A luxury carpet factory that closed its doors last month could become a distribution depot.

The former Hugh Mackay Carpets plant, in Durham, is available to rent and the agents in charge are hopeful the 151,000sq ft site could attract a national retailer or logistics firm to the region.

Matthew McIntosh, of Newcastle property consultants Lambert Smith Hampton (LSH), said several blue chip retailers were looking at potentially relocating their distribution facilities to the region.

"There is a scarcity of modern and large warehouse sites on the market," he said. "This, coupled with the growth in the logistics market place, means there is a dearth of ready-to-occupy sites."

County Durham Development Company believes it also has potential to be the headquarters for a large firm.

Stewart Watkins, CDDC executive director, said: "Ideally, we would wish for the recreation of the jobs lost when Hugh Mackay closed.

"We need to increase our share of the service sector and raise our involvement in the knowledge driven economy."

Hugh Mackay, which had held a Royal Warrant since 1972, ceased production on April 15, with the loss of 138 jobs. The closure came just days after One NorthEast handed over a £195,000 Selected Finance for Investment (SFI) grant to create 120 jobs at the 102-year-old company.

The site owner, a private investment firm, has appointed LSH and rival firm GVA Grimley to fill the vacant building on the Meadowfield Industrial Estate.