There was a major setback in 1859 when Hine & Mundella's factory was greatly damaged by fire, but it was soon rebuilt and returned to operation with the advantage of newer and more powerful machines, in large part paid for by the company's insurers. Hine and Mundella continued to prosper. They opened factories in Loughborough in Leicestershire, England in 1859 and Chemnitz, Saxony in 1866. A London warehouse at the centre of the textile trade in Wood Street in the City of London was acquired.