Textile sector suffers further body blows

Northern Ireland's badly shaken textile industry suffered another blow last week when Marks & Spencer announced it was to terminate a 30-year supply agreement with William Baird, a Glasgow-based clothing manufacturer.

Baird Clothing employs 2,360 workers in 13 factories across Britain and Northern Ireland. Two plants are located in Co Down, one at Bangor, the other at Newtownards. The two Northern plants and their 500 employees will be particularly hard hit by M & S's announcement as the company has been their sole customer.

Baird's sales to M & S amount to 36 per cent, or some £170 million sterling (€265 million), of the manufacturer's total turnover.

M & S's decision to cut its links with its fourth-largest supplier appeared to come as a complete shock to Bairds whose chief executive, Mr David Suddens, described it as a "bolt from the blue". Yet over the past 18 months, the company already had to shut seven plants with the loss of 2,000 jobs as a result of M & S's difficulties and was well aware that M & S was in the process of carrying out a strategic review aimed at cutting costs by reducing its supplier base. While M & S's announcement might have come as a surprise to Northern Ireland's textile manufacturers, analysts within the industry see it as a further indication of the dangers of being overly reliant on sole contracts with large multinational companies.

It is this over-reliance which could threaten other Northern textile manufacturers such as Desmond & Sons which already shed 100 jobs at the closure of its plant in Magherafelt, Co Derry, last month. Desmonds' nine factories across the north-west, which employ 2,600 staff, are solely reliant on supplying M & S.

A spokesman for Desmonds yesterday denied that its dependence on M & S was putting the company in danger. "We don't perceive our relationship with M & S as a `sole contract' but as a partnership. We have a long-standing and strong relationship with M & S and have every reason to believe that it will continue," he told The Irish Times.

While Desmonds fulfils one of M & S's main criteria for its suppliers, namely that of being a market leader in its particular field - Desmonds is a main player in the area of women's fashion clothing made from European fabric - sources within the company say that being "highly flexible and responsive to M & S's every need" is Desmonds' best bet for staying in business.

Others in the North's most traditional industry have not been so lucky. Last year, Saracen Clothing, a subsidiary of Coats Viyella, closed its factory in Lurgan, Co Armagh, with the loss of 500 jobs. Last month, Clendinnings, a textile printing company in Lurgan which employed 100 workers, announced it was going into administrative receivership, while Fruit of the Loom has put workers on a three-day week at its plants in Derry and Donegal. Northern Ireland's textile companies have no doubt suffered due to the strength of sterling. But they have also been slow to recognise that their main buyers are increasingly sourcing abroad, where labour costs are considerably cheaper.

In the short term, M & S's other big suppliers - Courtaulds Textiles, Dewhirst and Coats Viyella - will pick up Baird's share. But it is no secret that in the long term, M & S will no longer be able to afford the luxury of "buying British".

While in the 1970s, the company bought some 90 per cent of its clothing from British suppliers, the balance now is closer to 50 per cent, with analysts predicting it could go as low as 30 per cent in coming years.

The company's finance director, Mr Robert Colville, said M & S no longer had the "ability to favour the UK".

In Northern Ireland, the Institute of Directors (IoD) warned last week that the North's textile and clothing industries were in "inexorable decline".

Many suppliers would have to "swallow a dose of reality" and make urgent adjustments to their business strategies if they wanted to survive these difficult times, the IoD concluded.