Dawson's United Brands factory in Arbroath will also close, but its 40 workers will transfer to the Pringle factory in the town.
Nick Kuenssberg, chief executive of Dawson Premier Brands, said the move was a positive one for Dawson and its shareholders, although he acknowledged that it was 'a disaster for Dumfries'.
The reorganisation would 'provide the opportunity to create a flexible, well-balanced production base, a focused management structure, facilities for the concentration of further advanced technology investment and a platform for the sustained growth of the branded knitwear business'.
He said that the plants to close had own-brand business and that Dawson did not really want to compete in that low-margin arena in the long run.
He stressed that the restructuring did not indicate any problems with current trading. 'It's not the recession - even if we were trading 10 per cent higher than we are, it wouldn't change the decision. The level of investment in new equipment we would have to make at these two plants could not be justified in terms of their productivity. It makes more sense to have less sites with better investment.'
He said that Dawson would invest pounds 2m- pounds 3m a year in Pringle and pounds 1m in United Brands.
The company decided last year that some restructuring was necessary and provided pounds 3.6m in its accounts to 28 March this year, Mr Kuenssberg said. There would be a further non-cash write-off of pounds 1m because of the reduced value of the Dumfries site.
Dawson made pre-tax profits of pounds 30.1m in the last financial year, and orders for autumn had been 'reasonable'.
Dawson shares were steady at 261p.Reuse content