Buying Polo-Shirts on Credit?

Wednesday 29th of April 2009 03:52:06 PM

Buying Polo-Shirts on Credit?

Are you a retailer buying your polo shirts on credit? You are not alone, but you are certainly in a smaller crowd. Retailers in the UK have reported that the lack of trade credit insurance has impacted their ability to stay financially viable through the recession. The British Retail Consortium issued a report called the “Credit Conditions Survey”, and it unveils some of the problems retailers are having in a difficult economy.

The credit insurance covers suppliers selling on credit to the retailers. With the recession has come an inability to accurately assess financial conditions of companies and that has led to less insurance. The insurance companies are either withdrawing or lowering the amount of trade credit insurance leaving retailers in a position where suppliers are demanding up-front cash payments. This is a problem that is made worse by the fact cash flow is down in most retailers.

The net result of lowered trade credit insurance levels is many retailers are having to divert cash to suppliers or are unable to get bank loans to cover purchases. The British Retail Consortium believes the UK government should provide the necessary guarantees to insurers so retailers can continue to function. The director of the Consortium, Stephen Robertson, said, “For retailers to survive and keep people in work they need to keep shelves stocked with the goods customers want. In these uncertain times, it’s even more important suppliers have the confidence that trade credit insurance brings. Cover must remain available.” He continued on to say, “UK retailing employs more people than the whole of manufacturing and is every bit as deserving of support.” The Consortium feels it is simply asking the government to help retailers weather the recession by insuring they can keep buying those polo-shirts, t-shirts, and all other clothing, on credit.