The Courier & Advertiser (Fife Edition)
Sales unravel by 25% as cashmere demand falls
AKinross cashmere firm that supplies some of the world’s top fashion houses saw sales fall 25% last year due to the pandemic.
Todd & Duncan dyes and spins cashmere and lambswool yarns for some well-known names in high fashion.
With global retail closures and fewer events, the high-end fashion market has been badly affected by Covid-19.
Managing director Iain Cormack described the impact on the business, which has traded since 1867.
“We ended 2020 with a decline of 25% over anticipated volumes which is due to reduced demand from our customers following the Covid-19 pandemic and reductions in the footfall in our customers’ stores,” he said.
“Covid-19 resulted in the factory being closed for six weeks with a phased return thereafter.
“Significant efforts from the factory employees ensured a safe Covid-19 environment for our employees.
“Thanks must be extended to all our staff who have been very proactive at ensuring a safe social distancing environment.”
Workers were supplied with reusable face masks supplied by some of the firm’s Scottish knitting customers.
Mr Cormack said a reduction in the workforce last year was due to the decline in sales.
At the start of last year the manufacturer had 200 staff but this has fallen to 185 workers.
“This reflects the impact of reduction in sales volumes since Covid-19,” the managing director said. “No redundancies were required.”
The factory at Lochleven Mills is now operating at full capacity.
However, Mr Cormack predicts 2021 sales volume will be similar to last year.
He hopes the vaccination programme will lead to a recovery in the high-end fashion market next year.
“Even though we operate at the high luxury end of the cashmere industry the ongoing global pandemic and the resulting reduced footfall in retail is expected to last throughout 2021,” he said.
“An improvement is anticipated during 2022 as the world recovers following the global vaccination programme.”
Newly filed company accounts for the year ending December 31 2019 show a slight increase in sales in the last year of trading before the pandemic.
Turnover was £27.6 million compared to £27.4m in 2018.
Higher cost of sales led the company to record a pre-tax loss of £478,000 compared to a £1.6m pretax profit in 2018.
Mr Cormack, who has led the firm since 2012, described the trading as “satisfactory given the challenging market trading conditions”.
“We passed on price reductions to our customers following a reduction in the raw material costs which resulted in some reduced margins during the year,” he said.
The accounts also reveal a change in ownership. On December 23 2019, Ningxia Zhongyin Cashmere Company Ltd’s 100% holding in Todd & Duncan was sold to Ningxia Zheao Enterprise Management Partnership. The sale price was not disclosed.
The ultimate parent company is Zhejiang Xinao Textiles Inc, a Chinese wool and cashmere company listed on the Shanghai stock exchange.
“The transfer of ownership has been extremely positive for Todd & Duncan and we look forward to working with them long into the future,” Mr Cormack added.
Todd & Duncan state its production uses methods that are true to the ways of the past.
The firm claims the water from Loch Leven helps to open up the cashmere fibres, resulting in consistent colour.