Unions representing more than 1,000 textiles workers in Nottinghamshire are seeking urgent talks with management after Courtaulds, the historic maker of underwear for Marks & Spencer, was offloaded by its US parent.
Sara Lee, the cheesecake-to-bubble bath conglomerate which bought the business in 2000, has handed it to PD Enterprise, a privately owned Hong Kong company with nine factories overseas.
The deal brings to a close a disposal process that has dragged on for more than a year, and Sara Lee is, in effect, paying to have Courtaulds taken off its hands. The business was removed from a parcel of European clothing businesses sold to private equity this year, and the US company has agreed to take over the $483m (£260m) deficit in Courtaulds' defined benefit pension fund. It said: "The corporation will not receive a material amount of consideration as a result of the sale."
PD Enterprise, which makes lingerie, swimwear and pyjamas, is described as leading a consortium of buyers. Unions said they wanted more clarity on the new ownership structure and its plans for the UK business. "There has been a great deal of uncertainty about who the potential buyer would be, so we are glad that is over," a spokesman for the union Community said. "We will seek talks as soon as possible."
Sara Lee paid £150.5m for Courtaulds after a takeover battle in 2000. At the time, the company relied on M&S for 40 per cent of its business and had suffered as shoppers deserted the chain. The UK textile industry was also under pressure from cheaper foreign rivals and burdened by giant pension fund liabilities.
Courtaulds still counts M&S as its most important customer, but also makes own-brand hosiery for Tesco.It employs 600 people in two factories in Nottinghamshire and more than 400 at a head office in the county. There are 70 jobs at a warehouse in Middlesbrough. Courtaulds also has 4,000 employees overseas, sharply down from the 20,000 it employed across 17 countries when Sara Lee bought the business.
Brenda Barnes, the Sara Lee chairman, said. "As we continue to simplify our organisation and focus on growing our core food, beverage and household and body care businesses, we are better positioned to drive long-term, sustainable growth for Sara Lee shareholders."
Sara Lee shares suffered their biggest drop in more than a year in early Wall Street trade, after disappointing profit figures for the first three months of the year. Restructuring costs were higher than expected.Reuse content