After a poorly made strategic and financial choice of expanding via supermarket distribution, Red Letter Days went into administration in 2005; the remaining assets and goods were bought by fellow Dragons' Den judges Peter Jones and Theo Paphitis. Although Elnaugh was at the helm before and at the time of the company's failure just days after the birth of her fourth child, she blames the problems on the actions of the last CEO who she appointed in 2002, while she took a non-executive role.
ITV1's "Tonight Programme" had more critical explanation of the demise of Red Letter Days, including unpaid suppliers and disappointed purchasers. The programme suggested the business model failed to escrow or earmark supplier payment equity, instead using it for working capital.
As a result of disputes with various Dragons (Jones, Paphitis and Duncan Bannatyne), and the resulting uncomfortable position of the BBC if it allowed a perceived "failed" business person to be on a business panel, she agreed to leave the "Dragons' Den" panel.
Elnaugh is now working as a venture capital adviser and business speaker. She has also written a book about "the entire business life cycle and the kind of lessons you learn along the way - through bitter experience - not just through my own experiences but through the eyes of the other entrepreneurs". Reviewed by Jonathan Guthrie in the Financial Times newspaper
It is unlikely that Ms Elnaugh would have created a business with £17m in turnover without the towering self-belief that also makes her such a sore loser. When she was starting out, she endured countless rejections from potential business partners. Advised by friends and family to "go back to accountancy", she stuck to her guns instead. "Interestingly," she notes, "every person or company who was abusive to me in those early years either went out of business or came to a sticky end". Including, she claims, a hotelier killed in a car smash. Scary lady.
Having put her Sandhurst home up as security in the attempt to save Red Letter Days, Elnaugh presently lives in Bakewell, Derbyshire with her five sons: three from her first marriage - Mark, Paul, Eddie; and two from her second - Michael and Jack.