The electricals group has emerged as one of the companies affected by credit insurer Atradius’s decision to reduce cover across the stores industry.
A DSGi spokesman said: “Atradius is only one provider of credit insurance in the market. Whilst it is true Atradius have reduced, but not withdrawn, credit insurance across the retail sector, this is not a DSG-specific issue.”
He added that DSGi’s suppliers still have access to credit insurance and continue to supply the retailer, and that there have been no changes to its supplier terms.
He denied claims that the retailer could face stock shortages in the run-up to Christmas.
DSGi is the latest in a string of big-name retailers to be hit by changes to credit insurance risk cover. In September, Atradius and fellow credit insurer Euler Hermes withdrew their cover on Woolworths because of fears that it may collapse. Baugur’s retail investments were also hit when cover was withdrawn after the collapse of the Icelandic banking system.
The decision to reduce cover on DSGi came as credit ratings agency Fitch downgraded the electricals retailer this week, citing deteriorating consumer spend on discretionary goods. At the end of last month Moody’s also placed DSGi under review for a possible downgrade.
Atradius declined to comment on particular companies. A spokesman said: “As risk increases on a number of companies in a sector, it may result in scaling back our exposure.”
He added: “Reducing cover simply means setting a new, lower limit on the amount of credit that is insured with a specific buyer, which would affect new deliveries to that buyer.”
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