Oasis and Warehouse hit by credit insurers’ move

Fashion chains Oasis and Warehouse are under pressure as credit insurers have stopped offering cover to their suppliers, the Standard understands.

A string of credit insurers, including Atradius, Coface and Euler Hermes have decided to withdraw cover to some of Oasis and Warehouse’s suppliers.

A source close to the two companies said the collapse of Coast had triggered concerns over Oasis and Warehouse having a similar fate.

Rival Coast, owned by the same parent company, Aurora Fashions, fell into administration last week, before it was bought in a controversial pre-pack deal by Karen Millen for an undisclosed sum. The process was handled by auditing giant PwC.

Credit insurance protects suppliers against the risk of customers going bust between an order being placed and the payment being made. When insurers stop or withdraw cover, suppliers can demand payment up front, putting pressure on retailers and their coffers.

Yesterday, Oasis and Warehouse boss Liz Evans, who joined Oasis in 2010 after a string of roles at Marks & Spencer, said she was stepping down to join fashion rival Fat Face.

Hash Ladha, who joined Aurora in 2010, stepped up from chief operating officer to chief executive at the brands. Oasis employs 2000 people and Warehouse 1200.

The administration of Coast led to the immediate closure of its 24 stores, including the one in Oxford Street in London, putting 300 jobs at risk.

Karen Millen bought Coast’s website and department stores concessions. Coast and Karen Millen are owned by the failed Icelandic bank Kaupthing.

A spokeswoman for Aurora said: "Credit insurers have tightened cover across the industry. Both Oasis and Warehouse have strong relationships with suppliers and will continue to work closely with them. It is very much business as usual."

Atradius, Coface and Euler Hermes​ declined to comment.

In February, the Oasis and Warehouse group said revenues edged up to £275.2 million from £274.7 million for the year to February 24.