Staff at Richer Sounds will receive a £3.5m windfall after being given a 60% stake in the business.
Founder Julian Richer announced he would put the 60% shares in the electronics retail business into an Employee Ownership Trust to mark his 60th birthday. Richer set up the company when he was 19 and it now has more than 500 staff.
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Each employee will receive £1,000 for every year they have worked there, which will mean an average payout of £8,000. A number will receive more: one has worked there for more than 40 years while 39 employees have been at Richer Sounds more than 20 years.
The company will pay Julian Richer an initial £9.2m for the stake but he will give back £3.5m to staff to cover the pay-outs.
He said: “My father dropped down dead at 60 so I am very keen for this to happen in my lifetime.
“I felt the time was right, rather than leaving it until I’m not around, to ensure the transition goes smoothly and I can be part of it. I still really, really care but it is time for the next generation.”
Richer has long been a champion of fair work: in 2001 he published a management book called The Richer Way, which discusses the importance of secure, well-paid jobs and a happy workforce as the key to commercial success.
The company also reported a gender pay gap in favour of women for both 2017 and 2018. It has annual sales of almost £200m.
The most famous company to embrace the employee ownership model is John Lewis Partnership, but other companies to adopt the model include organic vegetable delivery company Riverford and animation studio Aardman.
Richer said the trust would operate according to a set of principles to ensure it sticks to the values set by the founder. The company will set up a colleague advisory council to represent the interests of employees.
Deb Oxley, chief executive of the Employee Ownership Associtation, said: “We congratulate Richer Sounds on its transition to employee ownership: another great brand bringing employee ownership to the high street. We’re delighted to see it secure its future independence with a focus on its people and an eye on the future world – a world with a more inclusive economy and where more businesses are doing well while doing good.”
“With this high-profile transition, the continued growth in the pipeline for employee-owned businesses and growing support from our partners it feels like we are at a tipping point for the sector to really take off.”