The Entertainer, the UK’s largest independent toy retailer, is embarking on a transformative journey by transferring full ownership to its 1,900 employees through an Employee Ownership Trust.
Founded by Gary Grant in 1981, the business has grown to over 160 stores nationwide, alongside partnerships with Tesco and Matalan.
This move not only secures the company’s legacy but also empowers staff with a share in profits and a stronger voice in decision-making, marking a significant shift in the UK retail sector.
What Is the Entertainer Toy Shop and How Did It Begin?
The Entertainer is widely recognised as the UK’s largest independent toy retailer, a business that has grown from humble beginnings into a multi-million-pound enterprise.
Gary Grant, together with his wife Catherine, opened the first shop in Amersham, Buckinghamshire, in 1981.
At the time, Gary was just 23 years old and had little experience in the toy sector. Their decision to enter the market came after taking out a loan to purchase a small toy shop despite lacking direct retail expertise.
Over the next four decades, The Entertainer expanded steadily, even during times of economic uncertainty.
The business survived the 2008 financial crisis, the Covid-19 pandemic, and the overall decline of the high street.
Its resilience was built on maintaining strong values, including a policy of closing all stores on Sundays and donating 10% of annual profits to charity.
Today, the company operates more than 160 standalone stores across the UK and has developed partnerships that allow it to have concessions in over 850 Tesco supermarkets and 140 Matalan branches.
This strategic expansion has enabled The Entertainer to maintain a presence both in traditional retail and in collaborative sales environments.
How Does the Employee Ownership Trust Model Work in the UK?
An Employee Ownership Trust (EOT) is a business structure where employees collectively own the company through a specially formed trust.
Unlike traditional ownership models, the EOT does not require individual employees to buy shares directly. Instead, the trust holds all or most of the company’s shares on behalf of its employees.
Key features of an EOT include:
- Employees share in company profits through annual bonuses, often tax-free up to a certain threshold.
- The trust ensures that strategic decisions reflect employee interests.
- Selling shareholders can benefit from specific tax incentives.
In the UK, EOTs have gained popularity as a way to preserve company culture while rewarding long-serving employees.
They differ from Employee Stock Ownership Plans (ESOPs), more common in the United States, where staff often own shares individually and may need to invest their own money.
Why Did Gary Grant Choose Employee Ownership for The Entertainer?
Gary Grant’s decision to hand over ownership of The Entertainer to its employees was the result of years of careful succession planning.
It was not a sudden move but a strategic choice aimed at protecting the brand’s culture, ensuring long-term stability, and rewarding the people who helped build the business.
Preserving the Family’s Legacy
The Entertainer has been a family-owned business for over four decades, and its growth has been closely tied to the Grant family’s values and principles.
Gary wanted to ensure these values—such as closing stores on Sundays, charitable giving, and a commitment to ethical retailing would continue after his retirement.
Selling to a large corporate buyer risked undermining these ideals, potentially changing the essence of the business.
Rewarding Long-Serving Employees
Many employees have spent decades working at The Entertainer, with nearly 400 staff having over 10 years of service and around 50 exceeding 20 years.
By moving to an Employee Ownership Trust, Gary could directly reward this loyalty, allowing staff to share in profits and gain a stronger influence on the company’s future direction.
Avoiding an External Takeover
Selling to an outside investor might have brought an immediate financial gain but at the cost of the company’s culture and employee stability.
Gary was concerned that a corporate buyer might focus solely on profitability, possibly leading to store closures, job losses, or significant cultural shifts.
The EOT model ensures that ownership remains aligned with the people who work within the business.
A Structured Succession Plan
Two of the Grants’ four children work in the business, but neither wished to take over the company in the long term.
This created a need for a succession plan that would not only secure the company’s operations but also provide financial stability for the family and employees.
The EOT was the most balanced option, offering a smooth leadership transition without disrupting the organisation.
Balancing Financial and Ethical Goals
The decision was not purely sentimental. Through the EOT, the Grant family will receive a financial payout for their shares over time, drawn from company profits.
This ensures the family is compensated fairly while safeguarding the future of the business in a way that aligns with its founding principles.
What Are the Benefits of Employee Ownership for Staff?
The move to an Employee Ownership Trust transforms the relationship between The Entertainer and its workforce.
Employees are no longer just staff members—they become stakeholders in the company’s performance and success.
Financial Rewards Through Profit Sharing
One of the most direct benefits is the opportunity for employees to receive a share of the company’s profits. Under UK rules, bonuses paid through an EOT can be tax-free up to a certain limit.
- The first meaningful payouts are expected in January 2027.
- Bonus amounts will depend on company performance and profitability.
- Payments are distributed fairly across the workforce, ensuring every eligible employee benefits.
A Stronger Voice in Decision-Making
Employee ownership provides staff with a more formal say in how the company is run. While senior leadership still handles daily operations, employees can influence major business decisions through elected representatives and trust governance structures. This encourages open dialogue, greater transparency, and a stronger sense of inclusion.
