Shares in bombed-out sofa seller ScS Upholstery have sunk further still, following revelations that a credit insurer has withdrawn cover for the company’s suppliers.

Sunderland-headquartered ScS, one of the UK’s largest furniture retailers, with 95 stores, admitted that this withdrawal would affect ‘the working capital facilities of some of our principal suppliers’. The fully listed group is in discussions with these suppliers and assures that it continues to trade with them while it reviews ‘various financing options’.

ScS, which recently reported cash levels of £4.8 million and is known to have a £3 million overdraft facility, has lately experienced exceptionally tough trading, with like-for-like sales order intake down 15 per cent for the first 41 weeks of the financial year.

Shares in the company, which peaked at 558p in early 2006, have subsequently collapsed in the wake of the worsening outlook for consumer spend. Down 53 per cent at 7.5p as the market opened this morning, the shares then rebounded to 10p for a 29 per cent fall by lunchtime.

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