A turnaround investment group linked to Hobbycraft’s recent acquisition has stepped in to save Crafter’s Companion, the loss-making crafting company founded by Dragons’ Den panellist Sara Davies.
The business has been bought via a swift pre-pack administration for £425,000 by entities controlled by Modella Capital, preserving 134 of 148 jobs but leaving creditors facing significant shortfalls.
Crafter’s Companion began life almost 20 years ago in Sara Davies’ York University bedroom. It expanded into an international retailer and wholesaler of paper craft, art and sewing products, though recent years have seen rising losses. Supply chain troubles, the failure of a key teleshopping partner and shifts in market focus led to deficits of £6.7 million and £5.1 million in the past two financial years. Revenues slumped from £38.3 million in 2021 to £29.9 million in 2023.
Debt challenges and the October budget’s higher taxes on employers combined to push the Co Durham-based business to the brink. While Growth Partner, an investment firm established by HomeServe founder Richard Harpin, had injected funds last year, it was unable to reverse Crafter’s Companion’s fortunes. After seeking administration, the business was sold to Modella Capital’s newly formed entities for £425,000.
Davies, 40, remained a director throughout the company’s difficulties but had stepped back from day-to-day control. She has now invested personal funds into the newly structured business and will return as chief executive, having been appointed a director of the Modella entities taking ownership. In an open admission, Davies said management had been “slow to react” to declining sales and spiralling costs, resulting in unsustainable debt.
The rescue deal has left multiple stakeholders out of pocket. Growth Partner and related holding companies face a shortfall of £8.2 million, while unsecured creditors are owed about £7 million. Santander, owed roughly £1.9 million, should receive only a partial repayment.
Modella Capital, which acquired Hobbycraft last summer, is noted for its expertise in turning around retail ventures. Though pre-pack administrations can be controversial — helping to preserve operations and jobs but often wiping out existing debts — supporters argue they enable troubled companies to continue trading under new ownership, safeguarding employment and salvaging at least part of their value.
Davies joined Dragons’ Den in 2019 as the show’s youngest panellist and took part in Strictly Come Dancing in 2021, elevating her public profile and that of Crafter’s Companion. She now hopes that under Modella Capital’s stewardship and her renewed hands-on leadership, the crafting firm can rebuild its market position and reputation.
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Dragons’ Den star Sara Davies’ crafting firm rescued in pre-pack deal