Would Mulberry have spent £10,281 (0.34%) to protect themselves from a £3 mil loss?

The popular designer brand operates 21 concessions in House of Fraser stores, employs 88 people, and is now facing a massive loss due to the recent fall of the high-street favourite - House of Fraser.

It is currently owed over £3 million by the troubled department store that went into administration earlier this year, before being bought out by Sports Direct owner  Mike Ashley.  Mike Ashley has made it clear that he will not pay creditors for debts incurred before the take over.


Graphic courtesy of Joe Whitwell

With news of Britain's high streets going bust featuring in feeds daily, why are more companies not insuring themselves against such losses as Mulberry is now facing? According to our calculator, it would have cost Mulberry 0.34% to cover themselves from the £3 million punch.  But who is in charge of making these decisions in a £276 million company? In a large company like Mulberry they are likely to have a Credit Control Team but SME's are less likely to have such resources. As usual SME's are the ones left picking up the pieces. 

Have a go at pricing your invoices below, or simply see how we got our protection price for Mulberry Group PLC;

There are several reasons that the UK's High Streets are in crisis, and not all are to do with our online Amazon Prime addictions.

1. Wages and Inflation

Arguably the most noticeable factor for shop owners is the lack of disposable income their customers are choosing to spend on tangible assets. The pound has fallen 15% since Brexit and has pushed inflation over 3% (way over Bank of England's 2% target).  This means wages have been rising at a slower pace than inflation, leaving UK residents with less disposable income.

2. Limited Flexibility in Financial Products

Whilst we have seen consumer insurance move from having car insurance by the day, to now by the literal second you step in and out of a car - the world of business insurance and other products is still stuck in the dark ages.  Most products we see are a 'one fits all' option, with the likes of Coca Cola being offered the same protection cover as Joe's Ice Cream shop around the corner. 

3. Lack of Government Education in Preventative Approaches

Capitalism has evolved from the idea of positive thinking. It distinguished ''capital' from 'wealth' and classifies it as investment in production, in aims of increasing production.  It is no surprise that in this capitalist day and age we are all always thinking the glass is half full and refuting ideas of failure. Talking about insurance products is not seen as 'sexy' or desirable.  It is probably why the industry never gets the same PR as the likes of its fintech counterparts. However, we must change this. The government needs to focus on covering preventative approaches more often, in an aim to educate small business owners and massive corporations alike, about the products at their disposal in order trade safely. 

As a responsible CEO, Insurance should be an everyday priority - not just in hindsight.