Hebridean Jewellery, a specialist jewellery maker based on the Island of South Uist that pioneered a renaissance in Celtic Jewellery, has been sold to its employees in a deal that will secure the future of the company, around 14 jobs and important design and manufacturing skills in the Outer Hebrides of Scotland.
The employee-owners now plan to grow the business by significantly increasing internet sales, in particular to the USA, which is already proving a good source of business.
Hebridean Jewellery, which was founded by John Hart in 1974, manufactures sterling silver and gold jewellery from the Pictish and Celtic periods through to the new Millennium range. The company is based in lochdar, South Uist, where all manufacturing is undertaken, and also has retail premises in Stornoway (Isle of Lewis) and Portree (Isle of Skye).
After 35 years of successful trading John Hart and his family wanted to retire but were determined to secure the future of the company in the local community, and the jobs of the staff, many of whom had worked with Hebridean Jewellery for over 20 years.
Whilst considering the options, Mr Hart attended a conference on employee ownership, which was hosted by Co-operative Development Scotland (CDS), a subsidiary of Scottish Enterprise. After additional advice and support from Baxi Partnership, and Highlands and Islands Enterprise (HIE), the Hart family decided that employee ownership offered the ideal solution for all parties, and began the process of preparing for an employee buyout.
A funding package of bank loan and vendor finance was used to enable the employees to buy the business. The new ownership model includes an employee benefit trust and a tax efficient share incentive plan. The Baxi Partnership team provided support throughout the process including the design and development of the deal structure and ownership model and the training of employees, both on the rights and responsibilities of ownership and, for some, on their new roles as directors or trustees.
John Hart said the employee buyout was a great solution for everyone associated with the business, saying: "After 35 years we were ready for retirement, however we wanted to see the company sustained in the local community and to continue prospering. We are delighted that the business is now owned by our former employees as it could not be in better hands. The advice and support we have received from CDS, Baxi Partnership and Highlands and Islands Enterprise has also been outstanding. For any business owners thinking of exiting but keen to see their business sustained, we would strongly recommend an employee ownership option. This business model is good for the owners, good for the employees and good for local communities."
New Managing Director William MacPhee added: "Hebridean Jewellery has an exciting future, particularly as we develop new markets through the internet. Many people have contributed to the success of the company, but we would particularly like to pay tribute to the local community and wholesale customers who have supported us over the years and who have, in many ways, helped build the business. In addition, on behalf of the new owners, I would like to thank the Harts for giving us the opportunity and CDS, Baxi Partnership and HIE for facilitating the employee buyout."
Sarah Deas, Chief Executive of CDS added: "There is more interest across Scotland in employee ownership with a growing number of companies now adopting this business model. Research shows that employee owned businesses can be more productive, profitable and sustainable and as such we are encouraging more business owners to consider this exit option."
Jacqui Mitchell, who led Baxi Partnership's team of employee ownership experts, said: "John Hart is a truly inspiring individual. Having grown a business from scratch, rather than sell it off to the highest bidder he's chosen to keep it independent, local and in the hands of the same staff who have worked for as long as 20 years to make it a success. If only more business owners were as visionary."
Alasdair Maclean, development manager with Highlands and Islands Enterprise, said: 'We've worked closely with John Hart and the team at Hebridean Jewellery and supported them to become a successful international brand with its roots in the Outer Hebrides. We were delighted to be able to assist this transition which will retain good jobs and specialist skills in the Hebrides and place the business on a strong footing for the future. Nobody knows this business better than its workforce and this transfer to employee ownership heralds a new exciting era for the company. It is encouraging to see the continuation of artisan manufacturing skills within Hebridean Jewellery, especially when other companies are choosing foreign manufacture. This illustrates the values held within Hebridean Jewellery in its people who will undoubtedly drive new ambitions under employee ownership and continue to make it a success.'
Any entrepreneurs or business owners who want to learn more about John Hart or what employee ownership has to offer can attend a free introductory seminar being run by Baxi Partnership in Glasgow on 1 September 2011 (see website below for more details).