By Katie Hunt
Business reporter, BBC News, Lea Bridge, Derbyshire
John Smedley has made garments in Derbyshire for over 200 years
The blare of a factory bell signals the end of lunch, puncturing the silence in this tiny village as it must have done for centuries.
Workers reluctantly stub out their cigarettes and make their way across the narrow street back to the clatter of knitting machines in the heart of the factory.
Nestled deep in the Derbyshire countryside, knitwear manufacturer John Smedley has survived the test of time.
Founded at Lea Bridge in 1784, 13 years after Richard Arkwright established the first water-powered spinning mill two miles down the road in Cromford, it claims to be world's longest running factory manufacturer.
The business of making things is fast becoming a memory for many in the West, especially the UK, but John Smedley is no forgotten relic of Britain's industrial past.
It has a thriving business manufacturing luxury knitwear favoured by celebrities including Victoria Beckham, Tom Cruise and Madonna. It has 450 employees and made £13m in sales in 2007.
It is one of a number of UK manufacturers who have been able to overcome the challenges posed by low-cost countries such as China and India, where the bulk of the world's clothes are now made.
Despite its reputation as a twilight industry, the UK is still the world's fifth-biggest manufacturer.
Operating in a low-volume, niche market, the key to John Smedley's survival has been to concentrate on quality rather than price, says Dawne Stubbs, the company's brand manager.
The fine-knit Merino wool and sea-island cotton cardigans, sweaters and tops John Smedley produces retail for about £100 each.
John Smedley's luxury knitwear is favoured by celebrities
It exports 70% of what it makes, primarily to Japan as the folders full of clippings from Tokyo fashion magazines in the company's reception bear witness.
"It is expensive to manufacture in the UK - let's make no bones about it," says Ms Stubbs.
"But we feel there would be a huge loss if we didn't manufacture here. We've been on this site for 224 years and that's a lot of heritage to throw away.
"The skills we have here, that have been passed through generations of families, are worth keeping. They contribute to the product and to our brand."
A tour of the factory reveals the level of workmanship that goes into each garment.
It takes three cones of cotton make a dozen garments
Merino wool is imported from New Zealand and each piece of knitwear can be traced back to the sheep station from which it was sourced.
Midnight blue and black panels, for the Autumn collection, roll off long rows of Italian-made Protti knitting machines.
Knitters train for between six months to two years to operate the machines. They earn from £300 to £400 a week.
"I like the people and it's good money," says Shane Pugh, raising his voice above the clatter of the machines and to penetrate the ear plugs that everyone on the factory floor has to wear.
He says he has no qualms about working in an industry that has seen a huge number of redundancies in recent decades. His father, mother and brother all work for John Smedley.
Technical manager John Mumby lingers longest at the quality control room, keen to illustrate why John Smedley garments command such high prices.
Trained knitters earn between £300 to £400 a week
Here, he shows how each garment is tested for colour fastness, pilling and shrinkage.
Three one-hour cycles in the company's specially adapted washing machines are equal to 27 washes in a regular machine.
The company's Georgian infrastructure is put to good use in the oldest part of the factory where garments are softened using the water from three natural springs on the hillside.
They are then steam pressed into shape before the neck trims, buttons and labels are applied by hand.
It has not always been smooth sailing for John Smedley.
The company made a loss in 2002 and 2003 after it was forced to close its spinning division, with the loss of a substantial number of jobs.
It used to supply woollen yarn to customers, including Marks & Spencer.
"M&S walked into all their suppliers and demanded a 20% reduction in raw material and final product," says Ms Stubbs.
The manufacture of textiles in the UK has halved in the past two decades.
At that time, John Smedley discussed the idea of offshoring production, as rivals shut their UK factories.
But they decided against it after finding a move to China would only make each John Smedley garment about £8 cheaper.
The company is also grappling with rising raw material and energy costs, and with currency fluctuations.
The pound's rise against the yen in recent years has made its products 20% more expensive.
And while the pound has weakened significantly against the euro and yen in recent weeks, Ms Stubbs says it can take 18 months for that to be felt in business terms.
John Smedley's biggest challenge will be to find the highly-skilled staff needed to produce the garments.
Unlike many regions of the UK, migrant labour is not readily available and younger people do not view manufacturing as an alluring career option.
To partially address the skills shortage, the firm recently introduced new Japanese machines, worth £125,000 each, that can knit a whole garment in about an hour.
Like many of Smedley's workers, Mr Mumby is due to retire soon.
Following in the footsteps of his father, a Bradford mill manager, he is proud to have spent 50 years in the textile industry.
But he knows he is lucky to have survived in a sector that has seen its output halve over the past two decades.
"It's hard to attract new staff," he says.
"John Smedley may pay well, but if you've been made redundant three or four times before, you'd think twice about working here."