More textile cuts loom

A fraying market for lace could force Courtaulds Textiles to cut more of its workforce in Britain and America. The company has already lost 700 jobs in the UK and 100 in the US since the beginning of the year.

The heart of the problem, which prompted a second profits warning in five months last Wednesday, is destocking of lace by manufacturers and retailers. Another hot summer like last year's would undermine autumn sales and could accelerate the company's rationalisation.

"If, after destocking, the US market reveals it has a long-term structural problem, then we will have to take a fresh look at operations," said Noel Jervis, the company's chief executive.

Courtaulds plans to push more clothing manufacturing offshore to places such as Asia and North Africa, where pay rates are lower, jeopardising some of the 15,500 UK-based jobs. One of the company's four US plants, which employs 1,350, could also close if market conditions do not improve.

Mr Jervis is pinning his hopes on an upswing in sales. "With some growth in the market place we would hope to add jobs overseas without an equivalent loss of jobs here," he said. "UK productivity is increasing, but we will have to respond to reality by moving production capacity to low wage cost areas."

Profits from lace in the UK are expected to be pounds 1m lower than they were at the half-way mark last year, while US sales are running 30 per cent below a year ago.

Courtaulds now expects its US division to incur a small first-half loss. Last year, it generated interim profits of pounds 4.4m.

"Margins from UK operations will be poor," predicted NatWest analyst Joan D'Olier, who has trimmed her 1996 profits forecast from pounds 47m to pounds 38m.

"The fashion market in the US has moved from lace to smoother stretch fabric styles where margins are lower," she said.

"Manufacturers can't pass on cost increases to retailers and are still coping with higher raw material costs."

Start your day with The Independent, sign up for daily news emails
News
ebooksAn unforgettable anthology of contemporary reportage
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Digital Optimisation Executive - Marketing

£30000 - £35000 per annum: Recruitment Genius: The UK's fastest growing, multi...

Recruitment Genius: Financial Reporting Manager

£70000 - £90000 per annum: Recruitment Genius: A Financial Reporting Manager i...

Recruitment Genius: Payments Operations Assistant

£23000 - £25000 per annum: Recruitment Genius: They win lots of awards for the...

Recruitment Genius: Telephone Debt Negotiator

£13500 - £20000 per annum: Recruitment Genius: This nationwide enforcement com...

Day In a Page

On your feet! Spending at least two hours a day standing reduces the risk of heart attacks, cancer and diabetes, according to new research

On your feet!

Spending half the day standing 'reduces risk of heart attacks and cancer'
Liverpool close in on Milner signing

Liverpool close in on Milner signing

Reds baulk at Christian Benteke £32.5m release clause
With scores of surgeries closing, what hope is there for the David Cameron's promise of 5,000 more GPs and a 24/7 NHS?

The big NHS question

Why are there so few new GPs when so many want to study medicine?
Big knickers are back: Thongs ain't what they used to be

Thongs ain't what they used to be

Big knickers are back
Thurston Moore interview

Thurston Moore interview

On living in London, Sonic Youth and musical memoirs
In full bloom

In full bloom

Floral print womenswear
From leading man to Elephant Man, Bradley Cooper is terrific

From leading man to Elephant Man

Bradley Cooper is terrific
In this the person to restore our trust in the banks?

In this the person to restore our trust in the banks?

Dame Colette Bowe - interview
When do the creative juices dry up?

When do the creative juices dry up?

David Lodge thinks he knows
The 'Cher moment' happening across fashion just now

Fashion's Cher moment

Ageing beauty will always be more classy than all that booty
Thousands of teenage girls enduring debilitating illnesses after routine school cancer vaccination

Health fears over school cancer jab

Shock new Freedom of Information figures show how thousands of girls have suffered serious symptoms after routine HPV injection
Fifa President Sepp Blatter warns his opponents: 'I forgive everyone, but I don't forget'

'I forgive everyone, but I don't forget'

Fifa president Sepp Blatter issues defiant warning to opponents
Extreme summer temperatures will soon cause deaths of up to 1,700 more Britons a year, says government report

Weather warning

Extreme summer temperatures will soon cause deaths of up to 1,700 more Britons a year, says government report
LSD: Speaking to volunteer users of the drug as trials get underway to see if it cures depression and addiction

High hopes for LSD

Meet the volunteer users helping to see if it cures depression and addiction
German soldier who died fighting for UK in Battle of Waterloo should be removed from museum display and given dignified funeral, say historians

Saving Private Brandt

A Belgian museum's display of the skeleton of a soldier killed at Waterloo prompts calls for him to be given a dignified funeral