Department store Debenhams could be facing more problems as its leading insurance provider Atradius has pulled its cover for the retailer’s suppliers.
The news indicates there are fears regarding the department store’s future amid speculation that it could face closures or enter a CVA after appointing KPMG to help advise on restructuring the company.
Atradius is the company’s longest serving insurance provider and in July, it was reported that it had reduced cover along with Debenhams’ other providers Euler Hermes and Coface. Now Atradius has completely withdrawn its cover which could potentially put more pressure on Debenhams’ cash reserves.
When insurance companies reduce or completely withdraw cover, it usually means they have concerns that a business will be unable to pay its debts.
Atradius declined to comment when contacted by Retail Sector.
A spokesperson for Debenhams said: “Regrettably, we understand Atradius is reducing cover as a result of repeated press speculation about Debenhams. Credit insurers typically tighten cover when the retail industry is under pressure, and this is an issue affecting many retailers.
“We are managing this with our suppliers and continue to maintain more than adequate headroom on our facilities.”