The company was founded by former Dragons' Den entrepreneur Rachel Elnaugh, who developed the idea for Red Letter Days after creatively packaging cricket tickets to give to her father.

[5] After expanding via supermarket distribution, Red Letter Days went into administration on 1 August 2005;[6] the remaining assets and inventory were bought by fellow Dragons' Den entrepreneurs Theo Paphitis and Peter Jones.

[9] ITV1's Tonight Programme offered a more critical explanation of the demise of Red Letter Days, citing unpaid suppliers and disappointed purchasers.

Elnaugh blamed the company's bankers, who placed £3 million in a bond they refused to release for use by the firm, despite the fact that some of it may have related to vouchers that had expired and were not recoverable against the business.

Mrs. Elnaugh admitted in her book Business Nightmares that her finance team had lost track of the company's voucher liabilities and its debts to suppliers.