Catalogue firm sees 'rise in bad debts'

16/01/2009

Profits are being squeezed at home shopping group N Brown, due to a general rise in debt arrears among customers.

The firm, which provides several shopping catalogues, said that overall profit margins fell by 1.5 per cent over the period covering the end of 2008 to January 10th, despite an 8.8 per cent sales jump.

Charges for so-called "bad debts" rose significantly over the period, with the firm no longer able to sell much of its customer debt on to other companies.

N Brown said that these debt purchasers were now able to buy up potentially more lucrative debts - due to the general financial downturn that has squeezed people's personal finances.

Speaking to the Guardian newspaper, N Brown chief executive Alan White said: "Previously, debt collection agencies were paying a higher rate in the pound - and paying upfront… but they are awash with higher value debt to collect such as mortgage arrears or £2,000 credit card bills."

Tags; Debt Management and Banking, Credit Card Lifestyle,

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