Coface credit cut clobbers Comet

UK high street titan becomes latest big name to be rocked by a reduction in credit insurance cover

Retail electronics giant Comet has become the latest big name to suffer from having its credit insurance scaled back.

The Independent reports that Coface, one of the UK's three biggest credit insurers alongside Euler Hermes and Atradius, confirmed last week it was cutting cover for some of Comet's suppliers. The high street retailer, which is owned by pan-European group Kesa Electricals, has 250 UK stores.

Coface's decision is the latest in a line of credit insurance setbacks to rock the channel and the wider electronics industry this year. Retail group DSGi has also been hit this month as all three of the UK's big credit insurers scaled back its cover. Distributor Bell Micro also suffered in July when Euler Hermes pulled cover for its European operations.

Atradius maintains there have been no changes in the level of cover it provides to Comet and it is not known whether Euler Hermes has changed its stance . A Comet spokeswoman told The Independent: "We have not been informed of any change in the facilities that credit insurers provide to our suppliers. Our cash position remains strong."

After Kesa posted yearly results in June, chief executive Jean-Noël Labroue said: "We are seeing a continuing decline in consumer confidence and we anticipate further difficult trading conditions ahead." For the three months to the end of July, Comet posted an almost 10 per cent dip in like-for-like revenue. After these results, Labroue indicated he expected the UK firm to post a loss for the six months to the 31 October.