Credit insurer Euler Hermes has decided to withdraw its provision of credit insurance cover on the buying group.
Bob Wiggins, managing director of Youngsters, said: "This move by Euler Hermes is most unwelcome, unecessary and frankly perplexing. In general, credit insurers have been most supportive of our plans and actions to place the Youngsters Group on a stronger financial footing, so this flies in the face of that.
"The logic of Euler's decision is somewhat unclear, however, I believe that their desire to limit their exposure to all retail sectors and in particular toy retail, during the current period of economic uncertainty was a major factor."
The company says less than ten of its suppliers use Euler Hermes, but it does include some majors. It says it is in ongoing dialogue with them.
Wiggins added: "Some of the other credit insurers have informed us that they are limiting cover until we meet with them so that they can satisfy themselves that cover should be reinstated. It is expected that these meetings will take place within the next week. This action by Euler Hermes is annoying since it is likely to cause concern to our members and suppliers, however, we shall work through it and keep them all informed and involved."