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Insurer withdraws cover for JJB

News that a credit insurer has withdrawn cover for JJB has sent the shares into something of a tailspin after a disastrous couple of weeks for the UK giant. The move could have a serious affect on JJB's ability to trade normally as the cover in question relates to suppliers and ensures that suppliers will get paid in the event that the customer was to endure financial troubles. So what next for JJB?

While the withdrawal of cover by Coface is not the end of the road for JJB it may well see suppliers asking for better terms, quicker payment for goods or even refuse to supply the group. It will be interesting to see how the group responds to this blow because not only could it affect the profitability of the group but it could put serious pressure on the company's cash flow.

The future looks very uncertain for David Whelan's baby although he did manage to sell a 29% stake in the group last year for around £200 million. However, he still retains a substantial stake in the business which he foundered and nursed as a young man. Will he see his pride and joy wrecked by the credit crunch or can he pull this one back from the fire?

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