London, England, January 5, 2007--The new owner of Hugh Mackay, carpet maker to the Queen, has returned the world famous North-East brand to profit less than a year after rescuing it from administrators, according to the Journal.
Middlesbrough-based Whitestone Weavers bought the brand, developed in Durham for over 104 years, along with its owner Gaskell Mackay, in April with the firm's £20m order book in tatters.
But Whitestone Weavers managing director Steve Byrne said the business, which has in the past made floor coverings for clients as diverse as the Royal Family, Caesar's Palace casino in Las Vegas, and the Houses of Parliament, had been successfully restructured and integrated into the parent group.
Mr Byrne said yesterday the company had "returned to profit in the first quarter" and was on track to generate sales of £6m in the year to the end of June, compared to £8m immediately before it went into administration. He said: "Turnover is down, but that is what we expected in the first year. When the company [went into administration] we lost all of our customers. It takes time to build up that trust again and we are in a position of having largely done that."
Mr Byrne said the company had recaptured "the majority" of those on its register of customers and was "in the process" of getting back the rest.
The group had invested "heavily" in inventories to better cater for demand for Gaskell Mackay carpets from the large leisure chains, which were undergoing a period of expansion and providing good custom for carpet makers generally.
The company had won back business from pub chain Mitchell & Butler and hotel operators Marriott and Holiday Inn in the past nine months as a result of the improvements, Mr Byrne said.
Design and manufacturing processes had also been improved so that the time taken from design to manufacture had been slashed from eight to four weeks. It had also expanded the colour palate for carpets by a third by introducing an additional color spectrum to its production processes.
Mr Byrne conceded the textiles sector had been through a tough time in recent years but said that the future looked bright for the restructured Gaskell Mackay, which makes most of its carpets in Poland.
Having re-established the company's reputation in the market, Mr Byrne said the group was targeting turnover from Gaskell Mackay of £12m-£13m within five years, assuming a turnover growth of 10%-15% per annum.
He said: "It is true that the industry is having a tough time of it, but those firms that have failed have not invested in the future.
"I believe that the previous owner did not make a profit the entire time they owned it. The private equity backers tired of pumping money in to the business month after month and that is why they sold it. We have made major investments and streamlined the manufacturing and design processes and importantly we are in profit."
