New Look has credit insurance withdrawn
High street retailer New Look is facing another challenge following the withdrawal of credit insurance to a number of its suppliers.
Credit insurers, including Euler Hermes, are understood to have stopped offering cover on new shipments of goods to New Look, although they are providing cover for existing orders, while QBE is believed to have reduced its level of cover, but not to have withdrawn altogether, reports The Sunday Times.
New Look has had a tumultuous time of late. In September it revealed that CEO Anders Kristiansen was leaving after it reported that sales and profits had taken a hit in Q1 with revenues down -4.4% to £338.7m and underlying profits down more than -60% to £12.1m.
Veteran chairman Alistair McGeorge was drafted back to the business, which is majority owned by South African investor Brait, as executive chairman in November as it posted a £10.4m underlying operating loss in the first half of its financial year.
McGeorge previously led New Look, which is now majority owned by South African investor Brait, through a period of recovery in 2011. A former CEO of Matalan, he had been executive chairman at New Look from May 2011 to September 2013 then becoming non-executive chairman until 2014 when he left the business.
At the time of his appointment he said: “Today’s results reflect another tough period of trading for the company amid a challenging retail environment on the UK high street. Whilst we’re not anticipating a reversal in fortunes overnight, I am confident we will implement the necessary changes to get the company back on track."
The credit insurers, who provide cover for suppliers against a customer going bust between accepting an order and payment being received, are also said to have been troubled by an accounting scandal at the South African retail giant Steinhoff. Its biggest shareholder is billionaire Christo Wiese, who also holds the largest stake in New Look's majority owner Brait. Wiese resigned from Steinhoff's supervisory board last month when the irregularities were uncovered.
