Tom Danson, Managing Director, PIB’s Trade Credit and Surety Division, shares insight into what went wrong for SRG and how the credit insurance market is protecting its customers against this event.
With a turnover of £578.6 million in 2021 and having seen sales and profits soar during the pandemic, Studio Retail Group called in the administrators on 14thFebruary 2022 after failing to source a £25m funding loan.
Tom commented: “With many businesses having significant outstanding balances on Studio Retail Group, credit insurers were writing considerable cover on SRG, meaning some creditors will be protected against a loss and will get paid the money they are owed.”
Why is Trade Credit Insurance important to businesses?
Trade Credit Insurance repays you in the event of non-payment of invoices for goods or services. Replacing crucial lost capital on your balance sheet, a credit insurance policy gives you access to a wealth of quality financial information.
Complementing your credit management, the insurance policy can be integrated into your finance and sales functions enabling you to make smarter decisions and focus on business growth.
Tom continued: “Studio Retail Group’s inability to secure additional working capital meant it was unable to continue to trade whilst it sells on the surplus stock which had built up over the Christmas trading period due to the supply chain crisis.
This latest high-profile administration continues to prove that no business is ‘too big to fail’, and that businesses must consider the impact of lost capital on the balance sheet.”
Trade Credit Insurance is more important than ever. PIB’s team of credit insurance specialists has significant experience supporting clients in mitigating credit risk and enhancing working capital. If you would like to understand more about how PIB Insurance Brokers can manage your credit risk and support growth, please contact Tom Danson, Managing Director, Trade Credit and Surety Division, T: 07394 565 870.22.02.2022 PIB0157