Struggling cashmere and knitwear specialist Dawson International Plc has finally called in the administrators after failing to resolve its pension problems, in a move that puts the jobs of around 180 staff at risk.

The decision yesterday (15 August) follows a warning last month that such a step might be imminent, after proposals to put its pension plans into a protection fund were rejected.

Administrators at KPMG say they are continuing to trade Dawson's UK business - which consists mainly of the Barrie knitwear operation based in Hawick in the Scottish Borders - while they seek a buyer.

But they stress the situation does not affect the US-based Dawson Forte cashmere business, which sources garments from China for US private label programmes and its own branded cashmere collection 'Kinross'. Not only is this "well-funded", but it continues to trade under the control of its directors.

It emerged yesterday that the final straw for Dawson International was a demand by pension trustees for payment of a pension debt of GBP129m (US$203m) by 19 August. Unable to meet this, Dawson's directors "concluded that they had no alternative but to appoint administrators," KPMG said in a statement.

They added that the underlying Barrie business has been trading profitably, and in the year ended 31 March 2012 turned over GBP9.7m (US$15.2m), with around 90% of sales generated by exports.

The cashmere specialist makes garments at its factory in the Scottish Borders and sells to some of the world's most prestigious couture houses, department stores and private label retail outlets. It made a pre-tax profit of GBP1.1m in the last financial year.

The administration "represents an excellent opportunity to acquire a well known and profitable Scottish cashmere knitwear business with over 100 years of trading history, a portfolio of recognised brand names, including Barrie, Glenmac, John Laing and Kinross, and a worldwide customer base," said joint administrator Blair Nimmo. 

Dawson, whose first-half profit fell 52% to GBP0.62m (US$0.97m), said contributions to its pension plans came to GBP2.2m last year. It has also incurred advisory fees of over GBP1.4m in the past four years as it has tried to find a solution to the problem.

The latest move comes after more than a decade of upheaval at the 140-year-old firm, which has struggled with falling sales, high cashmere costs and widening losses.

In 2000 it sold Pringle of Scotland to the Hong Kong based Fang Brothers for GBP6m, followed four years later by its Ballantyne division was bought by Charme Investments SCA, Alfredo Canessa and Massimo Alba for GBB14.55m in cash.

Three years ago it cut 10% of the workforce at Barrie Knitwear, and sold its Todd & Duncan cashmere yarn spinning business to Ningxia Zhongyin Cashmere Company, one of its Chinese suppliers, for GBP13.5m (US$21.9m).