Littlewoods look: Trinny and Susanna (RIGHT), the faces of Littlewoods. Its credit interest rates have hit 39.9% here

LITTLEWOODS, the mail order retailer owned by the reclusive billionaire Barclay brothers, has increased its credit interest rates for Irish customers by over 20% due to rising levels of bad debts.

The move means that customers who purchase goods on credit from the company will now face interest rates of 39.9% APR from 21 August compared with the 32.77% APR rate which previously applied. The retailer's Irish turnover is around €40m per year.

A company spokeswoman said the increase was necessary to ensure that Littlewoods' Irish division could continue to offer credit to customers: "The increase is as a result of difficult trading conditions and an increase in bad debt due to the current economic downturn."

Company accounts for Littlewoods' Irish arm indicate it has been having issues with rising bad debts since the start of last year. In the year to April 2008, its margins fell from 58% to 42% as a direct result of credit write-offs.

Littlewoods' parent company, Shop Direct, has been struggling due to the growth of online shopping and the recession. Earlier this year, it sacked over 1,100 warehouse and call centre staff in Britain. Even before the downturn, however, the firm's Irish arm had been experiencing tough trading, making a loss of €10m in 2007.

Littlewoods has been owned by the Barclay brothers since 2003. The identical twins, David and Frederick, also own Britain's Daily Telegraph and recently purchased the Woolworths brand name from the failed retailer's administrators.