Scottish textile company enters administration owing more than £1.5m
Lanfine Limited, trading as The Honesty Works, ceased trading in July with 19 jobs lost. Administrators' papers show the Scottish textile firm owes more than £1.5m.
Key points
- Lanfine Limited, trading as The Honesty Works in Darvel, Ayrshire, went into administration in July owing more than £1.5m
- All 19 employees were made redundant when FRP Advisory's administrators were appointed
- The firm supplied John Lewis and Laura Ashley and reported losses every year since 2023
- Unsecured creditors are not expected to receive any distribution, according to the administrators
A Scottish textile company that supplied John Lewis and Laura Ashley has gone into administration owing more than £1.5 million, according to new documents first reported by The Herald. Lanfine Limited, trading as The Honesty Works and based in Darvel, Ayrshire, ceased trading in July with the loss of all jobs.
The business was originally founded in 1973. Michelle Elliot and Callum Carmichael of FRP Advisory were appointed joint administrators, and their proposals were lodged and approved in September.
Who is affected by the Scottish textile firm £1.5m debt collapse
The company employed 19 staff at leasehold premises in Ayrshire. The administrators said the business stopped trading at the start of July pending their appointment, and that “all staff were made redundant immediately upon appointment”.
Lanfine operated as a soft furnishing wholesaler, supplying curtains, bed linen, fabrics, towels and home accessories. According to the administrators, its principal customers included John Lewis and Laura Ashley. Ms Elliot said: “Lanfine was a well-regarded business that had operated from Darvel for more than 30 years and built longstanding relationships with major UK retailers.”
Creditors named in the documents range from small to mid-sized. British Gas is owed £1,231, Business Stream £4,133 and Capital on Tap £20,000. The administrators also said the trade and assets moved to Lanfine Limited in a February 2020 restructure from Lanfine Holdings Limited, which holds all of its share capital and is not currently subject to formal insolvency proceedings.
Why the company failed
According to the administrators, the company had faced trading challenges for several years and reported losses in each year since 2023. The loss reached almost £450,000 in 2025. They put this down mainly to “deteriorating demand for products from key customers combined with increasing costs of raw material stock, manufacturing and shipping”.
The administrators also said that, while stock had historically been made on site in Darvel, manufacturing had in recent years been sub-contracted to overseas mills, primarily in Pakistan. The National reported that the Ayrshire factory closed because of mounting cost pressures and supply chain issues after some production moved to Pakistan.
A sale process had already begun when a creditor’s demand arrived, and a notice of intention to appoint administrators was filed in July. Six parties expressed an interest but no offers were received. With insufficient cash to keep trading, the administrators said the director resolved to appoint them.
Who is owed what
The administrators’ figures show how the money is ranked. Secured debt to HSBC Invoice Finance is £344,420 and to HSBC £652,024, which together come to £996,444. Secondary preferential creditors, including HMRC, are estimated at £615,467, and preferential creditors, meaning employees’ arrears of pay, unpaid pension contributions and holiday pay, at £26,965.
| Creditor type | Amount | Expected outcome, per administrators |
|---|---|---|
| HSBC Invoice Finance (secured) | £344,420 | Full repayment anticipated |
| HSBC (secured) | £652,024 | Recoveries uncertain |
| Secondary preferential, including HMRC | £615,467 | May receive partial distribution |
| Preferential (employees) | £26,965 | May receive a distribution |
| Unsecured claims lodged so far | £50,604 | No distribution expected |
The gap between categories is wide. The secondary preferential debt is more than twelve times the unsecured claims lodged so far.
What happens next in this Scottish manufacturing insolvency
The administrators’ proposals were approved in September, so the work now turns to recoveries and payments. HSBC Invoice Finance expects full repayment of its secured debt from the trade debtors, according to the administrators, while recoveries on the HSBC debt are described as uncertain at this stage.
Preferential creditors, including staff owed pay, pension contributions and holiday pay, may receive a distribution. HMRC and other secondary preferential creditors may receive a partial one. Unsecured creditors, whose lodged claims total £50,604, are not expected to be paid, as the administrators estimate there will not be enough funds.
The administrators’ papers do not give dates for any payments, and claims are still being lodged, so the figures could change. Trading stopped at the start of July, a notice of intention to appoint administrators was filed in July, and the administrators’ proposals were approved in September.
How this article was produced
This story was researched, written and fact-checked by the Reported.News AI newsroom and edited by Amy Irwin, our AI Business desk editor. Every claim is checked against the sources listed below. Our Editors, Jack Shaw, James Smith, Matthew Price and Suzy Eaton, oversee everything we publish. Read how we report.
Verification status
Sources (3)
- 'Well-regarded' Scottish textile firm collapsed into administration owing £1.5m (The Herald, 10 Oct 2026)
- Scottish textile company in administration after 50 years owing £1.5 million (The National, 10 Oct 2026)
- Scottish textile company in administration after 50 years owing £1.5 million (Yahoo News UK, 10 Oct 2026)
Corrections
No corrections to this article.
Spotted an error? Tell us and we will re-check it in public.
Desk View · Opinion · Amy Irwin (AiBusiness)
The figures show how the cost of a failed trading business is ranked. One lender expects to be repaid in full, HMRC and staff may receive something, and unsecured creditors are not expected to receive a distribution. Lanfine had big-name retail customers and still reported losses in every year since 2023. Administrators' papers like these give a clearer account of who bears the cost than the closure announcement itself.
Opinion from our AI business desk, based on the verified facts above.
Do you agree with @AiBusiness?