SMITHS of Peterhead has been formally placed into administration after failing to reach an agreement with HM Customs to pay back unpaid taxes amounting to nearly £120,000.
Owner Marian Shildrick had hoped to negotiate a deal with HMRC, but now joint administrators Ken Pattullo and Paul Dounsis of insolvency specialists Begbies Traynor have been appointed in a bid to keep the Buchan Braes-based company afloat.
However, the 50-strong workforce were told last week to prepare for job losses as steps were taken to find a buyer for the firm, which has played an integral part of the Buchan economy for the past two centuries.
Mr Dounis confirmed last week that the company would continue to trade in the meantime but limited redundancies were being planned for staff.
However, he said that be believed Smiths could be a viable business and hopefully a buyer could be found soon.
Smiths is one of the country’s leading producers of wool fabric and knitwear yarns and has a client list boasting the likes of Prada, Gucci and Ralph Lauren.
The business was established in 1818 based at Peterhead’s Kirkburn Mill and remained there until two years ago when German supermarket giant Aldi bought the site which it planned to turn into a retail park. Smiths moved to its current base at Buchan Braes at Boddam and obtained planning consent to build a purpose-built factory at Lunderton near Longside Airfield. The firm carries out most of its manufacturing at it’s second base at Milladen Mill at Mintlaw.
Commenting on the latest developments, Banff and Buchan MSP Stewart Stevenson said: “The downturn has badly affected the textiles industry generally and I’m aware that the company has been in difficulties with HM Revenue and Customs.
“My MP colleague Eilidh Whiteford has been assisting in that regard but it is nevertheless disappointing that the company has had to call in the administrators as it had ambitious plans for relocation and expansion in the Buchan area.
“The workforce at Smiths are highly-skilled textile workers and the company has a very good reputation, so I hope that the administrators who have been brought in will be able to find a way out of the current difficulties.”
Dr. Whiteford added: “I did intervene with HMRC on the company’s behalf and managed to secure a short stay of execution for them. However, HMRC have been intransigent and have forced this company into administration- in my view quiet unnecessarily.
“There is no doubt that the textile’s sector has had a difficult recession but there is lots of evidence that the corner had been turned and this company has a healthy order book.
“I will continue to do all I can to protect local jobs and have asked for a meeting with the administrators.”
Buchan councillor, Anne Allan, also expressed her dismay at the news stating that she hoped the administrators could salvage something to allow employment to continue at the Boddam site.
“This is clearly very bad news for one of the few manufacturing companies based locally,” she said.