Guitarguitar: employee ownership finds the right note in the Scottish success story
A SCOTTISH guitar retailer has struck a chord with its staff by becoming the first musical instrument retailer in the country to go employee-owned.
The guitar chain’s restructuring will see 60% of all its shares placed in an employee ownership trust (EOT), giving its 160-person team a majority of the business and its profits.
The online and in-store guitar retailer started in Corstorphine, Edinburgh in 2004 and has expanded to six locations across the UK.
It is now headquartered in Trongate in Glasgow and sells over 50,000 guitars a year – from entry level axes to highly sought after collectable instruments from the likes of Fender, Gibson, Taylor and Martin.
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Kip McBay and Graham Bell, who co-founded the company, decide to move to an employee ownership model to allow them to plan their respective exits without threatening the brand’s heritage.
Bell said: “Our team is thrilled to find they now own a piece of this incredible business. The success of guitarguitar is the result of the commitment and hard work of our staff and we have now decided to take the next step and give them their own piece of the business.
“We have spent the past 20 years building a brand that we are passionate about. We wanted to make sure the business means something to future owners when it comes time to step back.
“Not only did we want to reward staff for their efforts within the business, but we also wanted to ensure that our customers will always be front and center. Every experience a customer has at guitarguitar will now be with someone who is invested and committed to providing exceptional service to musicians.
The company has an annual turnover of £45m and is the first musical instrument retailer in the UK to take the step towards employee share ownership, an increasingly popular business model.
Their operations manager, Bobby Simpson, said: “It’s been a fantastic day for the guitarguitar team.
“What a brilliant start to the year knowing that Kip and Graham have full confidence in every member of staff to continue and grow the guitarguitar legacy.”
Specialists in the field EY advised on the move and Douglas Roberts of Lindsays provided legal advice.
Roberts said: “guitarguitar is a brilliant Scottish business success story. Graham and Kip wanted to reward their staff and safeguard the future of the business while protecting the philosophy they have built.
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Carole Leslie of Ownership Associates, who helped support the project, said: “This is a great milestone for the musical instrument retail industry and Ownership Associates has been pleased to help a such an important company within the industry to achieve its business objectives.
“We are seeing an abundance of interest in the structure of the company. When business owners like Kip and Graham want to set their own exit strategy, employee ownership quickly presents itself as a clear option to provide a positive path for owners and staff.
Bell added: “The last 20 years have been an exciting adventure for all of us when it comes to guitars. It’s time for Kip and I to let the next generation lead the company into the future.