Major UK toy retailer, The Entertainer, is handing over the reins to its 1,900 employees, in a move that rewards and engages employees and preserves the employer’s distinct culture.
Founder Gary Grant has chosen to transfer 100 percent ownership of the company into an employee ownership trust (EOT). His aim is to ensure that staff benefit directly from the chain’s future success through profit-sharing and a greater voice in decision-making.
Grant founded the company in 1981 with his wife Catherine. Since then the business has grown to 160 shops nationwide and partnerships with over 850 Tesco outlets and 140 Matalan concessions.
Grant told the BBC: “If the business had been sold just for money that would not have been passing on the baton in the way in which the family would have wanted.”
In the year to January 2024, the retailer posted pre-tax profits of £6.7m, despite the challenging economic environment.
Christian Wilson, employee ownership and business succession partner at law firm Spencer West, said: “The Entertainer’s decision to transfer 100 percent ownership to its 1,900 employees is not just a heart-warming headline, it’s a live demonstration of why the employee ownership trust model is gaining momentum in UK retail.”
Wilson said EOTs are “more than a tax efficient succession route”, although he agrees that the capital gains tax exemption (0 percent) that comes into play when owners of a company sell a controlling interest (of at least 51 percent) to EOT is a “powerful enabler”.
The trust structure creates alignment between employee interests and organisational performance. Under the EOT model, staff can receive up to £3,600 a year tax-free , while the Grant family will receive payment for their shares over time from company profits, Wilson explained.
The retailer emphasised its Christian ethos, which includes remaining closed on Sundays and donating 10 percent of annual profits to charity, and said this will remain in place, protected by the governance of the trust.
Wilson added: “The Entertainer’s case is particularly compelling because it couples financial participation with strong values. The business will remain closed on Sundays in line with the Grant family’s ethos, now safeguarded by the trust structure. This demonstrates how EOTs can protect cultural identity as well as commercial independence.
“When employees are beneficiaries, not just wage-earners, engagement rises, turnover drops, and the business becomes more resilient to external shocks.”
