PRINGLE PUT ON THE BLOCK BY DAWSON
Byline: James Fallon
LONDON — Dawson International PLC keeps slimming down. The company last week put its struggling Pringle of Scotland subsidiary on the block.
Dawson announced the planned sale in reporting an after-tax loss of $31.6 million on a 16.6 percent drop in sales to $105.1 million in the half-year ended July 3.
This compares with an after-tax loss of $38.4 million on sales of $126.1 million a year earlier. Dollar figures are translated from the English pound at current exchange.
The proposed sale of Pringle, once one of Dawson’s main subsidiaries, follows several years of disappointing performances at Pringle and at the group as a whole.
Dawson has been selling its underperforming businesses during the last 18 months and last month sold its J.E. Morgan and Duofold operations in the U.S. to Sara Lee Corp. for about $97.3 million. It also sold its Dawson Fur Fabrics operation. No time frame has been set for the sale of Pringle.
Ian Irvine, Dawson’s chairman, said in a statement that the planned sale of Pringle followed a detailed review of the business and a number of initiatives aimed at repositioning the brand.
“The review has concluded that Pringle must have a brand-led strategy supported by significant resources to maximize its full potential,” Irvine said. “The board of Dawson International recognizes that it does not have the resources to fully maximize this potential.”
Another reason for the sale, he said, was that Pringle’s product line was refocused on leisurewear and apparel that don’t rely exclusively on cashmere.
Dawson in future wants to focus only on cashmere and cashmere processing. For that reason, the company is in talks to sell its Blackwood Bros. wool textile subsidiary and also plans to sell its Laidlaw & Fairgrieve wool yarn operation.
Following these disposals, Dawson would be left with the cashmere brands Ballantyne and Barrie as well as the cashmere processing business Todd & Duncan.
“The results for the first six months reinforce the reasons why we decided to focus on becoming a niche cashmere business and dispose of noncore businesses,” Irvine said. “We expect to dispose of the balance of loss-making, noncore businesses in the short term. The core cashmere businesses are performing well and are expected to move strongly back into profit by the end of this financial year.”
Dawson said the core cashmere businesses had an operating loss of $3.4 million on a 4.4 percent drop in sales to $49.8 million in the first half. This compares with an operating loss of $2.4 million on sales of $52.1 million last year.