Sara Davies, the Dragons’ Den entrepreneur, is set to regain control of Crafter’s Companion, the craft supply business she founded, through a fast-tracked pre-pack insolvency deal.
The company, which gained international acclaim for its paper craft, art, and sewing products, filed a notice of intention to appoint administrators at the High Court following a fall in sales, mounting debts, and management missteps in its US operations.
Under the proposed restructuring, Davies, 40, will “significantly” increase her shareholding and return to the helm as chief executive, safeguarding about 100 jobs. Exact financial terms remain undisclosed, but her new capital injection is expected to underpin efforts to refocus on specialist paper craft, a niche which first propelled her start-up from a university bedroom in 2006 into a multimillion-pound success story.
Crafter’s Companion had thrived during lockdown, only to face a sharp reversal as inflationary pressures, higher raw material costs, and challenging retail conditions took their toll. A downturn in American sales, including the collapse of a major TV shopping partner, exacerbated losses. Last year, revenues dropped by more than a fifth to £29.9 million, deepening annual losses to £5.1 million.
Despite fresh equity from Growth Partner and new bank facilities with Santander and HSBC last year, the business struggled to remain profitable on a monthly basis. Growth Partner, set up by HomeServe founder Richard Harpin, had been the majority shareholder. Its recent decision to file the notice of intention to appoint administrators paves the way for Davies to buy back key parts of the company’s assets as part of the pre-pack arrangement.
Proponents of pre-pack insolvencies argue that they allow viable businesses to emerge swiftly and preserve employment, while critics contend they can undermine unsecured creditors and write off debt. 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 “branding and core product strategy”, aiming to recapture the paper craft market where her company first found success. She hopes the streamlined Crafter’s Companion can recover its former momentum and avoid additional layoffs by shedding excessive debt and honing its product range.
Davies, who became a millionaire within a year of graduating from the University of York, stepped back from daily operations over a year ago but retained a minority stake. Best known for her role on 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. Now, returning to Crafter’s Companion, she intends to harness her entrepreneurial credentials to restore the business to health and unlock new growth opportunities.