Dragons’ Den businesswoman Sarah Davies is set to regain control of Crafter’s Companion, the craft supply company she founded, through a fast-track bankruptcy deal.
The company, which has gained international fame for its paper, art and sewing products, has filed a notice of intent to appoint directors with the High Court after falling sales, mounting debt and management errors at its US operations.
Under the proposed restructuring, Davies, 40, would “significantly” increase her stake and return to the role of chief executive, maintaining around 100 jobs. Exact financial terms were not disclosed, but the new capital injection is expected to support efforts to refocus on specialist paper crafts, the area that first propelled her startup from a university bedroom in 2006 to a multi-million pound success story.
Crafter’s Companion had thrived during lockdown, but faced a sharp reversal as inflationary pressures, rising raw material costs and difficult retail conditions led to huge losses. Declining US sales, including the collapse of a major TV shopping partner, exacerbated the losses. Last year, revenue fell by more than a fifth to £29.9m, deepening annual losses to £5.1m.
Despite new shares from Growth Partner and new banking facilities with Santander and HSBC last year, the company has struggled to remain profitable on a month-on-month basis. Growth Partner, created by HomeServe founder Richard Harbin, was the majority shareholder. Its recent decision to file a notice of intention to appoint directors paves the way for Davies to buy back key parts of the company’s assets as part of advance arrangements.
Proponents of pre-insolvency claim that they allow viable businesses to emerge quickly and maintain jobs, while critics claim that they are able to undercut unsecured creditors and write off debts. Davies acknowledged the controversy but insisted it was necessary to return the company to profitability and protect jobs.
The deal is expected to be approved in court this week, after which Davies will focus on “brand and core product strategy”, aiming to recapture the paper craft market where her company first found success. It hopes that the streamlined Crafter’s Companion company can regain its previous momentum and avoid additional layoffs by eliminating excessive debt and refining its product lineup.
Davies, who became a millionaire within a year of graduating from York University, stepped back from day-to-day operations more than a year ago but retained a minority stake. Best known for her role on BBC show Dragons’ Den since 2019 – when she became the show’s youngest ever cast member – she has dabbled in presenting, charity work and even Strictly Come Dancing. Now, back at Crafter’s Companion, she intends to harness her entrepreneurial credentials to restore the health of the business and unlock new growth opportunities.