Hawick Knitwear has entered administration and 123 employees have been made redundant with immediate effect.
A further 56 workers have been retained, according to administrator KPMG.
The company, which has a manufacturing heritage dating back to 1874, designs and manufactures cashmere and wool-based knitwear from its facility in Hawick in the Scottish Borders. It produces products under the Hawick Knitwear and Clan Douglas brands, as well as producing private label for customers in the UK and overseas.
Joint administrators Blair Nimmo and Tony Friar of KPMG said the company had been experiencing difficult trading conditions in recent years due to increasing production costs and reducing margins. Mild winters have also taken their toll on the firm.
In its latest available results, Hawick Knitwear’s sales increased 9% to £9.3m for the year to March 31 2014, but it made a loss after tax of £459,818 compared with a profit of £1,336 in 2013.
Administrators are assessing all options to complete garments in progress and looking for an early sale of the business, brands, infrastructure and assets.
Nimmo said: “Hawick Knitwear has an excellent reputation in the industry. The company benefits from its heritage and established infrastructure, together with a developing brand and a highly-skilled workforce, which we believe will be an asset to prospective purchasers.
“Unfortunately, extremely difficult market conditions have led to the current position. It is regrettable that a high level of redundancies has been necessary at this stage and we will be working with employees and the relevant government agencies to ensure that the full range of support is available to those who are affected.”
In May last year, managing director Benny Hartop told Drapers that the company had taken delivery of two eight-needle Shima Seiki knitting machines to increase capacity.