Government must offer credit cover or independents will die
Sony UK’s managing director Steve Dowdle has demanded the government help retailers with trade credit insurance or see hundreds of independent shopkeepers out of business, the FT reports
He said the withdrawal of trade was one of the "biggest challenges UK retail has ever faced".
He said hundreds of independent electrical chains, represented by the Radio Electrical and Television Retailers' Association (Retra), could shut up shop if nothing is done to help suppliers cope with the withdrawal of insurance. He is asking the government to provide support by pledging to underwrite some of the risk in the forthcoming Budget.
The FT said talks between the Treasury and the insurance industry continue ahead of the Budget on April 22 and it is not yet clear if agreement will be struck before that date.
"At the moment these credit insurers will suddenly say, 'I have just removed cover.' So the retailer may not get supplied. It then has to run to the bank and ask for more overdraft [to pay for goods on delivery]. The bank will either say no or yes but it will cost you more and so the business goes bust," said Dowdle. "I am seeing retailers go bust who have been run for 25 years and who have paid bills on time and it just goes bang. What is wrong in supporting the retail industry like we do with the car manufacturers?"
Dowdle wants the government to underwrite policies issued by credit insurers.
