A turnaround funding group linked to Hobbycraft’s latest acquisition has stepped in to save lots of Crafter’s Companion, the loss-making crafting firm based by Dragons’ Den panellist Sara Davies.
The enterprise has been purchased through a swift pre-pack administration for £425,000 by entities managed by Modella Capital, preserving 134 of 148 jobs however leaving collectors going through vital shortfalls.
Crafter’s Companion started life virtually 20 years in the past in Sara Davies’ York College bed room. It expanded into a global retailer and wholesaler of paper craft, artwork and stitching merchandise, although latest years have seen rising losses. Provide chain troubles, the failure of a key teleshopping companion and shifts in market focus led to deficits of £6.7 million and £5.1 million previously two monetary years. Revenues slumped from £38.3 million in 2021 to £29.9 million in 2023.
Debt challenges and the October price range’s larger taxes on employers mixed to push the Co Durham-based enterprise to the brink. Whereas Progress Associate, an funding agency established by HomeServe founder Richard Harpin, had injected funds final yr, it was unable to reverse Crafter’s Companion’s fortunes. After searching for administration, the enterprise was bought to Modella Capital’s newly shaped entities for £425,000.
Davies, 40, remained a director all through the corporate’s difficulties however had stepped again from day-to-day management. She has now invested private funds into the newly structured enterprise and can return as chief government, having been appointed a director of the Modella entities taking possession. In an open admission, Davies stated administration had been “slow to react” to declining gross sales and spiralling prices, leading to unsustainable debt.
The rescue deal has left a number of stakeholders out of pocket. Progress Associate and associated holding firms face a shortfall of £8.2 million, whereas unsecured collectors are owed about £7 million. Santander, owed roughly £1.9 million, ought to obtain solely a partial reimbursement.
Modella Capital, which acquired Hobbycraft final summer season, is famous for its experience in turning round retail ventures. Although pre-pack administrations will be controversial — serving to to protect operations and jobs however typically wiping out present money owed — supporters argue they allow troubled firms to proceed buying and selling below new possession, safeguarding employment and salvaging at the very least a part of their worth.
Davies joined Dragons’ Den in 2019 because the present’s youngest panellist and took half in Strictly Come Dancing in 2021, elevating her public profile and that of Crafter’s Companion. She now hopes that below Modella Capital’s stewardship and her renewed hands-on management, the crafting agency can rebuild its market place and fame.
