Joules troubles deepen as credit insurer pulls cover
Struggling Joules has been dealt a fresh blow as major credit insurer Allianz Trade (formerly Euler Hermes) has pulled cover for its suppliers, according to a report.
The news was published in The Sunday Times, which said it means further doubt around the likelihood of Next taking a stake in the business, a deal seen as a rescue lifeline for Joules.
Credit insurance is key as it protects suppliers in case their customers go under before they get paid for an order. Without it, they’re basically operating on trust and the hope that the customer survives. The alternative is to demand payment upfront, which would place heavy pressure on Joules’ cash flow ahead of the key Christmas selling season.
Joules has struggled for some time with a number of issues both external and internal, but reports that Next was in talks about buying a stake in the firm seemed to be the best news around the firm in some time.
However, a later report suggested Next was cooling on the idea as Joules’ share price fell below the price it was expected to pay for the stake. Yet Joules insisted last week that “positive discussions” are continuing.
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