ROBERT Morris has pruned his furniture manufacturing business dramatically, cutting the workforce by around 30 per cent, after incurring heavy losses amid fierce competition from China.
The entrepreneur revealed the H Morris & Company group he runs has incurred a charge of around three million pounds after selling the division that made furniture to order for businesses.
The write down recorded following the sale of the contract division pushed H Morris around half a million pound into the red in the year to January 31.
It came after the company made a £1.7m loss in the preceding year when it sold off its office furniture operation.
The sales, which were accompanied by around 30 job losses at the company’s Glasgow plant, reflect the unrelenting pressure faced by some UK manufacturing operations.
“The whole western world has been hit be a sledgehammer from the Far East and the low cost countries,” said Mr Morris.
“We can’t buy the material in this country for the same price that they can make the furniture and ship it here.”
He added: “Basically all of the factories in England have closed up or gone bust.”
The disposals leave H Morris with a furniture division focused on supplying the domestic market under brands such as G Plan.
Founded by Mr Morris’s grandfather in 1904, the furniture operation employs around 80 people. H Morris had a monthly average of 108 employees in the year to January 2013.
Mr Morris said manufacturing jobs were lost in Glasgow following both of the disposals.
The domestic business is trading profitably amid tough conditions. It sells to retailers, mostly in the UK.
“We are happy enough with the figures but it’s still a difficult market,” noted Mr Morris who said the recent improvement in the housing market has not had much impact on sales. He blamed this on people buying cheaper Chinese stuff.
However, Mr Morris reckons the remaining manufacturing operation is of a manageable size and sustainable.
Mr Morris said the group is in good shape following the big changes that have been made in recent years.
“We’re much happier where we are,” he said. “We’ve had the write downs , we’re still strong balance sheet-wise and we’re debt free. So you can’t actually want for much more. We have no shareholder that we have to show off to.”
H Morris & Company has diversified into breeding and showing horses.
It owns an equestrian centre at Fenwick in Ayrshire, which Mr Morris bought out of receivership in September 2013.
Mr Morris, 58, has been pleased with the progress made at the centre, where the group has invested around a million pounds since taking control.
“We’ve got that turned round now and it’s a very, very busy equestrian centre,” said Mr Morris, who noted the business operates the largest indoor arena for showing in Europe.
Accounts for H Morris & Company filed this month at Companies House show the group made a pre-tax loss of £1.7m in the year to January 31, 2014, compared with a deficit of £62,000 in the preceding year.
Sales fell to £13.3m from £16.9m.
The group sold the contract division to Merseyside-based Dams International Furniture Group for an undisclosed sum.
It sold the office furniture division to Roc Furniture for an disclosed sum.
The latest disposals continue a process which has resulted in a big reduction in H Morris’s furniture manufacturing activity in recent years.
The company closed its educational furniture division in 2009 ahead of expected cuts in public spending. H Morris had sold the Homestyle kitchens operation in April 2008.
H Morris employed around 200 people in manufacturing in 2008.
The company is a subsidiary of Mr Morris’s Neidpath Investment Company. This also runs a property letting business, which has been performing well.
Neidpath Investment Company made a £1.1m pre-tax loss in the year to January 2014, compared with £60,000 in the preceding year.
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