THREADMAKER Coats announced its strategy of disposing of well-known clothing names was paying off.

The group said its decision to focus on thread rather than fashion retail was starting to work. Like-for-like sales of the product rose 11 per cent before reorganisation costs.

The news came a day after the company announced it was poised for a £414m takeover by a consortium led by investment firm Guinness Peat Group.

Uxbridge-based Coats, which employs 200 people making zips in Peterlee and 100 in a thread business in Darlington, completed the sale of high street clothing chains Jaeger and Viyella in January in a bid to stem losses from its fashion retail division which soared to £18m before reorganisation costs last year, compared with just £4.3m a year earlier.

Chairman Sir Harry Djanogly reassured investors the new strategy would continue under its current management and staff after the takeover