A Harris tweed mill in the Outer Hebrides is seeking a buyer for the business to preserve the future of its iconic cloth.
The Carloway Mill on the west of the Isle of Lewis employs 27 people and provides yarn to 30 weavers.
Chairman Derek Reid told Drapers he had thought the mill may enter voluntary administration last week, but it has since received interest from two serious buyers.
“[Chinese textile company] Shandong Ruyi invested 25% into the equity of the business in 2013, but has not put any more funds in since and they’re not interested to do so now,” he explained.
”I think it was probably speculative because they loved the product but I think it wasn’t of the right scale for their business. They have been very helpful in helping to generate sales in Japan, some in China and a little in the UK.”
Reid said the order books are full but one of the problems for the business is cashflow, because they have to pay weavers before the product is despatched but can often only receive payment 30 days after invoices.
He also said raw material costs have increased by 35% and weavers’ wages have risen, but the price of tweed has fallen by 10%.
“We need to be able to build our cash reserves so we can expand further, as well as invest in new machinery.”
He suggested one option, if they were to find a buyer or investor, could be to open a visitors’ centre where people could see Harris Tweed production in action.
Lorna McCauley, chief executive of the Harris Tweed Authority, said the industry is booming. In 2009, the industry produced 450,000 metres of cloth but by 2015 this had increased to 1.7 million metres. The industry employed 225 workers and 175 in 2015.
Drapers understands that Carloway Mill produces 6% of the 1.7m metres.