LONDON, July 16 (Reuters) - British department store retailer Debenhams said it had a “healthy” cash position after a media report on Sunday said insurers had cut cover for its suppliers.
The Sunday Times reported that Debenhams, which has issued three profit warnings this year, was facing a cash crunch after credit insurers reduced or refused cover for its suppliers.
Credit insurance protects suppliers against the risk of customers going out of business before payment for goods is made. Suppliers could instead demand upfront payments, putting pressure on a retailer’s cash position.
“Debenhams has a healthy balance sheet and cash position. All the credit insurers continue to provide cover to our suppliers and we maintain a constructive relationship with them,” the retailer said in a statement.
“It is well-documented that market conditions are challenging, but Debenhams continues to be profitable, has a clear strategy in place and is taking decisive actions to strengthen the business.”
Shares in Debenhams, down 66 percent over the last year, closed Friday at 14.7 pence, valuing the business at 181 million pounds ($239.6 million). ($1 = 0.7553 pounds) (Reporting by James Davey; editing by Kate Holton)