PROFITS at pillow and quilt manufacturer Northern Textiles, which employs about 200 people in Burnley, have been hit by rising costs and increased competition.

The firm's parent company, French plc, said the difficult trading conditions affected the group's financial results.

Operating profits for the group in the year to the end of September were £739,000, down from £1,066,000 in the previous 12 months.

Northern Textiles founder and now chief executive of French Bill Gleave, said : "This has proved a more difficult year than we had hoped for French and the textile sector in general.

"We have seen good progress in two out of three of our operations and have continued strengthening the management capability of the group.

"Northern Textiles has suffered from rising costs against the background of a very competitive market, which has affected its profitability.

"It remains our aim to establish the group as a growth business in the branded household product sector. As and when we are satisfied that the profit growth prospects for the existing businesses are secure, we will renew our review of options for expansion."

Sales for the household furnishings and textiles group during the year were £21.9 million, up six per cent on the previous year.