Red Letter Days enters administration

Concerns yesterday that gift experience business Red Letter Days was about to
enter administration have been confirmed, and Kroll has been appointed as
administrators.

Months of ‘accounting issues’ and rows with an increasing number of suppliers
have been blamed for the company’s collapse, founded by Rachel Elnaugh, one of
BBC2’s ‘dragon’s’ on the entrepreneur talent show Dragon’s Den.

Three months ago Elnaugh began positioning the company for a flotation and in
May announced the appointment of Sir Rodney Walker as chairman – who is also the
chairman of Donnington Park racing circuit. He was to lead the company to market
‘within the year’.

However, Andrew Pepper and Alastair Beveridge, of Kroll’s corporate advisory
and restructuring group, were called in late yesterday afternoon and appointed
joint administrators of RLD. They will oversee the sale of the business.

RLD was founded in 1989, has a turnover of approximately £20m and employs
about 130 staff. Kroll said that the company was placed in administration as a
result of ‘cashflow difficulties, which could only be resolved with further
investment’.

A Kroll statement said that it had already received interest from a number of
third parties and that it would seek to progress this to ‘secure the best
solution for creditors’.

It added that a quick sale was ‘imperative’ in order to maintain the support
of the suppliers that provide the experiences to RLD’s customers.

Pepper, said: ‘Red Letter Days has an outstanding brand and position in the
gift experience market and this will make the business an attractive opportunity
for investment by interested parties.

‘Placing the company in administration is a protective measure, necessary to
hold the business together. The administration will provide us with the time to
finalise negotiations for a going concern sale of the business.

‘However, we are very keen to sell this business in short order, as any
consumer-facing business can quickly lose value if its customers lose confidence
in the brand and we will be looking to act very quickly to prevent this from
happening.’