The Entertainer, the UK's largest independent toy retailer, will transfer one hundred per cent of its shares to an employee ownership trust in September, giving its 1,900 staff a direct stake in the business and access to tax-free profit bonuses.

Founders Gary and Catherine Grant, who opened their first shop in Amersham in 1981, said the decision would secure the chain’s independence and preserve its values. “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 into an Employee Ownership Trust,” executive chairman Gary Grant said in a statement.

Under the new structure, employees will become beneficiaries of the trust, sharing future profits through tax-free distributions. A colleague advisory board will be created so staff can influence strategy; one representative will sit on the three-member trust board that oversees the business. Current shareholders will be paid for their stake from future earnings, but no external debt will be raised to fund the change.

The Entertainer operates more than 160 stores nationwide and runs over 1,000 concessions with retailers including Tesco, Matalan and Marks & Spencer. In the year to 27 January 2024 the company reported pre-tax profit of £6.7 million on revenue of £238.3 million, according to Companies House filings. Despite softer trading, the Grant family took a dividend of £15.6 million, their first payout since 2019.

Andrew Murphy, the former John Lewis executive who became the Entertainer’s first external chief executive in 2023, will lead the business after the handover. He said the trust model would strengthen the company’s culture and long-term prospects. “I know that our new structure will bring us even closer as a business and will provide our hard-working employees with a sense of opportunity, accountability and belonging,” he said.

Employee ownership trusts are gaining traction in UK retail, with the John Lewis Partnership and Richer Sounds among the best-known examples. James de la Vingne, head of the Employee Ownership Association, described the Entertainer’s move as a “bold and brilliant commitment to shared success”, forecasting that other high-street names will follow.

Gary Grant, sixty-six, plans to step down as chair once the transfer completes, focusing on charity work and time with his ten grandchildren. He said passing the company to staff was preferable to a sale that might dilute the brand’s community-focused ethos.

The first staff bonuses under the trust could be paid after the financial year ending January 2027, when the company traditionally books the bulk of its profits in the Christmas trading period.

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