Buy-out saves 130 carpet factory jobs.

Byline: By Iain Laing

More than 130 jobs have been saved with the management buy-out of a 100-year-old carpet company which numbers rocks stars and royalty among its customers.

Durham-based Hugh Mackay Carpets went into administration last month after years of mounting debts were worsened by the collapse of some of its yarn suppliers.

But now a management team, lead by its former chief executive Steve Cowie, has plans to quadruple its turnover in a year and consider expansion by acquisition.

As its market shrank the company cut its workforce from around 300 three years ago to 180 at the beginning of this year and another 49 when it went into receivership.

But now it says it will maintain staffing numbers with the hope of taking on more workers as business grows.

The business is taking on agents to build international sales to its core market of pubs, hotels, casinos and transport as well as looking after its glamorous roster of individual clients which includes the Queen and the Houses of Parliament.

It has money in the bank for the first time in years after clearing its debts during four weeks in administration, although it also lost some orders.

Mr Cowie said: "We have some exciting plans to take the company forward and the money to achieve them.

"Like a lot of the manufacturing sector we have had a difficult few years. We may be in a niche market but our rivals have either had to raise other funds or have suffered badly or gone under.

"But we are doing things differently now and I want to see the order book increase to more than pounds 10m in the next 12 months and by at least 10pc a year after that.

"We have not made a profit for the last three years or so but I hope to be able to do so this year. We want to build on the export market and improve on our retail sales. We are launching new ranges which we hope will see us start to lead fashion rather than follow it. Our ranges before are best described as traditional but I am confident about our new ranges."

The company was also hit by the expense of investing in new equipment in recent years as it attempted to cut costs and improve efficiency.

Allied Textiles bought the company from the Mackay family around 20 years ago, and it has been run by a number of owners since then.

In March, it was subject to a management buy-out backed by The Royal Bank of Scotland. The latest buy-out was backed by Epic Reconstruction.