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February 20, 2013 10:50 pm
More than 400 jobs in East Devon are in jeopardy after Axminster Carpets, the 250-year-old maker of tufted floor coverings that counts John Lewis Partnership and Carpetright among its biggest customers, filed an intention to appoint administrators.
The company, which is one of the last rug manufacturers in Britain to use traditional weaving looms, waved the white flag on Wednesday following a period of prolonged difficulty.
It said that the notice had been filed to freeze creditor claims and give the company time to work through possible rescues. The group, whose wares furnish Clarence House, the home of the Prince of Wales, intends to appoint administrators from Duff & Phelps.
Joshua Dutfield, Axminster group managing director, said: “Trading has been difficult and the management has been working with key suppliers, creditors and the lenders in an attempt to resolve the company’s financial difficulties. We continue to be committed to working to achieve the best possible outcome for all concerned and most importantly the staff and suppliers.”
Exports have suffered during the recession and the group has been hit by rising commodity prices. Companies House filings lodged on February 17 show that although sales were static in the year to December 2010 and group operating profits had recovered to £604,000, against a loss of £419,000 in 2009, Axminster Carpets Holdings made a loss before tax of £1.37m that year.
Meanwhile, about £11.8m was owed to short-term creditors. Bank borrowings amounted to £10.8m, against assets of £19m while the interest on loans was £371,000. In 2011 the group negotiated new banking arrangements and loans secured against specific properties.
The value of the group pension scheme was about £45m, representing about 71 per cent of benefits accrued by members of the scheme.
Analysts said that Axminster had failed to keep abreast of changing consumer tastes and had fallen victim to the slowdown in householders moving to new homes and to the squeeze on spending, particularly on expensive household furnishings.
Victoria Carpets, a former rival of the Devon company, gave up manufacturing Axminster rugs in 2005, saying British householders no longer wanted heavily patterned carpets that take hours to make and can last 25 years. After 50 years making the carpets, it said the division had become unprofitable in the face of competition from Asia and eastern Europe.
Axminster carpets was founded in 1755 by the cloth weaver Thomas Whitty.
The name Axminster survives as a generic term for machine-made carpets whose pile is produced by techniques similar to those used in making velvet or chenille.
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