UK retailers reassure investors amid Silicon Valley Bank collapse

UK retailers THG, Moonpig, and Naked Wines have moved to reassure investors of their financial security following the collapse of US-based Silicon Valley Bank (SVB) last Friday (10 March).

The news comes after SVB was shut down by US regulators on Friday, with its UK arm thought to have around 3,000 business customers.

As such, a number have moved to allay fears of the impact on business in order to reassure investors.

Online beauty retailer THG has released a statement in which it confirmed that it “does not have any exposure to SVB, either in relation to cash deposits or debt facilities”.

Meanwhile, greetings card retailer Moonpig also revealed it has no material exposure to SVB UK. It said it has no cash on deposit with SVB UK and does not hold a bank account with them.

Instead, SVB UK is one of 10 lenders that provide senior debt facilities to the group as part of a “strong banking syndicate”.

The group said it has “significant liquidity headroom” with utilised and available facilities together totalling £242m, which are committed until 8 December 2025. This excludes the £13m undrawn portion of SVB UK’s commitment.

In addition, UK wine retailer Naked Wines also confirmed that no loss is expected to the group resulting from the SVB collapse. It revealed that as of Friday 10 March, the group had gross cash on hand of £32m.

Of that, it said its contractual assessment to date shows it had less than £0.6m of cash which it considered, prior to the US Treasury Announcement referenced below, to “be at risk and potentially uninsured due to the closure of SVB”.

Some £14m is held in a cash sweep account under which SVB acts as custodian for 3rd party money market funds. Naked Wines said these contract terms of this account state that these funds are held by SVB as agent and that in the event of a failure of the bank the group’s ownership interest “should be recognised”.

As a result the group should be entitled to a return in full of those funds after completing any procedures required by the FDIC.

Nick Devlin, group chief executive, said: “We are announcing today that day to day operations are unaffected and we don’t expect to incur any loss as a result.

“Whilst this situation remains fluid, we maintain a robust balance sheet with approximately £185m of stock and £17m of immediately accessible cash. We remain focussed on delivering for our customers and winemakers and continuing to execute against the pivot to profit strategy announced in October.”