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(Sharecast News) - A leading credit insurer has reportedly reduced cover to suppliers of online beauty retailer THG.
According to the Guardian, Allianz Trade, one of the UK's largest credit insurers, cut back cover for suppliers to the retailer, formerly known as the Hut Group, in recent weeks.
Credit insurers have reportedly cut cover to a series of retailers this year, including Asos, AO World and Ted Baker, amid a selloff in shares of tech and online retail stocks.
Credit insurance is used to protect suppliers against the risk of a retailer going bust between the point of accepting an order and payment being made. Suppliers typically ask for upfront payment if cover is not available, which may put a squeeze on the retailer's cashflow.
According to Drapers, last month Allianz Trade cut its cover for fast-fashion retailer Boohoo's suppliers.
It was understood that Allianz informed THG's suppliers of its decision in recent weeks, although it continues to provide cover for them, alongside other credit insurers.
Sources close to THG told the Guardian the reduction in cover was "small" compared with its overall level of credit insurance, reflecting cover that was unused by suppliers and has no bearing on THG's financial position.
