Pringle fails to hit profit but foresees bright future

The company, which was bought by Hong Kong's Fang family from Dawson International a decade ago, has been repositioning itself in an attempt to gain custom beyond its traditional golfing clientele.

While the firm's change of image has won the praise of movie and music stars including Madonna, Claudia Schiffer and Scarlett Johansson, the business has struggled financially.

Newly-filed accounts at Companies House show Pringle suffered a loss before tax of 9.3 million in the year to 28 March, slightly down on the 9.5m posted in 2007-8 but the third year in a row the deficit has been north of 9m.

The Edinburgh-registered company stressed it continued to invest in the "long-term development of the Pringle brand and business on a global basis". It said those costs were the "principal driver" of the losses.

Turnover slipped to 17.3m from 17.7m having also fallen the year before, although gross margin rose from 39 per cent to 43 per cent.

Operating losses were broadly flat at about 9.5m.

The accounts noted that further funding of 8m had been received "subsequent to the year end from Pringle Enterprises Limited, the group's immediate parent company". That follows a similar 5m injection a year earlier.

Writing in the accounts, the directors state: "Given the continued investment in the Pringle of Scotland brand, the directors are not expecting to report operating profits in the short term but are satisfied that the development of the brand and of the business are progressing in line with their long-term strategic objectives".

During the period under review, the firm appointed Mary-Adair Macaire – previously global marketing boss of French fashion house Chanel and a lawyer by training – as chief executive.

Douglas Fang, son of the owning family, ran the business from 2006 to 2008, closing its historic knitwear mill in Hawick with the loss of about 80 jobs. Prior to that, Pringle was headed by Kim Winser, once at Marks & Spencer. The latest accounts also show that redundancy costs relating to the Hawick closure amounted to some 800,000.

The bill for staff wages fell to 4.9m from 5.4m, although overall staff costs, including pension contributions and redundancy costs, topped 6.4m, up from 6.2m. Total directors' remuneration was given as a nominal 6,000, unchanged from the 2007-8 accounts, suggesting salaries were paid out from the parent company.

Following the Hawick factory closure, Pringle – whose roots date back to 1815 – has been outsourcing much of its fine-knit designs and garment production to companies in the Borders.

The directors say in the report: "Pringle is proud of its Scottish heritage and is committed to continued procurement from Scotland."