NEWS

Poundstretcher owner Crown Crest Group has credit cover cut

Published on: 29th March 2018

Leading insurer Euler Hermes has reduced its cover for suppliers to the discount chain, according to The Sunday Times.

Pound shops have been hit hard by the fall in the value of the pound since the Brexit vote almost two years ago. Poundland encountered its own problems with credit insurance before Christmas, although much of that concern came in the wake of parent company Steinhoff’s accounting scandal. Meanwhile, Poundworld owner TPG is understood to be in the process of drafting in restructuring experts as it seeks to mount a turnaround.

Crown Crest told The Sunday Times that most of its products were bought from the Far East and the open market where Euler Hermes does not cover suppliers, meaning a loss of cover would have minimal impact on the business.

Since the news broke, Poundstretcher has moved to quash rumours that the business could go under.

Finance director Hemant Patel said the discount chain was financially secure – despite the parent company making a loss last year – and was continuing to open new stores.

Poundstretcher employs around 6,000 people in 400 stores nationwide, with around 100 staff at its UK headquarters in Kirby Muxloe.

Hemant commented: “It is tough, but we are financially in a very good position and the banks are really happy with us. We work well within our overdraft facilities at all times and every supplier and creditor is paid on the due date. We are definitely not in the same boat as Toys R Us.”

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