Successful transition to employee ownership with Richer Sounds

Founded in 1978 by Julian Richer, Richer Sounds is a UK retailer with 52 stores nationwide that sell a range of hi-fi, home cinema and TV equipment. In 2017 RSM were appointed to assist in an 18-month project to transition the company from private ownership to an employee ownership trust. 

Overview 

Richer Sounds was 100 per cent owned by Julian Richer until May 2019 when the owner/founder passed 60 per cent of his shares into an employee owned trust, a project undertaken by the RSM legal and employer solutions team. The trust gave all employees an indirect and long-term stake in the business. Separately, Julian Richer personally gave a £1000 celebratory bonus to employees for every year they had worked with the company (excl. board directors).

Challenges

The project encompassed RSM service lines including legal, employer solutions, tax and company secretarial. Challenges that arose during the project included ensuring the culture of the business is preserved for the future, the transition of control and management, corporate restructuring due to lender requirements, moving from a PLC to a private company and ensuring there were no leaks before the announcement. 

Partnering with RSM 

As an advisor to Richer Sounds for circa 40 years, RSM understood the unique, employee-focused culture of the business and helped to build a corporate governance structure that reflected this as a part of the project. RSM truly acted in our best interests at all times. Employee ownership has changed significantly in recent years, and not only were RSM technically skilled and experienced with the implementation of an employee ownership trust, but they were also happy to act as a central resource and sounding board to us and our other third-party advisors.

Results 

The transition period for this project agreed by both Richer Sounds and RSM was 18 months and this timeline was successfully met. Not only was the project completed successfully, but it also received overwhelmingly positive press from all major media outlets. 

We definitely made the right choice in instructing RSM to implement our employee ownership project. The team supported us all the way through the process and added real knowledge, value and insight to both us and our third-party advisors throughout the transition. The service we received was excellent and I would highly recommend Employee Solutions Partner, Fiona Bell and her team to others going through the process.”

- David Robinson, Chairman, Richer Sounds