As the historic Devonshire carpet maker Axminster calls in the administrators, Channel 4 News takes a look at how much of a blow this could be for the South West's economy.
Devon-based carpet manufacturer Axminster announced today it is going into administration, putting at least 400 jobs at risk. In a statement, the company said: "Axminster Carpets Limited continues to trade while the company explores all potential rescue/ restructuring options."
The company's Director, Joshua Dutfield, said: "Trading has been difficult and the management has been working with key suppliers, creditors and the lenders in an attempt to resolve the company's financial difficulties. We continue to be committed to working to achieve the best possible outcome for all concerned and most importantly the staff and suppliers."
Tim Jones, Chairman of the South West Local Enterprise Partnership told Channel 4 News about 400 jobs are at risk at the two factories in Axminster and Buckfastleigh. He also explained that a further 50 to 60 jobs could be at risk from the local supply chain.
"This is like losing a member of the family" Tim Jones, South West Local Enterprise Partnership
He said: "We are clearly deeply saddened that such a famous company name is in such a difficult financial condition. It has been part of the branding for the area for decades and to lose a trophy business of this scale would be devastating."
A Royal following
Axminster carpets have been made in Devonshire for more than 250 years. Thomas Whitty came up with the first ever method for weaving carpets by hand in 1755 in the town of Axminster in Devon. The result was a great success and quickly became the carpet choice for the wealthy families living in country homes and town houses across England. Axminster carpets have been bought by the likes of King George III and Queen Charlotte and they could be found adorning the floors of Chatsworth House and Brighton Pavilion. In January 2012 the company was granted a royal warrant for the supply of goods to the Queen.
Tim Jones told Channel 4 News that a large part of the economy in South West England is famous for its brand names and historic family businesses. "This is like losing a member of the family", he said.
"Companies like Axminster are known on the national and international map because they are deep-rooted and loyal family businesses. We take this news very badly", he added.
The Axminster carpet firm called in the administrators on same day the British Retail Consortium sent a submission to the Chancellor George Osborne, suggesting he freeze business rates for April 2013 to support jobs and growth.
A spokesman at the BRC told Channel 4 News that in some ways, the news about Axminster is not surprising: "During the tough times over last few years the home furnishings sector has had the toughest time because it's the sort of thing customers will postpone buying. Over the last few years, carpets and others sorts of house-hold related products have been suffering."
However, Tim Jones maintains that the South West region is faring well in the current economic climate. He said the region has a higher employment rate than the national average, thanks to a high proportion of small businesses setting up there. According to the latest figures, in 2011 total economic output in Devon and Somerset grew by 2.6 per cent.
"Over the last few years, carpets and others sorts of house-hold related products have been suffering" The British Retail Consortium
Channel 4 News asked Tim Jones whether this latest news about Axminster would change things for the local economy. "The effect of losing the Axminster carpet firm is something that would have a broader impact than just immediate job losses. It would have massive impact on the local economy because a high percentage of it depends on businesses like Axminster being successful", he said.
However, he added: "This is a blip as far as we're concerned. We have some enormous projects on the go - in Exeter, just for example, we have plenty of capital infrastructure activity."