Poundstretcher owner Crown Crest Group has had its credit cover cut as insurers continue to tighten terms for high street operators.
Leading insurer Euler Hermes has reduced its cover for suppliers to the discount chain, according to The Sunday Times.
Pound shops have been hit hard by the fall in the value of the pound since the Brexit vote almost two years ago.
Poundland encountered its own problems with credit insurance before Christmas, although much of that concern came in the wake of parent company Steinhoff’s accounting scandal.
Meanwhile, Poundworld owner TPG is understood to be in the process of drafting in restructuring experts as it seeks to mount a turnaround.
Credit insurers protect suppliers against the risk of a retailer going bust between the point of accepting an order and payment being made.
When insurers refuse to provide cover, suppliers often demand payment upfront, placing extra pressure on retailers’ balance sheets.
Crown Crest told The Sunday Times that most of its products were bought from the Far East and the open market where Euler Hermes does not cover suppliers, meaning a loss of cover would have minimal impact on the business.
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