The firm of Welch Margetson, founded in London in 1824, was by the 1840s looking for new sources of supply, as the demand for shirts in Britain was so great. The success of William Scott’s business led them naturally to choose Derry, where in 1847 they opened a warehouse in the Waterside. In this warehouse their shirts were cut and then supplied to workers to be made up at home.
In 1850 the firm moved to Foyle Street, where they continued to rely on the outworker system of shirt production. Tjhey adopted the factory system of work when, in 1876, they moved into larger premises, with a frontage of 210 feet, on Carlisle Road. Through its London warehouse, Welch Margetson distributed shirts all over the world. Their factory on Carlisle Road employed a workforce of 1000, while work sent to outworkers gave constant employment to 3000 girls in their homes.