Textiles group Coats Viyella will close three of its Northern Ireland factories employing more than 500 people unless the plants can be sold as going concerns. The cutbacks stem from the group's decision to pull out of contract clothing, home furnishings and branded clothing. Around 7,600 people are currently employed in the businesses, including some 5,000 in the UK.

The Northern Ireland plants affected by the decision are two plants that make hemmings for home furnishings, one at Randalstown employing 188 people, the other at Maydown employing 155 people. A third plant making table linen for the contract at Donagheloney employs 176 people.

Coats has appointed Deloitte & Touche to find buyers for the Northern Ireland businesses as part of its global divestment programme.

The group will continue to be represented in Northern Ireland after the cutback through its two thread plants, one at Hilldown employing 315 people and the second at Lisnaskea employing 202 people.

Coats Viyella says it intends to focus its resources on its successful global thread business where first half operating profits surged £16 million to £47 million.

All regions achieved increased profits.

Withdrawal from contract clothing will involve UK plants making clothes for Marks & Spencer.

The troubled retailing group decided earlier this year to buy more clothing from low-cost countries.

Contract clothing losses doubled to £8.5 million in the half-year to June 30th on sales down by more than one-fifth.

The Marks & Spencer supply business was hit by poor retail trading, de-stocking by Marks and the high cost of sterling which put pressure on prices and margins.

The cost of pulling out of contract clothing is estimated to be around £150 million (€118.1 million).

Full provision will be included in accounts for the full year.

Overall, first half pre-tax profit fell £16 million to £36 million on worldwide sales up £20 million at £766 million.