TaxPersonal TaxTakeover threatens finance jobs

Takeover threatens finance jobs

Doubts over job security at M&S supplier Claremont after #10.1m offer accepted.

Doubts were raised last week over the future of finance staff at0.1m offer accepted. Marks & Spencer supplier Claremont Garments, after Courtaulds Textiles launched a #10.1m cash offer for the company.

The bid, which was accepted by Claremont’s board, came amid a rash of profit warnings in the sector, blamed on the strong pound and subdued retail demand. In the past two weeks there have been warnings from textile companies, including Dewhirst and William Bird.

Claremont’s half-year results last week showed a pre-tax loss of #420,000 with net debt standing at #36.2m in June. Courtaulds, another M&S supplier, bucked the industry trend with a 17% increase in first-half pre-tax profits, before exceptional items.

Steve Prior, a partner at Robson Rhodes in Manchester, described the amount of money involved in the deal as ‘chicken feed’ to Courtaulds. A recent survey by the firm concluded that the textile industry needs to consolidate, since many companies were too small to survive on their own.

Prior warned that consolidation, such as Claremont’s, would probably lead to job cuts. ‘If you have two listed companies in an offer and one is small like Claremont, you don’t need two FDs,’ he said.

‘You might keep the odd individual, but I think most will be on their way in Claremont’s head office finance department,’ he added.

Pippa Wicks, Courtauld’s FD, said that it was too early to comment on the implications for any department including the finance team. She added that the bid was driven by Claremont’s strong position in ladies tailoring and lingerie.

In an official statement, Claremont said it had received assurances from Courtaulds that existing employment rights, for all employees, would be safeguarded.

Alistair Summers, finance director of shirt manufacturer, the Saville Row Company, said: ‘The bid is obviously driven by the fact they’re both M&S suppliers and it’s a very turbulent time for the textile industry. This is the beginning of a reorganisation in the industry.’

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