The closure of Glenaden Shirts marks the end of a Derry industry that once employed 20,000

HISTORY MEANS nothing when it comes to paying the bills - as one of the last remaining shirt-makers in Derry has learned the hard way.

Glenaden Shirts could trace its heritage all the way back to the mid-19th century, but it could not, despite the best efforts of its owners, secure its future.

The company yesterday confirmed it has gone into administration, signalling the end of a proud shirt-making tradition spanning some 150 years in Derry.

Glenaden, which produced luxury shirts for designer brands such as Burberry and Thomas Pink, had been struggling for several years to survive in an extremely competitive marketplace. Eight years ago the company was threatened with closure when its previous owners Coats Viyella decided to bail out.

A management buyout rescued it but this time round there is no white knight on the horizon.

The company may be just another victim of the times but it did try to succeed by its own rules, and for that it deserves some recognition. It wanted, in its own words, to "take on the fashion world and produce fine shirts in the UK when so many others had decided that clothes could only be made in far-off places".

The tragedy for the owners and their employees is that their ambition could not be realised.

The demise is about more than just the closure of one of the North's last remaining shirt factories. At one stage it is estimated that nearly 20,000 people worked in the shirt-making industry in Derry. Today no single sector, including the city's biggest employers - Seagate Technologies, Du Pont, Stream International or Fujitsu - employ this number.

Derry no longer has a shirt-making industry; the closure of Glenaden Shirts marks the end of a chapter in its history.

Derry has had no choice but to deal with the economic legacy of a manufacturing sector which could not compete against low-cost competitors. It has suffered from high local unemployment but it has fought hard to bring new investors into the area.

The success of attracting global players such as Fujitsu and Firstsource Solutions to the northwest is testimony to Derry's potential. Like the rest of Northern Ireland, it is now in the position where it has to create a new economic agenda. The experience of Glenaden Shirts - regardless of the sector it operated in - shows that companies in the North struggle to compete on production costs.

Many businesses are finding the current environment very challenging. According to Joanne Stuart, chairwoman of the Institute of Directors in Northern Ireland, there are signs of a slowdown in some quarters. "External factors such as rising energy costs and the lack of confidence because of the impact of the credit crunch are beginning to cause a little bit of a slowdown in the rate of growth. In Northern Ireland this is having an effect on the decisions that both businesses and consumers are making."

She believes businesses in the North are not putting big projects on hold because of the current climate, but they are more cautious. "There is no lack of confidence among the business community in Northern Ireland about Northern Ireland. The fact is the business community has more access than it has ever had before to the Ministers who are making the decisions about the economy.

"We now have a First Minister, Peter Robinson, who has just come from the Department of Finance, and has put the economy at the centre of government. He understands that it is the economy that drives everything else. As far as the business community is concerned, we feel the Government is solid - it is not going to go backwards," Ms Stuart says.

But one leading expert says that people are feeling a little uncertain about economic prospects. Philip McDonagh, chief economist with PricewaterhouseCoopers in the North, says that as a result of a dearth of credit and new mortgage lending, property transactions have come to a halt.

"Developers are mothballing plans for new apartment blocks and housing developments, and offering deep discounts for those already completed. Hundreds of construction workers have already lost their jobs, with an instant knock-on effect on retailing and the rest of the North's previously booming service economy."

Belfast-based Mr McDonagh says most people simply do not realise how strong the local economy still is. "Thanks to high levels of public expenditure the North's economy is relatively sheltered from the chill winds of international downturn. If international financial markets regain their confidence, so will Northern Ireland's consumers," he says.

The only problem according to Mr McDonagh is that the longer people in the North perceive there be to an issue with the economy, the greater the likelihood is "that we will talk ourselves into recession".

There will be other firms like Glenaden Shirts which will simply not survive the current economic environment. There are jobs already on the line because of the current spiralling costs/credit crunch scenario, but if as Mr McDonagh suggests the North dwells too heavily on the negatives and not the positives, then "we're really in trouble".