Speaking exclusively to MCV in a candid interview, EUK managing director Steve Lewis admitted that credit insurers refusing cover to the firm had dealt it a major blow.
But he dismissed any prospect of suppliers bypassing EUK to sell direct to its retail partners in the lead-up to Christmas.
“The message I’ve clearly given suppliers is that we expect to handle our full intake of product in the next few weeks,” said Lewis. “Around 90 to 95 per cent of our suppliers understand that and have been very supportive. As always, we are still in negotiations with one or two.”
Those ‘one or two’ may still be demanding cash payment for product, but Lewis said that after frantic negotiation, EUK had reached an agreement for “some level of credit” with “pretty much all of our suppliers”.
He also rejected any possibility of a dramatic buyout by Asda, telling MCV that an acquisition of EUK by either a supplier or a retailer was “an impossibility”.
In addition, Lewis spoke frankly about Asda’s decision to arrange a direct buying relationship with 15 entertainment suppliers as a contingency plan, as revealed by MCVUK.com this week (Newsflash, 06/10).
“I’ve spoken to Asda at length about that – and if I was in their position, I’d do the same,” he said. “The reason I’m comfortable with them doing that is that I’m certain they will not need to call on it.”
Lewis confirmed that Asda may have given the firm financial assistance to maintain good relations with publishers – but dismissed the ‘£15 million loan’ figure reported in some trade press.