions “on a case by case basis, never by a whole sector”.
l Euler Hermes reported 2008 profits suffered as payment defaults and corporate failures increased. Woolworths’ collapse, for example, cost it close to €59m (£52.2m).