Increased Job Security
The EOT model makes it more difficult for the business to be sold without employee consent, which adds a layer of protection for jobs.
This stability is particularly valuable in the retail sector, where market shifts and corporate takeovers often lead to restructuring and redundancies.
Recognition for Loyalty and Contribution
Many of The Entertainer’s employees have been with the company for over a decade, and some for more than 20 years.
Employee ownership formally recognises their long-standing commitment by offering them a direct stake in the company’s success, beyond just a regular salary.
Boosted Morale and Engagement
When staff feel that their efforts contribute directly to shared success, it can significantly improve workplace morale.
Employees are more motivated to perform at their best when they know that better results can lead to greater rewards for everyone.
How Will This Ownership Model Affect The Entertainer’s Future?
The transition to employee ownership is expected to bring a balance of continuity and innovation.
Andrew Murphy, who joined The Entertainer from the John Lewis Partnership, will continue as chief executive and lead the company through this new phase.
Key areas of focus for the future will include:
- Strengthening market presence through partnerships with supermarkets and department stores.
- Innovating in product offerings to compete with both high street and online retailers.
- Maintaining the brand’s reputation for family-friendly values and charitable initiatives.
This model could also influence other UK retailers to explore employee ownership as a means of ensuring both profitability and staff engagement.
What Challenges Could the Employee Ownership Model Face?
While EOTs can bring significant benefits, they are not without limitations. Funding can be more challenging, as raising large amounts of external capital often requires complex negotiations.
There may also be slower decision-making processes when a broader group of stakeholders is involved in strategic choices.
However, The Entertainer is entering this phase with notable advantages:
- The business has no long-term debt.
- It has a proven record of sustainable growth.
- Its leadership team has direct experience managing employee-owned organisations.
How Does The Entertainer Compare to Other Employee-Owned Businesses?
Employee ownership is not new to the UK retail sector. The John Lewis Partnership remains the most well-known example, combining commercial success with a high level of employee involvement.
The Entertainer’s adoption of this model shares some similarities but also distinct differences.
Comparison Between The Entertainer and John Lewis Partnership
| Factor | The Entertainer | John Lewis Partnership |
| Sector | Toy Retail | Department Stores & Groceries |
| Ownership Type | Employee Ownership Trust | Partnership Model |
| Size of Workforce | ~1,900 employees | ~78,000 employees |
| Main Profit Period | Christmas Season | Year-round |
| Charitable Giving | 10% of profits | Various charity programmes |
| Store Closures on Sunday | Yes | No |
What Role Will the Leadership Team Play After the Transition?
While employees will collectively own the business, operational leadership remains with Andrew Murphy and his senior management team.
Their role will be to balance day-to-day decision-making with the interests of employee owners, ensuring profitability without compromising the company’s values.
Leadership priorities will include:
- Maintaining operational efficiency across 160+ stores and partner locations.
- Preserving brand identity and customer service standards.
- Managing profit allocation between reinvestment and employee bonuses.
Leadership Responsibilities in an Employee-Owned Company
| Area of Responsibility | Role of Leadership | Role of Employee Owners |
| Strategic Planning | Set long-term goals and business strategy | Provide feedback and vote on major changes |
| Financial Management | Oversee budgets, investments, and profitability | Benefit from profit distribution |
| Brand Values | Ensure ethos and charitable giving are maintained | Support brand culture in daily operations |
| Growth Initiatives | Identify and implement expansion plans | Participate in shaping priorities |
How Does Employee Ownership Impact the UK Retail Sector?
Employee ownership can reshape the retail sector by fostering stronger employee engagement, improving staff retention, and ensuring that a greater share of profits remains within the company. For customers, this can mean better service and a more committed workforce.
In the case of The Entertainer, the move positions it as a prominent example of how a family business can evolve without losing its identity.
As more companies in the UK explore alternative ownership models, the EOT structure could become an increasingly attractive choice for those prioritising stability and shared success.
Conclusion
The Entertainer’s shift to employee ownership is a landmark move in the UK retail sector. It demonstrates that profitability and people-focused values can coexist.
While challenges remain, the company’s debt-free status, strong brand presence, and committed workforce make it well-positioned to thrive under this model.
Frequently Asked Questions
How does an Employee Ownership Trust differ from traditional company shares?
In an EOT, shares are held collectively on behalf of all employees by a trust, rather than owned individually.
Do employees have to buy shares in an EOT?
No. Employees automatically benefit from the trust without having to invest their own money.
How soon will The Entertainer’s staff see financial benefits?
The first meaningful bonuses are expected by January 2027, after the trust has built up sufficient profit reserves.
Can an employee-owned company be sold?
Yes, but the sale must be approved by the trust, ensuring employees have a say in the decision.
How are profits distributed in employee-owned businesses?
Typically, profits are shared annually among all eligible employees, often tax-free up to a certain limit.
What other UK retailers are employee-owned?
Notable examples include the John Lewis Partnership and Richer Sounds.
Does employee ownership improve customer service?
Many studies suggest that when employees have a stake in the business, they are more motivated to deliver excellent service.
