Textile companies are failing at an increasing rate in Japan and their liabilities are reaching a record high an Osaka-based private research firm told the Japan Times Monday.

The failure rate has climbed 7.9 per cent from a year earlier to 603 textile companies in receivership, the researchers said.

Credit Exchange Agency Ltd. said total liabilities rose 0.08 percent to 523bn yen, the largest first half-year amount since the company began collecting data in 1952.

The previous record was 522.6bn yen, recorded in January - June 2000.

The data covers bankruptcies with liabilities of 10m yen or more for textile-related firms, which include department stores and supermarkets whose sales from clothes account for more than 20 per cent of total sales.

A Credit Exchange Agency official said the number of bankruptcies in the textile industry would likely increase for the second half of the year, especially for small and medium-sized firms, because the business environment surrounding the industry remains severe.