THE textile trade in Huddersfield was reeling today with the news that two of its top firms are in administration.

Slaithwaite-based yarn spinner Globe Worsted Co Ltd joins weaving firm Huddersfield Fine Worsted Ltd of Kirkheaton in the hands of administrators.

The companies, together employing 260 people, are part of Leeds-based Hartley Investment Trust Ltd.

Two other Hartley subsidiaries - Leeds-based Birchgill Ltd and Yellowband Ltd - are also in administration.

A statement by Hartley company secretary Alan Murray said administrators were called in after a breakdown in talks between the group and the Inland Revenue and Customs and Excise over payments of previously deferred PAYE and VAT.

That deferral was agreed from 2001 to early 2003 after the group was badly hit in the foot and mouth crisis of 2001.

Payments of VAT and PAYE resumed from early 2003 onwards and have continued normally since then.

But Mr Murray said: "Based on legal and expert advice, there was no alternative but to put both companies in administation with the intention of those profitable companies continuing in some form in the future."

He stressed that both Huddersfield firms were profitable, had strong order books and were paying creditors in the "normal course of business".

He said: "Normal working is continuing at both of the Huddersfield plants which have been working flat out to meet demand for superfine weaving yarns and fancy worsteds since the beginning of the year."

Order levels at HFW - which has 140 employees - are running 50% up on last year following the revival of key markets in the USA, Italy and Japan.

Globe - with a 120-strong workforce - is also very busy supplying "superfine" yarns to its customers, including HFW.

Administrator Gerald Krasner, of Leeds accountancy firm Bartfields, is reviewing the finances of both companies before drawing up a report for creditors in the next few weeks.

Textile union official Tony Barrow said he was concerned about safeguarding jobs at Globe and HFW.

He said: "Both companies are doing very well in terms of orders, but they appear to be the victims of circumstances outside their control."

Globe, founded in 1887, supplies superfine yarns to weavers who create cloth for top-quality suits for customers in export markets such as the USA, Japan and the Middle East.

Globe hit the headlines earlier this year when the company supplied the yarn for suits worn by Britain's Olympic squad.

HFW weaves cloth for business suits and countrywear as well as the famous Balmoral tartan.

It supplies fashion names such as Gucci, Versace, Prada as well as Savile Row tailors.