The Scottish cashmere industry has faced increased competition

John Laing, of Hawick, which has had a turnover of �3.5m and employed 95 people, is one of the country's leading producers of cashmere garments.

Increased competition from foreign producers like China has been blamed for the move, involving 52 job cuts.

The firm will continue to trade while a new buyer is sought.

The joint receivers, Blair Nimmo and Tony Friar of KPMG Corporate Recovery, said they had to make staff redundant with immediate effect.

Mr Nimmo said: "The business had been incurring significant losses over the last few years, largely due to some bad debts and increased foreign competition.

Buyer search

"Recent cash flow difficulties left the directors with no choice but to request the appointment of receivers."

However, Mr Nimmo said he was optimistic the firm could survive.

"John Laing of Hawick is a long-established business with an excellent reputation," he said.

"We are hopeful that with the support of customers, suppliers and the remaining 43 members of staff, we can preserve the business as a going concern and quickly find a buyer, therefore safeguarding as many of the remaining jobs as possible."

The firm is part of the Scottish Cashmere Club which was established eight years ago to help sustain growth in the country's knitwear industry.

The cashmere sector contributes more than �100m to the Scottish economy annually and employs about 4,000 people.