// Joules and Asos both take hits to the business as retailers in the UK struggle amid soaring inflation and shifting shopping habits
// Joules is set to make a significant loss in the first half of the year after sales plunged
Following profit warnings and poor sales, Joules has confirmed that it is continuing discussions with Next over a £15m rescue deal, but the Sunday Times has reported that last week, leading credit insurer Allianz Trade, formerly Euler Hermes, pulled cover for suppliers to the struggling British lifestyle retailer.
The withdrawal of credit insurance, which protects suppliers against customers going bust between accepting an order and being paid, often prompts suppliers to demand money upfront, squeezing retailers’ cash flow.
The removal of insurance could jeopardise a rescue deal with Next, but Joules have said “positive” talks will continue.
Meanwhile, Asos has also indicated to analysts that sales in the coming year were likely to fall below consensus forecasts for 9.8% growth, leading one analyst to say they were “slightly uneasy” at the way it was managing expectations.
A source close to Asos said pre-close calls were routine and no non-public information was shared.
The online fashion giant issued a profit warning in June, blaming inflation and more shoppers returning items. While boss Matt Dunn warned of ‘a change in consumer sentiment’.
However, the online retailer said that its supply chain operation “is functioning well against the backdrop of unprecedented global disruption in our markets”.
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