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Shirlaine Forrest
Julian Richer is drummer in the funk band Ten Millennia
Julian Richer has always been seen as an unorthodox businessman – and this week, he showed why.
The founder and 100%-owner of the Richer Sounds hi-fi and television stores is putting ownership of the business in a John Lewis-style employee trust.
“My father dropped down dead at the age of 60, and I was 60 a few weeks ago,” he told the BBC. “It was time to pass on the reins.”
He and his wife, Rosie, have no children, and “I didn’t want to sell to a stranger who might have completely different aims and ambitions for the business. I’m hoping it will ensure the succession of the business,” Mr Richer says.
Setting up a trust for the business was, in fact, written into his will in 2003. But the process of moving to the new structure was begun about two years ago so that Rosie could avoid having to oversee the change “if I pre-deceased her”.
“My wife is wonderful, but she’s not madly commercial,” he says. Sorting out the change now seemed like the “adult thing to do”.
He founded Richer Sounds in 1978, aged just 19. There are now 53 outlets, with 530 staff and about £200m in annual revenues. It’s brought him the sort of wealth that many staff can only dream off – £160m, according to the latest Sunday Times Rich List.
What he calls a “cautious, conservative” approach to expanding the business has been one reason for his success, Mr Richer believes.
But another reason has been an enlightened attitude to staff, something he set out in his 2001 management book The Richer Way.
Mr Richer told the BBC: “I’ve been running my business for 40 years and the overriding thing I’ve learned is that it’s all about the people. If you treat your people right, then they are going to be happier, give a better service, stay with you, they are not going to steal.”
Richer Sounds also has 12 holiday properties – including in Paris and Barcelona – for staff use, with about 70% of the workforce using at least one home each year.
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As part of this week’s announcement, staff (excluding directors) will receive a big windfall in the form of £1,000 for every year of service. The average length of service is eight years. “I just felt it was the right thing to do. There were a lot of happy people yesterday.”
While earlier reports put the cost to Mr Richer at £3.5m, the businessman told the BBC on Wednesday that the final costs might be closer to £4m. “It was an expensive day,” he said.
‘Evil’ zero-hours
Working conditions in the UK worry him. The announcement of the trust came on the same day that unemployment figures showed another fall.
“At face value, that’s great, but I do worry about the quality of the jobs,” he says. “I’m concerned about low wages and people living below the living wage. I’m concerned about evil zero-hours contracts. I hate penalties for people being off sick.”
Life is tough for many people, both in work and out of it, he says, adding: “Inequality at the moment is the worst I’ve know it in my lifetime,” he says.
It’s why 15% of Richer Sounds profits go to charity. He also helps finance Taxwatch, a non-profit organisation that seeks to expose tax avoidance by multi-national corporations and the mega-rich.
His anger at the UK’s broken system prompted him to write another book – The Ethical Capitalist: How to Make Business Work Better for Society – published last year.
In it, he admits to once paying himself gold bullion to avoid paying national insurance. Although legal, it was “not morally justifiable” and he stopped.
‘Funny feeling’
One of his hopes is that setting up the Richer Sounds trust and gifting money to staff “will set a good example”.
What will he do now? Firstly, he’s not retiring from Richer Sounds. “On Monday, I was handed an employment contract, and had a little chat – was a funny feeling.”
Day-to-day operations are overseen by the chief executive, Julie Abraham. And Mr Richer is one of the four trustees in the new set-up. “They’ve all been with the company a long time. We do things in a collaborative way,” he says.
“At the moment, I am still going to be as involved as ever,” he says. “But I’ve passed [the business] over to a trust, and I will be respectful of that.”
So he won’t necessarily have more time to perform as the drummer in his funk band, Ten Millennia.
There are also other business interests, too, now including acting as an adviser to the chief executive of Marks & Spencer, Steve Rowe, as he seeks to restructure operations and finalise plans for a joint venture with online food firm Ocado.
It’s a company that holds a lot of memories. “My parents met at in M&S in the ’50s in the Kilburn [London] store. Hopefully they’d be very pleased.”
You can hear some of Julian Richer’s interview with the BBC on Wake up to Money