Dragons’ Den entrepreneur Sara Davies plans to regain control of Crafter’s Companion, the craft supply company she founded, through a quick pre-pack insolvency deal.
The company, which rose to international fame for its papercraft, art and sewing products, filed a notice of intent to appoint administrators in the Supreme Court after a decline in sales, mounting debt and management failures at its US operations.
Under the proposed restructuring, Davies, 40, will increase her shareholding “significantly” and return to the helm as CEO, securing around 100 jobs. The exact financial terms remain unknown, but her new injection of capital is expected to support efforts to refocus on specialist paperwork, a niche that propelled her start-up from a university bedroom to a multi-million pound success story in 2006.
Crafter’s Companion thrived during the lockdown but suffered a sharp turnaround as inflationary pressures, higher raw material costs and challenging retail conditions took their toll. A slump in U.S. sales, including the collapse of a key TV retail partner, exacerbated losses. Last year revenues fell by more than a fifth to £29.9 million, pushing annual losses to £5.1 million.
Despite fresh capital from Growth Partner and new banking facilities with Santander and HSBC last year, the company struggled to maintain monthly profitability. Growth Partner, founded by HomeServe founder Richard Harpin, was the majority shareholder. The recent decision to serve notice of intention to appoint administrators paves the way for Davies to buy back significant parts of the company’s assets as part of the pre-pack arrangement.
Proponents of pre-pack bankruptcies argue that they can quickly create viable businesses and preserve jobs, while critics argue that they can undermine unsecured creditors and write off debt. Davies acknowledged the controversy but stressed it was necessary to return the company to profitability and protect jobs.
The deal is expected to be approved by the court this week, after which Davies will focus on ‘branding and core product strategy’, with the aim of recapturing the paper craft market where her company first found success. She hopes the streamlined Crafter’s Companion can regain its previous momentum and avoid new layoffs by paying down excessive debt and sharpening its product range.
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 the BBC’s Dragons’ Den since 2019 – when she became the show’s youngest-ever panellist – she has dabbled in presenting, philanthropy and even Strictly Come Dancing. As she returns to Crafter’s Companion, she plans to leverage her entrepreneurial skills to return the company to health and unlock new growth opportunities.