DEBENHAMS is under further pressure after reports that credit insurers had reduced cover to its suppliers.

Euler Hermes is among those to have pulled some of the insurance, while Atradius and Coface had refused to cover new shipments, according to the Sunday Times.

Shares in Debenhams, which has issued three profit warnings this year, fell after the latest news.

Credit insurance protects suppliers against the risks of a customer going bust between accepting an order and payment being made.

If the cover is cut or withdrawn, suppliers tend to demand payment upfront, straining the retailer’s ability to stock stores.

A spokesman for Debenhams said: “Debenhams has a healthy balance sheet and cash position. All the credit insurers continue to provide cover to our suppliers and we maintain a constructive relationship with them.

"It is well-documented that market conditions are challenging, but Debenhams continues to be profitable, has a clear strategy in place and is taking decisive actions to strengthen the business.”

Debenhams’ Bournemouth branch is one of the town’s three big department stores. Its House of Fraser is already due to close next year.