Felton, 44, will remain as managing director, a post he has held for the last five years.

The £2 million deal includes £340,000 in cash for the entire share capital of Gul, and bank debts of just over £1.6 million.

"Hawtin disposed of Gul because it was keen to reduce its borrowings and we've managed to buy the company for an excellent price, " said Felton.

According to Felton - an exmerchant banker - the £1.6m debt was a tax issue for the group.

"The deal was struck at £2m, " he told BB . "If they had taken the £1.6m debt out, we would have paid them £2m for the shares."

Support for the deal came from Lloyds TSB, with financial advice provided by Soloman Hare and legal advice from Burges Salmon.

The move, says Gul, will secure the company's future in Cornwall, where it was founded 35 years ago. The company employs 50 people and has a turnover of £6.3 million.

"The deal gives us more flexibility to pursue emerging markets more aggressively, " said Felton, "especially in North America where we see huge potential."

Felton went on to say Gul was seeing growth in its lifestyle clothing ranges and the marine market.

"We intend to grow the business substantially over the next three years and are looking to take on more staff, " he said.