The Very Group’s credit insurer Allianz Trade has cut cover for its suppliers, which threatens to increase financial pressures on the retailer, according to reports.

Allianz Trade has withdrawn cover “amid concerns over Very’s finances”, which it it also understood to regard as having “a heightened level of non-payment risk” in the current economic climate, according to The Times.

Very is understood to have had £62.6m in cash as of April 1, while pre-tax profit at the retailer dropped from £58.5m to £11.7m in the 39 weeks prior.

A spokesperson for The Very Group said: “One of several providers of credit insurance to our suppliers has reassessed its cover with respect to The Very Group.

“It has done the same with several retailers due to its view of the market. We continue to see other credit insurers maintain or increase cover.” 

The retailer added that it continues to have “constructive relationships” with its suppliers and it remains in a “robust liquidity position”.

Pureplay retailer Boohoo also had cover for its suppliers slashed by Allianz Trade earlier this year by an average of 50%, while credit insurer Atradius withdrew some of its cover for Asos suppliers in May.

Allianz Trade did not comment.

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