19 February 2025
When a major retailer collapses, the impact on suppliers can be devastating. Homebase’s recent administration is a stark example, with over £650 million owed to unsecured creditors, including AO World and Halfords. Without protection, suppliers risk being left with unpaid invoices that can seriously affect their own financial stability.
By contrast, suppliers to ASOS are benefiting significantly from Trade Credit Insurance, which is safeguarding their payments, even during periods of financial uncertainty. This article explores how ASOS’ suppliers are being protected, and how similar measures could have mitigated losses for Homebase’s creditors.
The Financial Fallout from Homebase’s Collapse
Homebase’s administration late last year left a long list of suppliers and service providers facing heavy losses. According to filings at Companies House, the retailer owes:
- £100 million to trade creditors
- £2.9 million to Close Brothers for till systems
- £1.7 million to XPO for logistics services
- £750,000 to AO World for kitchen appliances
With unsecured creditors ranking low in the repayment order, many of these businesses are unlikely to recover their full amounts, if anything at all if they didn’t have Trade Credit Insurance in place. For uninsured suppliers that relied on Homebase for a steady stream of income, these bad debts could create significant cash flow issues, limit future investment, and even threaten their own survival.
How Trade Credit Insurance is Protecting ASOS’ Suppliers
In contrast, suppliers to ASOS are benefiting from Trade Credit Insurance, which ensures they still get paid even if the retailer experiences financial difficulties. Over the past year, ASOS faced concerns over declining profits, leading some insurers to withdraw cover. However, in January 2024, major credit insurers Atradius and Coface reinstated their cover for ASOS’ clothing suppliers, signalling renewed confidence in the business.
Additionally, Cartan Trade has now offered cover for ASOS suppliers for the first time, providing even more protection. The return of multiple insurers is a positive sign for suppliers, allowing them to continue trading with ASOS with greater security.
Thanks to Trade Credit Insurance, ASOS’ suppliers benefit from:
- Protection Against Non-Payment – If ASOS were unable to pay, insured suppliers would still receive payment through their insurance policy.
- Stronger Cash Flow – Guaranteed payments mean suppliers don’t have to deal with unexpected financial shortfalls.
- Confidence to Trade – With insurance in place, suppliers can continue doing business with ASOS without worrying about potential defaults.
- Access to Financing – Insured invoices can be used as security when seeking loans or funding, helping suppliers grow their businesses.
Homebase’s collapse highlights the risks of trading without protection. Without Trade Credit Insurance, suppliers were left exposed to significant financial losses, which could have been avoided.
Conclusion
The experiences of ASOS’ suppliers and Homebase’s creditors highlight the importance of Trade Credit Insurance in protecting businesses from the financial risks of unpaid debts. While ASOS’ suppliers have benefited from the return of insurer confidence, those who supplied to Homebase now face uncertainty.
For any business that trades on credit terms, ensuring invoices are protected can be the difference between financial stability and significant loss. As the retail landscape remains unpredictable, suppliers should consider Trade Credit Insurance as an essential tool to safeguard their business and maintain confidence in their trading relationships.