Dawson International hit by rising cotton prices

dyeing machines Dawson produces cashmere jerseys and fine bed linen

Related Stories

Kinross-based textile firm Dawson International has reported widening losses in its home furnishings division following a rise in cotton prices.

However, the firm said its UK and US knitwear divisions performed better than expected in the past six months.

As a result, overall trading performance for the year to 1 January was "in line with expectations".

In a trading update, Dawson said its performance in 2011 was likely to be lower than previously expected.

The cashmere and home furnishings group also reported a payment of $1.5m (£940,000) from Inner Mongolia King Deer Ltd on 5 January 2011, which would bring total exceptional income in 2010 to $2.5m (£1.6m).

However, this would be offset "to some extent" by restructuring costs and an increase in environmental clean-up cost provisions in both the UK and the USA.

Price increases

In a statement, Dawson said: "The increase in cotton prices is now well communicated in the market and it is anticipated that price increases will be accepted by our customers in 2011, allowing some recovery in margins in our home furnishings business.

"Cashmere price increases will impact on both our UK and US Knitwear businesses."

It added: "Of most concern is the impact on our US knitwear business where private label customers have indicated that they will reduce their cashmere buys, leading to a significant reduction in turnover and profitability in that business."

Last September, the company's chief executive, Andy Bartness, stood down amid warnings of falling profits and a large pension deficit.

More on This Story

Related Stories

The BBC is not responsible for the content of external Internet sites

BBC Tayside & Central

Weather

Dundee

16 °C 11 °C

Features

BBC © 2014 The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.