LOSING THE THREAD; Textile Industry Counts Cost of the M&S F Actor
Byline: TEENA LYONS
THE seemingly terminal decline of Britain's textiles industry was underlined last week by the [pounds sterling]104 million takeover offer for Wonderbra maker Courtaulds Textiles by America's Sara Lee.
Once the market leader in a British industry that led the world, Courtaulds seems to have few friends in the City, where many analysts are urging shareholders to take the money and run.
Like much of the the car, motorcycle and machine tools industries, textiles is regarded as a sunset sector by investors who now appear to care only about technology and internet stocks.
The total value of textile companies on the London stock market is about [pounds sterling]750 million. By contrast, internet service provider Free-serve has a market capitalisation of [pounds sterling]7.4 billion, though it has yet to make a profit.
This decline also has a severe human cost. The industry now employs just 300,000 - less than half the number of a decade ago.
Last week Coats Viyella Clothing announced the closure of its Doncaster plant with the loss of 200 jobs. It blamed falling sales.
That news came just days after Scottish knitwear specialist Pringle was forced to slash 140 jobs in the Borders town of Hawick after parent company Dawson International sold the brand to Fang Brothers Knitting of Hong Kong.
But according to manufacturing unions, these cuts are only the tip of the iceberg. Peter Booth, national secretary at the T&G Textiles Trade Group, says that 25,000 more workers face redundancy this year despite the loss of 40,000 clothing makers' jobs last year.
'The industry is in freefall,' he says. 'It would still have a future given the right approach and the right level of investment, but sadly there has been a total lack of support for clothing workers.
'All the big players like Dawson,
Coats Viyella and Courtaulds have been restructuring to move manufacturing abroad for five years, but they are still having problems.
'Much of the malaise has been caused by the high value of sterling, but Marks & Spencer has played a big part in the problems we are seeing at the moment.' The plight of clothing workers was highlighted after M&S, stunned by a 50% drop in profits, embarked on a radical cost-cutting strategy last year.
An integral part of its plans was a decision to move up to 70% of its manufacturing abroad. It sacked three suppliers, including William Baird, a key partner for 30 years and now facing the prospect of axing most of its 4,500 workers at factories across the UK.
While Baird reeled, M&S chief executive Peter Salsbury let other manufacturers know that he wanted to switch production to cheaper factories in North Africa and the Far East.
Until 1980 the store chain prided itself on buying 90% of its goods in the UK and even a year ago it still handled 25% of Britain's textiles output.
Today it remains the biggest supporter of the industry …
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Publication information: Article title: LOSING THE THREAD; Textile Industry Counts Cost of the M&S F Actor. Contributors: Not available. Newspaper title: The Mail on Sunday (London, England). Publication date: February 20, 2000. Page number: 72. © 2009 Solo Syndication Limited. COPYRIGHT 2000 Gale Group.
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