The craft supplies company launched by Dragons’ Den entrepreneur Sara Davies has been investing for the future, despite falling to a loss in tough trading last year.
Crafter’s Companion, based in Newton Aycliffe, County Durham, sells paper crafting tools and supplies across the UK and in countries around the globe, having been launched by Mrs Davies in 2005 when she was at York University. The firm, which also has an office in California where the American subsidiary business is based, has now published accounts for the year ended March 31, 2022, showing how group sales fell 1% from £38.3m to £37.8m. Meanwhile operating profit in 2021 of £500,000 fell to a loss of £1.2m, as it battled rising costs.
Despite the various cost pressures – including rising raw materials, shipping and energy prices – the company has big growth ambitions this year, and has expanded its warehouse at Newton Ayclife and also created new jobs to capitalise on its position in the market. CEO Simon Davies, Sara’s husband, revealed in the accounts report how the UK, European and US crafting market remains competitive despite all of the global and economic challenges that the year has presented.
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In the report, he said: “We continue, as we have done, to invest in sound product development to keep our pricing competitive despite raw materials increases several times during the year. Maintaining affordable pricing is key in ensuring that we strengthen our brand awareness.
“We continue our drive to innovate, developing and launching new products across our product portfolio to sell across our multiple sales channels. These products are designed and packaged for the global marketplace to ensure they can be sold in the UK, Europe and the US markets without the need for repurposing or redesign of packaging.
“In the UK the sales decrease was predominantly due to two major factors – our major UK TV shopping customer went into administration in Q4 leading to a poor last three months sales performance and a debt write-off, giving rise to a cash impact in total of circa £0.6m, (and) challenges across UK wholesale due to customers being overstocked and having the wrong stocks at the wrong time due to the impact of Covid.”
Mr Davies said the firm saw stronger performance from its retail stores due to there being no government-imposed lockdowns, and the global e-comm sales strengthened with increased trading activity to the US and the launch of its global Spectrum Noir website. This led to revenue growth of 12% year-on-year, helping to offset some of the challenges the firm faced.
The results were also affected by sizeable increases to inbound container shipping – up £1.4m year-on-year – and outbound postage and carriage costs, which were up £400,000 year-on-year, impacting in year group profitability by £1.8m.
Mr Davies added: “Despite this being another challenging year in our growth plan, we have continued to rationalise the business to stay as lean as we can on controllable costs whilst still keeping a close eye on positioning the right staffing structure to deliver the future growth plans. As a result of these changes UK staff numbers have increased from 169 to 185 and US from 32 to 36 taking our global employee base to 221 as of 31 March 2022.”
Looking ahead, the firm is expanding product development into new markets, with a key aim to continue to grow its global online presence offering a one-stop shop of crafting products to a global market.
Following publication of the accounts, Mr Davies said: “While the last couple of years have been challenging for most businesses, Crafter’s Companion has looked towards the exciting future of the international craft market and the opportunity it brings. To support our plans, we have heavily invested in the company across the board including our team, our infrastructure and a new global fulfilment centre.”
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