The founder of Richer Sounds passes the control of a hi-fi and television company to the staff | Business

The founder of Richer Sounds entrusts the staff with the control of the retail chain of television channels and hi-fi systems, which will also give employees a big cash bonus.

On Tuesday, Julian Richer will announce to the staff that he has transferred 60% of his shares into a trust in the John Lewis. Richer, who has just turned 60, said "the time has come" to pbad the torch to the 531 employees of the chain.

"My father died at 60, so I'm very keen to see that happen in my lifetime," Richer said. "I felt it was a good time, rather than leaving it until I was gone, for the transition to be smooth and to be part of it. I still really care, but the time has come for the next generation. "

The company will pay Richer an initial amount of £ 9.2 million, but the businessman will return £ 3.5 million to his staff, who will receive £ 1,000 for each year worked at the retailer.

The average payment will be £ 8,000, but 39 employees, with more than 20 years of service, may receive exceptional profits. The nine directors of the company, who according to Richer earn six-figure salaries, are not included in the bonus pool: "It's to thank our loyal colleagues, who work hard."

With annual sales of nearly £ 200 million, Richer Sounds is one of the largest UK companies to have adopted employee share ownership in recent years.

According to the Employee Ownership Association (EOA), more than 350 companies have now adopted the model, and at least 50 others are preparing to do the same. Recent converts include Riverford, the organic vegetable box company, and Aardman, the Wallace & Gromit-based Bristol-based animation studio.

Unorthodox businessman, with his long hair and his sideline as drummer of Ten Millennia's funk band, Richer is commended for the success of Richer Sounds that he founded in 1978 at the 39, age 19 His business philosophy, set out in his 2001 book management The Richer Way, the champion that offers secure, well-paying jobs and a happy workforce, is the key to long-term business success.

Richer Sounds, which has 53 stores, refuses to use zero-hour contracts and is one of the 14% of companies with a favorable gender pay gap. Employee benefits include access to corporate vacation homes around the world, including European cities such as Paris, Venice and Barcelona. He donates 15% of the profits, which last year amounted to 9.6 million pounds sterling, to charity.

Richer will remain for the moment as General Manager. Day-to-day operations are already overseen by Executive Director Julie Abraham, who will succeed her. Richer and Retailer President David Robinson are two of the four directors of the new Richer Sounds Trust.

Robinson, who has been with the company for 35 years, said the change of ownership would make colleagues feel even more connected to the company: "They have a real interest in the success of the company and can be proud to know that they are shareholders. for the future."

Richer, who has no children, had written the plan in his will, but began preparations two years ago to prevent his wife Rosie from overseeing the process. "I think that's the thing for adults to do and, psychologically, pbading control is important because I'm on this golden treadmill for 40 years," he said.

The trust will operate according to a set of principles designed to ensure that it continues to follow Richer's course over the last 40 years. A peer advisory committee will be created to represent the interests of employees and shape the future of the company.

Richer said the arrangement meant the company would avoid an "aggressive" external investor who "would change strategy".

If Richer Sounds continues to be successful, Richer will receive additional payments over a 15-year period, but would have made more money if he raised a sign for the sale. His 100% stake accounted for just over half of his £ 160 million fortune in the annual Rich List survey.

"I feel incredible loyalty to my hard working colleagues. They should take a definite advantage of running the business once my time is up, instead of just selling to the highest bidder, "Richer said. "They know extremely well about trade, and especially our rather unusual culture, and are therefore much more likely to thrive on their own because of that."

The changes at Richer Sounds do not mean that the Yorkshire-based entrepreneur, who is currently advising Marks & Spencer on how to change his dysfunctional corporate culture, is about to retire.

He currently funds Taxwatch, a nonprofit organization that looks at the opaque finances of multinational corporations, and plans to finance a typical scenario against zero-hour contracts.

ESO CEO Deb Oxley suggested that employee ownership is reaching a critical point: "We are delighted to see Richer Sounds secure its future independence by focusing on its employees and employees. keeping an eye on the world of tomorrow – a more inclusive world. economy and where more companies are a force for good. "

What is employee ownership?

Employee-owned businesses belong wholly or largely to their employees. The shares can be owned by individuals or collectively through an employee trust – or a mix of both. A company will also have a mechanism to represent its views, such as a board, board of directors or employee representative. Decisions are always made by a board, but employees have a say in operational and strategic matters. It is said that the model allows companies to plan their investments and growth over a longer horizon rather than having to meet the short-term demands of external shareholders.

Other examples of employee-owned businesses

John Lewis Partnership, owner of the eponymous and Waitrose department stores, is the largest UK-owned and owned company with 83,900 employees or "partners". The pioneer businessman John Spedan Lewis surrendered his property rights in 1929 to allow future generations to conduct an "experiment of industrial democracy."

Riverford Organic Farmers made the transition last year when its founder, Guy Singh-Watson, gave up more than 76% stake in a trust. Its 650 employees will share 10% of annual profits generated by the turnover activity of 60 million pounds, which delivers nearly 50,000 boxes of products per week. The company pays Singh-Watson £ 6 million over four years.

Last year, the owners of Aardman, the Bristol-based entertainment studio based behind Wallace & Gromit, Shaun the Sheep and Morph, used a trust to pbad a 75% stake to 140 employees and freelancers. The move was intended to protect the independence of the company and its leaders will continue to receive a share of the profits.

Wilkin & Sons, a 134-year-old jam maker from Esbad, owns almost half of the company through a trust. Many of the staff members live in corporate premises on the grounds surrounding the Tiptree plant, the profits from the transactions to buy shares for the trust. Profits are also used to support local projects, including sports and arts organizations.