Shoppers shunning chunky knitwear sparked a sales decline at Coats’ clothing division last quarter, leaving group sales growth at zero per cent. Guinness Peat, the listed vehicle which owns Coats, reported a 10 per cent fall in like-for-like sales at fashion unit Craft for the three months ending 27 October .
Guinness Peat blamed the “impact of lower demand for fashion handknitting products” in the US and Europe as one of the reasons for the fall.
However, a pickup in handknitting sales in the US helped make third-quarter sales better than the second quarter, it said, adding that the outlook for Crafts was mixed.
The company said that Craft’s performance was expected to improve on the first half of 2014, “driven primarily by increased sales and cost reduction initiatives, however trading will remain challenging”.
The Coats business dates back to the 1750s and it also has an industrial division, which makes the cotton used in the humble tea bag.
Sales at its industrials group – which also makes products such as zips – rose five per cent on a like-for-like basis, helping to cushion the drop at Crafts, leaving overall group sales flat.
Guinness Peat was formed from a spin out of Irish investment bank Guinness Mah on in the early 1990s.