Entertainer founder gives toy shop chain to staff

The founder of the UKs biggest toy chain, the Entertainer, is handing over control of the business to his 1,900 workers.

Gary Grant opened his first shop with his wife Catherine in 1981 when he was 23. Hes now 66, and his multi-million pound empire spans 160 shops across the UK.

He is transferring 100% ownership of the family-owned business to an employee trust which means staff will get a share of the profits and a say in how the firm is run.

"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," Mr Grant told the BBC.

Most of the Entertainers profits are made in the lead-up to Christmas. Mr Grant said this meant it would be too early to say whether staff would get a bonus for this financial year.

The "real rewards" should come for the year ending in January 2027, he says.

"Thats when I think the staff will start to see something a little bit more meaningful."

Under an employee ownership trust, Mr Grant and his family will be financially rewarded, too. They will receive a payout for the transfer of their 100% shareholding, which will be taken out of the profits over time.

In its last set of annual accounts for the year to the end of January 2024, the Entertainer posted pre-tax profits of £6.7m.

"The Entertainer has thrived against all the odds," says Mr Grant, listing the financial crisis of 2008, the Covid pandemic, the decline of the High Street and the shift to online.

The Grant familys Christian ethos is central to how the business is run. Unlike other big retailers, it doesnt open on a Sunday and it donates 10% of its annual profits to charity.

Last year it expanded its partnership with Tesco to stock toys in more than 850 of the supermarkets stores. It also has concessions in 140 Matalan shops.

Mr Grant left school in Amersham, Buckinghamshire, with one O level. He was fired from his first job in a local bike shop but then he and his wife took out a loan to buy a toy shop down the road, despite the couple having no knowledge of the sector.

Two of their four children work in the company but Mr Grant says they have got "other plans for their lives" and after lengthy succession planning, which explored a number of exit options, the family chose an employee ownership trust.

He believes the move will preserve both the familys legacy as well as the family feel of the business. Nearly 400 staff have worked there for more than a decade, around 50 have clocked up more than 20 years of service.

"We would have been very concerned selling to a business that has a completely different set of values to the values of the Entertainer which weve built over the last 44 years. This is a win-win for everybody that we employ," he said.

Two years ago the family appointed its first external chief executive, Andrew Murphy, from the John Lewis Partnership, the UKs biggest and best-known employee-owned business.

In November, Mr Murphy told the BBC it had been forced to drop plans to open two new stores and freeze hiring at its head office after the government said it would raise National Insurance contributions for employers.

Next month, when the transfer is due to complete, Mr Murphy and his senior leadership team will have full independent control of the company.

"Its a huge responsibility to continue the legacy and not just deliver success but do it in a way which they (the family) would be proud," he told the BBC.

Every ownership model, he says, comes with its strengths and vulnerabilities. On the one hand, assets cannot be extracted and sold for personal gain giving everybody in the company a chance to earn an "upside" from what happens in the business. But it can limit the ability to raise external funding.

Mr Murphy says the Entertainer does not carry any long-term debt and has no urgent demand for a capital injection.

"Gary and the family have built the business over 44 years in a very measured, consistent, way," he says.

Asked what he would do after stepping back from his role as executive chairman, Mr Grant admits "switching the computer off" will be challenging, saying his wife often comments that "weve got four children and this business has been our fifth".

He has bought a narrowboat and intends to spend more time with his 10 grandchildren and his charity endeavours.

"Im not sad with the way that were leaving the business to go on from strength to strength. And if the business was failing in any way, that would be a much more difficult thing to be facing into. But its nice. Its in strong financial health."