Group behind the fabric of the fashion world goes into administration
The family-owned company, which supplies leading fashion houses including Gucci, Prada, Stella McCartney and Ralph Lauren with woollen fabrics and knitwear yarns, called in Begbies Traynor after failing to reach agreement with a major creditor over payment of outstanding debts amounting to almost 120,000.
Joint administrators Ken Pattullo and Paul Dounis are continuing to trade the 192-year-old firm while a purchaser is sought and said "limited" redundancies were planned from the 50-strong workforce.
Dounis said: "It would be very sad to see Scotland lose such a historic and prestigious firm as well as the loss of much-needed jobs in the area.
"We believe that Smiths can be a viable business but has suffered from fluctuations in demand for high quality woollen fabrics during the recession.
"It is unfortunate that the company has been unable to agree repayment terms with the creditors, however we are continuing to trade the business as we are hopeful that a purchaser will be found."
Smiths of Peterhead has had a presence in Scotland since 1818. Founded by two brothers from Yorkshire who had travelled to Scotland looking for work in textile mills, the firm moved to its current location at Buchan Braes at Boddam two years ago after its previous Kirkburn site was bought by retail giant Aldi.
The firm also has a second base at 18th century Milladen Mill at Mintlaw where most of its manufacturing work is carried out. As well as supplying fabrics for clothing, the company's products are used in soft furnishings and shoes.
According to the latest accounts for the year to 31 July last year, the company had net assets of 510,000.
Earlier this month a winding up order was issued against the business after an application by HM Revenue and Customs over unpaid debts.