by OUR BUSINESS EDITOR
The starkly contrasting fortunes of two of the leading Scottish luxury knitwear brands which made Hawick-produced cashmere sweaters famous across the world during the Twentieth Century are revealed in the latest financial reports from Pringle of Scotland and Barrie Knitwear.
While Barrie, owned by the Chanel fashion house saw its turnover grow by an impressive 21 per cent in 2023, and its workforce increased to 280, Pringle - now in the same stable as Moss Bros - suffered a 34 per cent decrease in income while staff numbers now total a mere 14, including the company's three directors.
At one time, both businesses were owned by Dawson International, the global textiles group which provided the Scottish Borders with thousands of jobs and considerable economic prosperity.
But after Dawson's financial collapse, the Pringle name was sold to the Chinese-based Fang family for £6 million. And following the liquidation of Dawson's, Chanel acquired Barrie in 2012 in a deal which safeguarded the jobs of the firm's 176 workers in Hawick.
As we reported, Pringle of Scotland was subsequently acquired for £10 million last year by a group called Broadgate 1960 Ltd. without any public statement being made. The ultimate parent company, according to the latest filing at Companies House, is Three Wishes Ltd., a business incorporated in Hong Kong and controlled by Dominican national Menoshi Shina.
But in its first financial report since the takeover, Pringle reports that turnover in the 11 months to December 2023 was £2.669 million, down from £4.045 million in 2022. The firm's gross profit is given as £1.985 million, down from £2.767 million in the previous 12 months under the Fang regime.
Even ten years ago Pringle of Scotland employed over 60 workers although that was a pittance compared to the several thousand on the payroll between the 1940s and 1960s.
The 2023 accounts include this reassuring paragraph under the heading Going Concern: "After making enquiries of Broadgate 1960 Ltd and its fellow subsidiary Crew Clothing Ltd who are companies under common control, the directors have no reason to believe that a material uncertainty exists that may cast significant doubt about the ability of the company to continue as a going concern.
"The directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future".
The fairly downbeat figures from Pringle's are at odds with the very positive returns from Barrie - turnover up from £25.636 million in 2022 to £31.069 million last year. Gross profit of £8.599 million is similar to the previous year's figure of £8.264 million.
According to a strategic report from managing director Jan Young: "Turnover increased by £5.433 million due to continued strong demand from the luxury market and very good performance from everyone to consistently develop and deliver pieces in a tight timeframe".
Gross profit margins fell to 28 per cent from 32 per cent due to increased material costs, sub-contracting costs and investment in training of direct labour. Operating profit also fell due to planned expenditure on recruitment, training and consultancy support for business improvement projects.
It is made clear in the report that if Barrie required assistance to meet its financial obligations, Chanel UK would be able to provide that support, if needed.
In the eleven years since Chanel bought Barrie for an undisclosed sum, the workforce has increased from 182 in 2013 to 261 in 2022 and 280 last year. The company's annual bill for wages and salaries now totals £9.409 million.
During 2023, Barrie took out two new leases to establish production facilities in Galashiels and Leicester, adding to their other manufacturing centres in Hawick and Arbroath.
Several years ago the business made a £2 million loan to a company in Mongolia who Barrie is working with to establish an improved supply chain for cashmere fibre.
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