“Higher risk” – that’s the category department stores David Jones and Myer have been classified under by QBE following the insurer’s review of the retail industry.
The Sydney Morning Herald reported that QBE wrote to the retailers’ suppliers to let them know trade credit insurance would be pulled on July 16 on account of the department store sector’s risk profile amid the coronavirus crisis.
“We appreciate this decision comes at a difficult time in the retail calendar and the post-COVID-19 recovery path,” the publication quoted QBE as saying in its letter to policyholders who supply goods to Myer and David Jones.
“However, with our views that operating models and financial structures will need to significantly change in the near term, our concerns are that not all participants will be successful in this regard.”
A Myer representative was cited as describing the coverage withdrawal as “disappointing,” while it’s not clear what David Jones thinks of QBE’s move.