Insurer snubs House of Fraser

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The Independent Online

Britain's biggest credit insurer is refusing to cover suppliers to House of Fraser amid concerns about the company's performance.

Atradius is steadfastly refusing to underwrite policies for the retailer's suppliers, even as it increases cover to the wider sector, which is seeing its fortunes improve.

Sources close to the retailer, which is 10 per cent-owned by the Scottish entrepreneur Sir Tom Hunter, claim that some other credit insurers are looking to increase their cover.

House of Fraser asked its banks last week to relax lending terms to give it greater freedom to buy back stock. The banks are expected to give their approval to the debt restructuring following a strong Christmas trading performance.

Accounts recently released by Highland Group Holdings, the parent of House of Fraser, show the firm lost £61.5m in the year to 24 January 2009. However, the operating profit for the House of Fraser business last year is expected to come in at around £70m.

A spokesman for House of Fraser confirmed that Atradius did not currently provide cover to suppliers of the business. "Several months ago Atradius withdrew its insurance cover to a number of our suppliers," said a spokesman. "To date we have not lost a single supplier due to their actions and it has had no impact on the performance of our business."

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