The historic Devon-based manufacturer Axminster Carpets finally collapsed into administration yesterday, a move which the company described as unavoidable.
Administrators at Duff & Phelps immediately laid off three-quarters of the staff at the firm, whose history goes back to 1755 when the Axminster weaving process was pioneered in the eponymous Devon town.

Axminster Carpets is one of the world's largest manufacturers of Axminster, Wilton and tufted carpet, using traditional techniques and natural materials. However, the carpet sector has suffered in the economic downturn, and directors at the firm warned last month that they were on the brink of appointing administrators, although they were hoping before that happened to come up with a rescue plan.

In the event, though, a combination of a sharp increase in raw material prices and a drop in sales proved too much for the manufacturer.

The administrators took a quick decision to downscale Axminster's carpet manufacturing operations and to halt yarn production. As a result, around 300 employees were made redundant at the Axminster and Buckfast sites yesterday, while 100 have been retained.

Axminster Carpets also operates two factory outlet stores which remain open for business, and the company says it will attempt to fulfil existing customer orders where possible. Its main suppliers have offered continued support for the business during the administration.

Meanwhile, the administrators say they are still assessing the company's financial position and exploring all potential options to maximise realisations for its creditors, including a sale of the business.

Axminster director Joshua Dutfield, commented: "Trading has been difficult, and although it saddens the board to make the decision to enter administration it could not be avoided. The management have been working with key suppliers, creditors and lenders to resolve the company's financial difficulties, and whilst the last few weeks have been stressful, the company managed to pay the wages yesterday.

"We are now committed to working with the administrators to asses all viable options for the future of the business and achieve the best possible outcome for all concerned, and most importantly the staff."

Joint administrator Benjamin Wiles added: "We recognise the importance of the business to the local community and will be seeking to work closely with management and all key stakeholders to restructure the business where possible, including the possibility of selling all or part of the business."

At the end of last month Axminster sold its tannery business, Devonia Products.