William Baird supplies menswear, ladieswear and childrenswear to M&S, accounting for 40 per cent of its sales. But its sales to M&S fell by 15 per cent in the six months to June forcing William Baird into a pounds 4m operating loss.
William Baird's chief executive, David Suddens, said he was impressed by the measures taken by M&S to improve its fortunes. But he added that pressure on margins had rendered most of its UK manufacturing capacity "commercially non-viable".
It has so far cut the number of UK factories from 23 to 16 in the last year and warned that the figure would fall to less than 10 over the next few years.
William Baird reported a half-year loss before tax of pounds 13m largely due to one-off charges of pounds 15m related to factory closures.