Luxury goods house Burberry has proposed closing its factory in Treorchy, South Wales, following a year-long review of its supply chain and manufacturing process.

Burberry concluded that the site, which makes polo shirts, is no longer commercially viable. The proposed closure, which would be likely to happen in early 2007, would leave more than 300 people jobless.

A spokeswoman told just-style that the closure was not yet definite and that Burberry hasn't made any plans to shut its other UK factories in Castleford, West Yorkshire, or Rotherham, South Yorkshire, which make items such as trench coats.

The company, which could transfer production to Asia or South America, will be starting formal consultation with union representatives and will make further announcements after a minimum of 90 days, the spokeswoman said.

Burberry's announcement comes as the UK struggles to hold onto the remaining dregs of its garment and textile sector, which has been worn away by cheaper foreign production.

Just this week Derbyshire textile dye company Stevensons Dyers said it would shut its doors while textile firm MA Cashmere, which is based in Innerleithen, Peeblesshire, collapsed without warning.