Published on May 14th, 2019 | by The GC Team0
Richer reward for loyal staff
Julian Richer, founder and 100% owner of the highly successful Hi-Fi, TV and Home Cinema retail chain Richer Sounds, has announced he is handing over control of the business to his staff. He has transferred 60% of his shares into a trust owned by employees.
He is due to receive an initial £9.2 million from the company for his shares, but in a further acknowledgement of their contribution to the success of the business, he is giving £3.5 million of that back to them via a bonus of £1,000 for every year they have worked for Richer Sounds. The bonus, which is, said Mr Richer, “to thank loyal, hardworking colleagues,” will not include any of the company’s nine directors who earn “six-figure salaries.”
As long as six years ago, as reported on this website (20th November 2013), Mr Richer, who has no children, had already announced that he was bequeathing the company to his employees in his will to protect its unique culture. At the time he explained: “If I could find someone I felt would keep it going, I’d be more inclined to sell it. But then the worry is that I’d sell it and then someone might sell off all the freeholds or do something terrible to it that it would go bust in six months, and that’s my life’s work. So I’d rather leave a team in place.”
Mr Richer, who is just 60, explained that the decision to make the changes now is because “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.”
His business philosophy, set out in his 2001 book The Richer Way, has been described as “unorthodox,” but appears to have built success on nurturing a happy, committed workforce. He does not use zero-hours contracts, the company’s pay gap actually favours women, employees have access to company holiday homes around the world, and 15% of profits are donated to charities.
It appears Mr Richer believes employee ownership is the best way to protect the company from outside aggressive takeover activity, and that the business is safer in the hands of its staff. “They know the business, and especially our rather unusual culture, extremely well,” he said, “and the business is therefore far more likely to flourish under their own steam because of this. I feel an incredible loyalty to my hardworking colleagues and they should receive any benefit from running the business once my time is up as opposed to just selling to the highest bidder.”
Mr Richer will remain as MD “for the time being,” and day-to-day operations will continue to be run by his designated successor and current chief executive Julie Abraham.