Credit cover withdrawn from Debenhams

by David Masters

Story link: Credit cover withdrawn from Debenhams

Credit insurer Euler Hermes has told some of Debenhams’ clothing suppliers that they will no longer be given credit insurance cover, according to the Telegraph.

Credit insurance covers suppliers if their customers fail to pay for goods.

As such, Debenhams may be required to pay its suppliers for clothing up front – a fate that drove Woolworths to bankruptcy.

Debenhams – which has debts of around £1 billion – discounted the rumour as irrelevant.

“Credit insurance is not an issue for Debenhams in getting stock,” a spokesperson for the company said.

Debenhams’ board must now decide whether to press ahead with plans to raise £200 to £300 million capital by selling equity.