Succession planning is one of the most important, and often most difficult, stages in a business’s lifecycle. For many founders, particularly those who have built a company over decades, the challenge isn’t simply finding a buyer, it’s finding a way to protect the very identity, values, and traditions that have defined the business from day one. The recent announcement that The Entertainer, the UK’s largest independent toy retailer, will transfer to an Employee Ownership Trust (EOT) is a great example of how this can be done.
Preserving a unique ethos
Founded in 1981, The Entertainer has remained a family-owned business for over 40 years. It has a distinct culture, a Christian ethos, long-serving loyal staff, and a clear set of principles, such as not opening on Sundays and donating 10% of annual profits to charity. These aren’t just policies; they are core parts of the company’s identity.
In moving to an Employee Ownership Trust, the founding family has ensured that ownership passes to those who know the business best, its employees. This model means that decisions can continue to be made with the same values in mind, avoiding the cultural shifts that can happen under new, external ownership.
Keeping legacy and loyalty intact
According to the recent BBC article, nearly 400 of The Entertainer’s 1,900 employees have worked there for more than a decade, and around 50 have been with the company for over 20 years. Under an EOT, these employees will not only have a direct stake in the company’s future but also a voice in its direction. That shared ownership fosters commitment, continuity, and a sense of stewardship that can be difficult to replicate in other ownership models.
For business owners concerned about their legacy, an EOT offers a way to “pass the baton” without diluting the identity they have worked so hard to build.
Why an Employee Ownership Trust could be right for your business
While an EOT won’t be the right fit for every company, it can be a suitable option where:
- A business has a strong culture or set of values that the current owners want to preserve.
- There is a loyal and experienced workforce who understand the company inside out.
- The owners want to reward employees while ensuring the long-term sustainability of the business.
As with any succession planning route, there are important legal, financial, and operational factors to consider. The structure needs to be carefully designed to ensure it meets both the commercial goals and the cultural aspirations of the business.
Our advice
At Slater Heelis, our corporate team works closely with business owners to explore all succession options, including an Employee Ownership Trust, and to structure transitions in a way that protects both the company’s financial future and its core values. Where needed, we can draw on our full-service expertise across employment, commercial property, and commercial litigation to ensure a smooth, joined-up process.
If you’re considering your succession strategy and want to explore whether employee ownership could be the right path, our team can guide you from the first conversation through to completion.
Get In Touch
Scott Sands is a Partner and the Head of our Corporate team. He advises on a wide range of corporate matters, including acquisitions, disposals, private equity investments, corporate governance, tax-led structures and inheritance tax planning including family investment companies.
If you’re considering an EOT for your business, get in touch with our Corporate team today. We’ll talk you through your options and provide practical, commercially focused advice tailored to your circumstances.
Call us on 03301 624 681 or fill out our contact form to arrange a consultation.
