ONE of Burnley's largest textile operations has been put up for sale by threads and clothing group Coats as part of a radical restructuring of its business.

The Dorma factory, which is part of Coats' loss-making Bedware division, is included in a multi-million-pound sell-off that also features two of the UK's best-known fashion brands -- Jaeger and Viyella.

Chief executive Martin Flower said the group would now concentrate on building up its sewing threads business.

The bedwear business employs a total of 1,700 staff with plants Burnley, Northern Ireland and Derbyshire.

Around 300 people are employed at the Oak Bank Mill complex in Burnley

Losses at the Bedwear arm spiralled to £1.1million in the six months to June 30 from £200,000 last year on lower sales to Marks & Spencer.

A question mark has been hanging over the Burnley factory for the past three years as Coats' textile businesses have contracted in the face of cheap imports and increased competion.

Dorma has been operating in Burnley since 1975 when it began producing pillow cases and other bed linen.

In addition to its extensive contracts with Marks and Spencer, it also produces under its own Dorma brand.

Mr Flower, in a statement announcing the company's financial results for the first six months of the year, said he expected the disposals to be completed within the next six months.

With the economic downturn affecting Coats' core threads business, group pre-tax profits fell 6 per cent to £4.7million in the half-year. Mr Flower said a deal for both Jaeger and Viyella could fetch £50 million, but added he would also consider separate transactions.

No prospective price has been set for the bedware business.

Coats is already the world's largest supplier of industrial sewing thread. It also sells into the consumer sector under the Red Heart brand.

Operating profits within the threads business tumbled from £41.5 million to £28.8 million in the first half of the year.