DSGi squeezed again in Euler retail review

Credit insurer makes another set of deep cuts to cover as suppliers rally round high street giant

Harsh high street: DSGi-owned Currys.digital is among the high street stores being hard hit

DSG International’s (DSGi’s) credit insurance woes deepened last week as Euler Hermes further reduced its exposure to the retail behemoth.

The credit insurer is rapidly slashing cover to some of the high street’s largest names, with DSGi being one of the worst hit, according to insiders.

One broadline distributor confirmed that Euler had last week halved the cover it offers on credit lines into DSGi.

Another claimed that the credit insurer, which is said to underwrite more than half of all credit in the UK channel, had made “deeply significant” cuts to all DSGi supplier lines.

This comes on top of the cut-backs of about 50 per cent that Euler made to DSGi’s cover in January.

Jon Bunyard, general manager of Computacenter Distribution, said the distributor had stopped trading altogether with DSGi at the end of last year after Euler pulled its cover.

“My understanding is that Euler has assessed the risks on the high street and the only successful high street companies right now are games-based companies,” he said. “Euler is continuing to underwrite with them, but is slowly withdrawing from most high street names.”

Euler is believed to be increasingly concerned about the state of DSGi’s balance sheet, but the retailer played down the move, saying it is “not a DSGi-specific issue”.

“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,” the firm said in a statement.

This was backed up by one distribution source, who said he was “doing everything necessary” to maintain the line he has with DSGi.