In this edition:
Carpetright called in Administrators PwC, resulting in the closure of the head office, 54 store closures, and 1,018 job losses. Rivals, Tapi, purchased the Carpetright name, two warehouses, and 54 stores, saving 300 jobs. Carpetright struggled with increased competition and a slowdown in demand. Tapi said that "saving the entire business was unviable as Carpetright had been materially loss-making for a number of years and it had significant debt owed by the owner". Tapi was founded in 2014 by Martin Harris, the son of Lord Harris, the original owner of Carpetright, who is also a shareholder in Tapi.
A recent publication from Allianz Trade examines the outlook for the world economy, including the likely impact of a Labour victory in the UK elections, a possible Trump victory in the U.S., as well as the possible outcomes of the French elections. Overall, Allianz Trade expects global growth of 2.8% in 2024 and 2025. Inflation is expected to come down slower than previously expected. As a result, Allianz Trade expect global insolvencies to rise to 10% in 2024 and remain high in 2025.
In a recent report on the construction sector, Tokio Marine HCC sees an improved outlook for the sector, but credit risk remains high. After seeing construction material price increases of 23% in the 12 to July 22, prices fell by 3.1% in the year to April 24. The incoming UK government promises to build 1.5 million homes in the next five years and is planning significant investment in green technology and infrastructure. While trade bodies have reacted positively, there remains uncertainty around how these projects will be financed. Insolvencies in the sector have been increasing for the last three years and are the highest since the 2009 financial crisis.
The International Credit Insurance & Surety Association has published its annual report for 2023. The members stated that while demand for protection in the face of economic headwinds understandably grew throughout 2023 for both trade credit insurance and surety markets, surety exposure rose by 7.7% to EUR 1.4 trillion, while trade credit insurance exposure reached EUR 3.2 trillion, a 4.5% increase. While trade continues to drive economic development, managing associated risks and financing costs is increasingly challenging. ICISA members expect challenging market conditions to persist in the short term.
Bondaval, backed by Great American International Insurance, has launched a new credit insurance product in the UK offering non-cancellable cover and an indemnity of up to 100%. The policy is accessed via the Bondaval Platform.
As insolvencies reach a 15-year high, the importance of trade credit insurance (TCI) in managing financial risks has never been clearer. Discover how the food and drink sector is leveraging trade credit insurance to navigate these challenges and gain a competitive edge.
There were *6,544 (seasonally adjusted) insolvencies in England and Wales in the second quarter of 2024. This was an increase of 14% compared to the previous quarter and by 3% compared to the same period last year.
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