Credit noose tightens on PC World, Currys and Comet

Reduction of credit insurance for leading tech retailers could pave way for turmoil
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The UK’s leading technology retailers, including PC World, Currys and Comet, could be facing an unprecedented stock crisis as insurers reduce credit – fuelling ongoing concerns following the collapse of fellow High Street retailer Woolworths late last year.

PC Retail understands that three credit insurers have dramatically reduced credit –- or even blanket refused it – for video games at Comet and DSGi retailers, which has made publishers reluctant to sell into the stores at all. If this trend is replicated in the hardware sector it has the potential to totally cripple the largest technology outlets in the UK.

When contacted, both DSGi and Comet played down the potential damage to their businesses.

 “As everyone is aware, credit insurers have been reviewing the level of insurance provided to suppliers across a number of industries, including retail, this is not a DSGi-specific issue,” said a spokesperson for DSGi.

“As market leaders, we are an important route to consumers for our suppliers’ products and we have seen no change in our overall terms with our suppliers.”

Comet added: “Like a large number of companies we have been a part of the widespread review of insurance levels provided to suppliers by some credit insurers. However, we have seen no change in our overall terms with suppliers and it has had no material impact on our business.”

Meanwhile, following an executive restructure, DSGi is looking to roll out the revamped design across its whole retail portfolio, after the recent 2008 financials highlighted a 15-25 per cent trade increase in refitted stores compared to standard sites.

With regards to the future, the firm remains bullish. “DSGi went into the recession with a plan to transform the business for our customers,” continued the spokesperson.

“We will emerge offering an unbeatable combination of value, choice and service,” they concluded.

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