Credit insurers threaten to walk away from Hunter's Office

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The Independent Online

Credit insurers are considering withdrawing cover to the suppliers of Office, the shoe chain backed by Sir Tom Hunter, following the collapse of his USC fashion group into administration and the subsequent pre-pack repurchase by the Scottish billionaire.

Office was bought by Sir Tom's West Coast Capital group in 2003 and has more than 60 shops across the country. But sources at leading credit insurers are warning that they are considering withdrawal of cover after being "caught out" by the collapse of USC in December.

One credit insurer said: "First there was Gadgetshop which was backed by Sir Tom Hunter and we've just had USC, which in my opinion was the poorest of pre-packs. Putting it into admin to dump suppliers, landlords and other creditors, and then buying back three-quarters of it, left a very nasty taste. So of course we are looking at cover given to suppliers to his companies, including Office."

After Gadgetshop went into administration in 2004, the collapse sparked a legal battle when Jon Wood, the former UBS trader and now at SRM, the hedge fund, sought multi-million- pound damages from Sir Tom and his business partner in the group, Chris Gorman.

An Office spokesman recently reported that the chain was "doing remarkably well and delivering like-for-like sales growth". According to the latest accounts of Office Holdings, the shoe chain posted a pre-tax profit for the year to the end of January 2008 of £4.3m.

Meanwhile, USC is facing a possible revolt from a number of suppliers that are believed to have lost "considerable sums of money" in the wake of the company's collapse and subsequent re-emergence.

It is thought that a number of leading brand suppliers are demanding upfront payment on goods before delivery to USC.

A spokesman for Sir Tom Hunter said: "We have excellent relationships with our suppliers and indeed have received no complaints from any of our suppliers. If any supplier has a complaint, we will happily sit down with them and find a solution. Negotiation via the media has never in our experience worked quite as well as a face-to-face meeting."

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