Home / Knowledge / News / Textiles / Extend trade credit Top-Up say retailers

Extend trade credit Top-Up say retailers

21
Oct '09
38 per cent of large retailers and 28 per cent of small and medium-sized ones report the reduction or withdrawal of trade credit insurance has negatively impacted their businesses.

The results are part of the British Retail Consortium's (BRC's) latest Quarterly Credit Conditions Monitor, published today (Tuesday). The vast majority of respondents feel trade credit insurers do not assess risk accurately: 92 per cent of large firms and 74 per cent of SMEs believe this to be the case.

One retailer said credit insurers, "Apply industry-wide criteria to individual companies without looking at specific company circumstances. It is easier for the risk assessors to just repeatedly say 'No cover' rather than argue for the insured company."

In the April Budget the Government announced the introduction of a temporary Trade Credit Insurance Scheme and has since improved some elements of it. But almost all retailers surveyed believe this has not gone far enough. 95 per cent of SMEs and 85 per cent of large retailers responded that the top-up scheme had yet to help their businesses.

To make a real difference the BRC believes eligibility for the top-up scheme cover period must be extended back to 1 April 2008, when insurers started to remove cover as the downturn began. The current cut-off date is 1 October 2008.

The top-up scheme is due to end shortly – on 31 December 2009. 77 per cent of large retailers and 59 per cent of SMEs believe the scheme should be extended beyond this date.

Tom Ironside, BRC Business Environment Director, said: "It's vital to retain trade credit insurance – especially in the important run-up to Christmas period and beyond.
"If trade credit insurance is withdrawn, suppliers demand to be paid upfront. This can cause cash flow problems for retailers, leading them to cut jobs and stock as they divert money to pay suppliers.

"Retailers are far from convinced that insurers accurately assess trade credit risks. The Government must put pressure on these companies to ensure proper research is undertaken so more accurate underwriting decisions are made.

"The Government has made an attempt to help retailers through its top-up scheme. But to make a real difference eligibility, needs to be extended to April 2008 – when the cover started to be withdrawn. The top-up insurance scheme is due to finish at the end of this year and VAT is returning to its higher level at the same time. To prevent the retail recovery and the three million jobs provided by the sector being undermined, the top-up scheme must be retained into 2010."

British Retail Consortium


Must ReadView All

Pic: Shutterstock

Textiles | On 22nd Aug 2019

US-China trade war uncertainty could cost $585 bn by 2021

Uncertainty arising out of the US-China trade conflict could lower...

Pic: Shutterstock

Apparel/Garments | On 22nd Aug 2019

Myanmar's export earnings from CMP garments rise by $1 bn

Myanmar's cut-make-pack garment industry earned over $3.8 billion...

Pic: Shutterstock

Textiles | On 22nd Aug 2019

Cotton prices drop for 10th consecutive week in Brazil

Cotton prices continued to fall in the Brazilian market for the 10th...

Interviews View All

Jurgen Gauger, Spreadshirt

Jurgen Gauger
Spreadshirt

‘Buying crowdsourced or creative designs are much more appealing to the...

Top executives, Textile & apparel bodies

Top executives
Textile & apparel bodies

The decision to reduce GST on MMF yarn to 12% is transformational

Top executives, Textile industry

Top executives
Textile industry

Knowledge sharing platform needed for sustainable water management

Mario Ploner,

Mario Ploner

<div>Italian company Tecnomeccanica Biellese specialises in planning and...

Jash Choraria,

Jash Choraria

Established in 2015 by <b>Jash Choraria</b>, Unifynd is a Mumbai-based...

Awanda Booth,

Awanda Booth

Held every year in New York City, Surtex is a global business-to-business...

Justin Gutierrez, INDA

Justin Gutierrez
INDA

The Association of the Nonwoven Fabrics Industry (INDA) has created a new...

Marcel Alberts, Eurofibers

Marcel Alberts
Eurofibers

Coating at a fibre level is a practice not usually seen in the...

Silke Brand-Kirsch, Schlegel und Partner

Silke Brand-Kirsch
Schlegel und Partner

Silke Brand-Kirsch, executive partner of Schlegel und Partner, a leading...

Amiben Shroff, Shrujan

Amiben Shroff
Shrujan

From its modest beginning in the late 1960s, Shrujan has grown into a...

Chandani Sahi, By Chandani

Chandani Sahi
By Chandani

By Chandani is a womenswear prêt couture brand with fusion silhouettes by...

Judy Frater, Somaiya Kala Vidya

Judy Frater
Somaiya Kala Vidya

Among the many honours showered on Frater, including Fulbright and Ford...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


editorial@fibre2fashion.com

Letter To Editor






(Max. 8000 char.)

Search Companies





SEARCH

Leave your Comments


August 2019

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.

news category


Related Categories:

Advanced Search