House of Fraser suppliers have seen their credit cover cut following a downgrade in its credit by ratings agency Moody’s.
A House of Fraser spokeswoman said that it believed around 20 of 650 suppliers were covered by the insurer in question. Those suppliers are now faced with finding new insurance and could demand upfront payment for their goods.
The beleaguered department store is the latest in a series of retailers to see supplier credit cover withdrawn or trimmed. New Look, Maplin and Poundland have all suffered the same setback.
House of Fraser saw two more senior management departures last week with chief information officer Julian Burnett and chief operating officer Peter Gross exiting following a restructure.
Gary Slattery, who had been retail director since 2016, will now take up the newly created role of executive director for retail. Gary Monk, who was appointed to the role of transformation director last year, will become executive director for operations.
House of Fraser is currently in turnaround mode, with new boss Alex Williamson trying to engineer a comeback in an intensely difficult market.
In addition to the credit downgrade from Moody’s, House of Fraser posted dismal Christmas trading results, in which online sales fell 7.5%. It is also attempting to seek substantial rent reductions from landlords.
The retailer is seen as one of the weakest players in an under-pressure sector: department stores face unprecedented challenges as a downturn in consumer confidence as a result of Brexit couples with structural market pressures.
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