Top-end cashmere a boost for Dawson

RENEWED demand for haute couture cashmere is likely to push annual profits at Dawson International ahead of expectations, the Scottish manufacturer said yesterday, writes Nathalie Thomas.

Kinross-based Dawson said its UK knitwear business, which supplies French couture houses, experienced a "strong" end to its financial year, which closed on 2 January. Growth at its US business, Dawson-Forte Cashmere, was similarly robust during the final three months, the firm said.

Anne Margaret Crow, an analyst at WH Ireland, yesterday revised her 2009 pre-tax profits forecast to 500,000, from a 1.9 million loss previously. However, this would still be down on the 1.2m profit achieved in 2008.

Crow said wealthy shoppers are now bored with the "ostentatious frugality" which was fashionable during the recession, and view items such as couture cardigans as an investment.

Dawson said in its trading update that its UK knitwear business, Barrie, benefited from customers bringing forward orders. However, it warned that this could affect margins in the first quarter of its current financial year.

David Cooper, group finance director, told The Scotsman that the last three months have been "extremely positive" for the two knitwear businesses but he warned that the performance at Dawson's third division, its home furnishings firm, was "disappointing". The furnishings operation is expected to report a "small" loss for 2009.

Dawson has been through changes over the past few years, including the sale last year of its 140-year-old cashmere spinning arm, Todd & Duncan, to China's Zhongyin Cashmere. Dawson said it has been forced to make a further 0.5m provision in its accounts relating to the Todd & Duncan business for "doubtful debts".

Dawson also sold its Dorma home furnishings brand to the Dunelm Group in 2008.