Caerlee Mills in Innerleithen in the Scottish Borders region dates back to 1788, although its current operator was only formed in 2010 after a management buy-out from JJ & HB 1788 Cashmere Mills Limited, a company named after the original mill founders.

Previously the mill was in the ownership of the world renowned Ballantyne Cashmere company, which is famous for its luxury cashmere knitwear. Caerlee, which produces hand intarsia and other cashmere knitwear, employed 36 people but a drop in orders left the company in difficulty.

Last week the liquidator said that they planned for the business to carry on trading while they searched for a buyer. Blair Nimmo, head of restructuring for KPMG, joint provisional liquidator told The Scotsman newspaper:

“Caerlee Mills has a rich history dating back more than 200 years and remains an attractive acquisition for the right buyer. The company has been facing difficulties following trading losses and increasing cash-flow pressures, mainly resulting from a reduction in orders.”

“There remains an excellent opportunity to acquire a well-known business which manufactures a top-quality product, and we are hopeful a buyer can be found.”

Mr Nimmo, then told The Herald yesterday: "Despite our best efforts to secure the sale of the mill we have been left with no option other than to cease all operations with immediate effect.”

"Unfortunately 33 of the company's 36 employees have been made redundant, with three staff being retained in the short term to assist in winding down the business.”

"There was no interest expressed from parties looking to continue running Caerlee Mills as a going concern, which has ultimately led to its closure.”

"We would like to thank staff for their co-operation through this difficult process. We will be working with employees to ensure that support to find alternative employment is available for all those who need it."

Caerlee Mills Ltd, which traded as Ballantyne Cashmere Ltd, employed 36 people at the site and is said to have had a turnover in the region of £1 million.