Perseverance running out of time

Perseverance Mills, the Lancashire manufacturer of lightweight performance fabrics, is in week eight of a winding down process following the calling in of a debt incurred by the company's owner. A delegation from a Japanese company is visiting the Padiham factory tomorrow but the best hope for the Pertex brand is believed to be an MBO.
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160 textile workers are to lose their jobs by the end of July unless the appointed receivers, PKF Accountants, announce a surprise bid from a "white knight", in the next few days.

This is unlikely. Many workers have already secured new jobs and the looms will shut down for good next month. Perseverance Mills was founded in 1900 as a cotton weaver, moving into nylon production in the 1950s. Pertex was developed in the 1970s after mountaineer Hamish Hamilton surmised that tightly-woven fabrics gained much of their water resistance by wicking moisture along the softly spun yarns – a characteristic known as capillary action.

Hamilton later created the Buffalo range of Pertex-and-pile clothing.

Many cycle clothing companies have relied on sourcing lightweight Pertex fabrics, and Gore-Tex has long been a customer of Perseverance Mills. Many Gore-Tex fabrics use Pertex face fabrics.

The Padiham Group, owner of Perseverance Mills, made poor investments in blown polystyrene packaging companies and the debts incurred by these poor investments were called in by the Bank of Scotland two months ago.

Ironically, Pertex has a full order book and is one of only a few specialist outdoor fabrics to have its own brand story: most Japanese and Taiwanese sports fabrics allow their fabrics to be house branded by the apparel companies.

Perseverance Mills also makes Blue, a sports parachute fabric.

The Padiham Group was created in 1998 by a £19m management buy-in that saw the combination of Perserverance Mills and Scapa Mouldings of Riston.

Padiham Group Limited was funded by the Bank of Scotland and the venture capital group 3i.

Later the same year, the Padiham Group bought the Waddington Arcol protective foam packaging business for £6.6m and went on to invest in other packaging businesses. However, by 2001 the investments had turned sour and the Padiham Group started selling off its non-textile companies, losing money in the process.

Philip Long and Ian Schofield of PKF Accountants were appointed administrative receivers for Perseverance Mills eight weeks ago and there had been early hopes of a speedy sale of the company.

“PKF has been very successful in achieving going concern sales," said Long at the start of the receivership.

"We hope to do the same for Perseverance Mills Ltd who, after many profitable years, has faced an increasingly tough marketplace.”

The receivers have been waiting for a buyer for the factory and have yet to entertain the most credible bid on the table and that's a purchase of the brand by management at Perseverance Mills. Pertex products would then be sourced from other factories, some abroad, but the brand's technologies would live on.

Ian Schofield, PKF partner, said: "We are doing everything we can to find a buyer for Perseverance Mills so that it will be sold as a going concern. However, despite interest from a number of parties, so far no one has been able to come up with a suitable offer for the company. We hope that there will be further progress with the current talks over the next few weeks, but at the moment we have to consider the alternative option which is that the company may need to be wound down."

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