Marks and Spencer blamed for textile firm’s demise

A Lurgan textile factory due to close next month with the loss of 140 jobs could have survived if it had not been for Marks and Spencer, it was claimed today.

David Hillcoat, former director of Courtauld’s Textiles Plc, singled out the major retailer for blame for the demise of Penn-Nyla, which produced fabric for its range of leisure wear.

M&S had urged Courtauld’s to keep its garment manufacturing base in the UK, despite the worldwide drift to the Far East and North Africa.

Mr Hillcoat told the Stormont Enterprise Committee that the company should have restructured its business in 1995 rather than begin in 1997 when it was too late.

‘‘Marks and Spencer have accentuated what might have been a normal drift of garment manufacture. For many years they sustained a ‘‘buy British’’ policy but squeezed profitability out of the industry,’’ he said.

When the demand for mid-price garments collapsed, M&S had a complete rethink which led to Courtauld’s closing 85% of its UK capacity, moving to North Africa, Sri Lanka and China.

By last year, the company had closed two sites in Leek and Nottingham, centred its fabric business in Lurgan and attempted to diversify to attract new customers.

‘‘At a time when our major customer was persuading us to stay onshore we should have ignored them and gone offshore. This would have given the Lurgan factory a greater chance to save itself as a service business,’’ he said.

Mr Hillcoat added that it was increasingly unlikely that a buyer would be found in time to save the company.

‘‘We have had various discussions with a number of potential buyers but unfortunately they didn’t want to take on the operation as a going concern.’’

Dara O’Hagan (Sinn Fein, Upper Bann) said that the Courtauld’s factory had been one of the longest established and best paying companies in Lurgan.

She asked if the hostile takeover of the company by US giants Sara Lee in February 2000 had contributed to its fate.

‘‘The feeling was that this global company was buying out Courtauld’s to buy the name and run down the factory.’’

Mr Hillcoat said it was well accepted that Sara Lee’s interest in the company was because of its connection with Marks and Spencer and the UK market in general.

‘‘Sara Lee didn’t want the textile business and they were very quickly put up for sale. They have been on a well-publicised process of breaking up the fabric business and selling it in pieces.’’

But he added that the Penn-Nyla factory would have eventually been forced to close down even if Courtauld’s had not been made a sub-division of Sara Lee.