A Hawick knitwear firm has paid a £500,000 dividend to its parent company for the first time, despite a fall in profits.
Barrie Knitwear’s accounts said that last year’s dividend was the first paid to Chanel International since it bought Barrie in 2012 and that regular payments were expected.
Barrie Knitwear, based at Burnfoot Road in Hawick, increased its turnover last year by 4 per cent to more than £13 million. The firm made its £500,000 dividend payment to Chanel after pre-tax profits fell from nearly £1.8 million to £1.2 million due to rising costs trimmed margins.
Craig Thomson, managing director of the luxury cashmere maker, said that last year was a success despite a continued weakening of the euro against sterling. Investment in plant and machinery had helped to produce a wider range of designs and develop the Barrie brand name, he said. Twenty new staff were also hired.
The directors said: “The company continues to increase its strategic focus on manufacturing high-quality goods with increased design complexity, along with continued investment in the development of the Barrie brand.
“This strategy has, in the short term, adversely affected both gross margin and operating profit. However, the directors expect significant gains to be realised from this strategy in 2016 and beyond, thus safeguarding the long-term future of the business.” Profits are expected to remain broadly unchanged this year.
Barrie has two boutiques – in Paris and Londdon – under its own brand. Its jumpers and cardigans sell for between £250 and £1,000.
Chanel bought Barrie after its previous parent company, Dawson International, fell into administration as a result of its pension liabilities. At that time Barrie employed 176 staff.