Reflections on Sarah Raven

Named after its founder, the author and broadcaster, the Sarah Raven business is a provider of sustainable gardening and lifestyle products including seeds, seedlings, plants and bulbs, as well as gardening kits and items for the home. We launched a £1.25m bond offer in June 2023 to support plans for growth and to help meet the remaining payment obligations due for Rookery Farm nursery, which the company acquired in 2022. We were also motivated by the strong values alignment, particularly with regards to the company’s environmental credentials.

At the time of the bond offer launch, Sarah Raven was trading well despite the decline in the horticultural sector post-Covid. However, due to a combination of factors over the course of 2024 and early 2025, the business entered financial difficulty and was no longer able to meet its financial obligations to creditors.

As soon as the directors became aware of the situation, they appointed restructuring specialists. A number of factors contributed to the financial decline, including challenges with the implementation of a new fulfilment software system, an unexpected refund demand from HMRC, difficulties delivering anticipated savings from the purchase of the new nursery and margin pressures in a heavily discount-driven competitive environment. Having explored several options and having marketed the business for sale, the administrators determined that an acquisition of the trade and assets (rather than the shares) of the business by Sarah Raven and financial backers via a management buyout would represent the most favourable outcome for existing creditors.

In August we wrote to the directors and the administrators on behalf of bondholders to express dissatisfaction with the factors that led to the company failure and the absence of communication around the financial distress. The directors responded comprehensively, expressing sympathy for the bondholders; whilst it won’t allay bondholders’ frustrations, the directors, their family and many close friends were also financially impacted by the collapse. We anticipate that the administrators will disclose what, if any, recovery will be available to bondholders in the year ahead.

While the number of our crowdfunding investments that default is low, the Sarah Raven situation illustrates how investing into individual companies carries risk. Part of our responsibility in promoting investment offers is to undertake due diligence on the company issuing the investment - as outlined in this article - and to explain the risks we’ve identified in the offer document.

We also work to ensure that investors understand the risk they take when they invest. We do this through the appropriateness assessment at the point of registration, highlighting the generic risks of investments throughout the investor journey, and educating investors through articles such as this one.

We always encourage investors to spread risk by investing across different products – and ideally covering a mix of sectors. Changes to ISA regulations in April 2024 mean it’s now possible to hold an Innovative Finance ISA with more than one provider, helping to broaden the range of potential opportunities open to investors.

At Triodos Bank, we aim to provide a range of investment types (including bonds, equity and community shares) in a range of sectors, all of which support the transition to a sustainable society. You can find out more about Triodos Bank’s approach to impact here.