‘To employee ownership and beyond! The Entertainer’s toy story shows retail at its best’

On Tuesday, The Entertainer chief executive Andrew Murphy was preparing for a big staff briefing – and not just any old meeting. The previous day, founder Gary Grant revealed the seismic news that he and his wife Catherine were transferring ownership of the business to their employees

The staff will own a company that turned over, in its most recently reported year, approximately £240m and generated profits of just under £7m.

For everyone who works at The Entertainer it marks the end of one phase of the business, and the start of an exciting new one. And, in an industry frequently in the headlines because of company problems or cross-industry challenges, it is a moment to celebrate for showing retail at its best.

First of all, hats off to the Grants for having built a successful retailer from scratch. The pair established The Entertainer in 1981, it’s still here and in good health more than 40 years later, during which time it’s expanded not just at home but internationally.

Just as impressively, and spotlighted by the decision to transfer the business (they will be paid over time for their shares), the Grants built The Entertainer with values at the heart. In their case, those values reflected their Christian beliefs, such as the decision not to trade on Sundays.

It has to be said that sometimes retailers pay lip service to values, especially the importance of their people.

The Grants have firmly backed words with eye-catching action. Gary Grant said as he revealed his intention to put the business into an employee ownership trust: “This is a significant decision for the family, and one we haven’t taken lightly, but it feels like the right time to transfer our entire shareholding… We’d like to send our sincere thanks to all our employees, who have worked hard to make The Entertainer what it is today.”

I get the impression Murphy is determined that The Entertainer’s continued success, rather than its ownership model, remain the primary focus

The family aren’t handing over a business that has been milked dry either. Instead, there is opportunity to be built upon.

While it is unlikely lots more UK store openings will be on the agenda, there’s plenty of scope to expand the ToyBox side of the business in particular.

While ToyBox is referred to as a concession operation, it’s a world away from opening shop-in-shops. Instead, partners effectively outsource the entirety of their toy business to The Entertainer. There are already deals in place with retailers such as Tesco, and I understand more tie-ups can be expected in the coming months.

As The Entertainer’s ownership transitions to an employee-owned model, Murphy is well placed to ensure that happens successfully. He spent almost 14 years at John Lewis Partnership, where he rose to become group chief operating officer, so he knows the meaning and value of mutual ownership.

Murphy also knows the potential pitfalls. While John Lewis was, and is, widely admired for its unique ownership model, sometimes the structure rather than the business took centre-stage in ways that were unhelpful to commercial success.

I get the impression Murphy is determined that The Entertainer’s continued success, rather than its ownership model, remain the primary focus. That after all, is what will deliver the value of ownership to employees.

He told me this week that he sees his role as “enabling” the new owners to make the most of the opportunities that they have. If you were an employee-owner, that’s exactly what you’d want.

Employee ownership is not unique in retail to The Entertainer and JLP. Richer Sounds entrepreneur and retail guru Julian Richer awarded staff a 60% stake in the business in 2019 and staff at beauty specialist Lush hold 10% of the company.

This week at The Entertainer, recognising the fantastic legacy of the Grants is top of the agenda. Then, it’s all about nurturing that legacy through effective retailing – and staff more committed than ever – so that it continues to thrive in the years to come.

Maybe not quite, as Buzz Lightyear said in Toy Story, “to infinity and beyond”, but certainly into more pastures new and, on the evidence so far, profitable.