RUMOURS circulating in the City earlier this week that clothing company William Baird was up for grabs were confirmed last night after the group announced it was selling its BMB menswear business for £19m.

The firm which is trying to sue Marks & Spencer over the loss of a supply deal, announced the terms which will see the creation of the newly formed BMB Menswear Ltd business.

The BMB business employs around 1,500 staff includin around 100 in Hartlepool. Chief executive Peter Lucas said there were no plans for any redundancies.

The group, which is in talks to take itself private in a £88m deal following the loss of the M&S business, is to sell BMB in a management buy-out deal to a team including Mr Lucas.

The deal also has backing from textile entrepreneur Harold Tillman.

BMB makes men's formal suits, both bespoke and ready-made, under a variety of trademarks including Chatsworth Menswear, Centaur, ER Hammersley, Limehaus and Gibson.

It also has licence arrangements in place with famous designer and TV name Jeff Banks for the clothes range 'Studio by Jeff Banks'.

However, the business has seen tough trading in the current year and sales have been flat, while margins have been eroded by discounting.

The news will still leave around 150 textile workers in the region facing an uncertain future.

Baird still retains a corporate clothing factory in Skelton, East Cleveland.

The company is currently fighting for compensation from Marks & Spencer over the loss of a 30-year contract which forced it to lay off 4,500 staff and close 14 factories.

The £53m compensation battle with M&S is expected to go before the Appeal Court in January, after the High Court ruled against William Baird's claim that there was an implicit contract between the two parties which M&S broke.