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The Herald Scotland
13 hours ago
- Business
- The Herald Scotland
'For us, this is about building a legacy for our team'
Following a period of rapid growth over recent years, there are now nearly 300 employee-owned firms in Scotland. These concerns employ more than 7,500 people and turn over in excess of £1.5 billion collectively. And the number of Scottish firms where staff hold majority stakes, chiefly through employee ownership trusts (EOTs), is expected to continue to increase, despite recent changes to the tax regime, as the Scottish Government targets having 500 employee-owned businesses operating in the country to 500 by 2030. Nicholas Howie, partner in the corporate law team at Lindsays, which has advised on 25 employee ownership deals in recent years, said: 'An exit strategy can be one of the biggest issues facing owners of SMEs (small and medium-sized enterprises) in Scotland. Employee ownership is an increasingly effective - and empowering - way of managing that. It's transformational for many businesses. 'It allows sellers - often founders or families who have run businesses for generations - to continue to play a role in their future, while putting the legal and financial frameworks in place which create a long-term legacy for their employees. 'Owners who sell their shares to an EOT gain an exemption on capital gains tax. But, on top of that, EOTs are really starting to demonstrate their economic worth. Read more: 'The feedback that we've had is that businesses which make the change become more productive and profitable because the whole staff team has a stake in its success, with the ability to award employees annually with bonuses of up to £3,600 per year per employee.' Among the newest to make the change in Scotland is Wetrooms International Group, the Rutherglen-based bathrooms supplies business, which cited ambitious growth plans among the reasons for transferring the majority of its equity to its 80 employees. Founders Brian and Bill Crombie have retained a 26% shareholding following the transition to an EOT. Brian Crombie said: 'For us, this is about building a legacy for our team, recognising the loyalty of our staff. Becoming an EOT was the logical step for us to take. It makes sense for everyone. 'I'm 73 and Bill is 71. We've got ambitious plans for the business while naturally also considering what work looks like for us longer term. We've had approaches, but didn't like the idea of a trade sale, putting the business in the hands of someone who might not understand our unique ethos. Our team deserves better.' Bill Crombie added: 'The business is in a real period of growth with huge potential to expand significantly over the next five years.' Employee ownership is continuing to grow in popularity despite recent changes to the capital gains tax regime for EOTs in the Autumn Budget. The changes will aim, among other things, to 'restrict former owners or persons connected with former owners from retaining control of companies post-sale to an employee ownership trust by virtue of control (direct or indirect) of the employee ownership trust'. They also aim to 'require that the trustees must take reasonable steps to ensure that the consideration paid to acquire the company shares does not exceed market value' and will extend the capital gains tax clawback period from one complete tax year following the tax year of the sale to four complete tax years. Specialist advisor Carole Leslie, director of Ownership Associates, who has helped more than 150 firms make the transition in the last year, said: 'The interest in the EOT structure is continuing to accelerate at pace across all business sectors. As awareness grows, more companies are seeking out a succession option that allows the owners to realise their value in the company tax effectively and allows them to control their own exit from the company. 'It's great news for employees. They can be as reassured as possible that their employment will continue for as long as the company continues to be successful, whereas any other succession option would likely lead to disruption and possible relocation or downsizing.' The benefits that can be achieved from staff having a greater stake and say in how they work are being highlighted today, as Employee Ownership Day takes place.
Scotsman
09-06-2025
- Business
- Scotsman
Edinburgh store staff secure a stake in business
Staff at a specialist Edinburgh bathroom supplies business have been handed a greater stake in its future. Sign up to our daily newsletter Sign up Thank you for signing up! Did you know with a Digital Subscription to Edinburgh News, you can get unlimited access to the website including our premium content, as well as benefiting from fewer ads, loyalty rewards and much more. Learn More Sorry, there seem to be some issues. Please try again later. Submitting... Ceiling2Floor is the latest brand in Scotland to become employee-owned, opening new opportunities for the three-strong team, based at Sighthill Industrial Estate, to share in its success by being its part-owners. It comes after founders Brian and Bill Crombie agreed a deal with staff to transition Wetrooms International Group, which owns the trade store chain, to an Employee Ownership Trust (EOT). Advertisement Hide Ad Advertisement Hide Ad Edinburgh regional manager Mark Holmes welcomed the news and said: 'Our transition to an EOT is a really positive step. Edinburgh Ceiling2Floor team members Ricky Cassidy (sales assistant / driver), left, and assistant manager Thomas Alston. The store has entered a new era as part of an employee-owned firm. 'While it's business as usual for us and our customers, the change internally gives our management team greater involvement in the business operations, which is really exciting. I'm looking forward to this new chapter.' The Crombie brothers have retained a 26% share of the business as part of the deal and will continue to play key roles in its development, with the firm seeking opportunities to expand across the region and throughout Scotland. Brian said: 'This was the logical step for us to take. Most of our staff have been with us for a long time and we've a great management team. Becoming an EOT is an investment in them, allowing everyone to share further in the future success of the business.' Advertisement Hide Ad Advertisement Hide Ad Bill added: 'The business is in a real period of growth with huge potential to expand significantly over the next five years. We have the right team in place to achieve that.' Wetrooms International has been guided through the transition to employee ownership by Ownership Associates, with assistance from Reference Point Advisory and legal advice from Edinburgh-headquartered Lindsays. Ownership Associates Director Carole Leslie said: 'It's fantastic to see a growing business such as Wetrooms International realise the positive impact of employee ownership, not least allowing the team who have helped deliver its success so far to retain control of its future and share the benefits.' Employee ownership unlocks a capital gains tax exemption for shareholders who sell their shares to an EOT and the ability to reward employees annually with qualifying bonuses of up to £3,600 per year per employee, which can be paid free of income tax. Advertisement Hide Ad Advertisement Hide Ad Nicholas Howie, a Partner in the Corporate Law team at Lindsays, said: 'Brian and Bill's decision to transition to an EOT allows them to continue to play a key role in the future of the business while putting a legal and financial framework in place that creates a long-term legacy for their team. It's the ideal fit for them.' Trustees for the new structure have been appointed from the Celing2Floors team and wider Wetrooms International Group nationally.
Scotsman
09-06-2025
- Business
- Scotsman
Specialist Scottish bathroom supplies business becomes employee-owned
An expanding £20m turnover bathroom supplies business built from scratch by two brothers has become Scotland's newest employee-owned company. Sign up to our Scotsman Money newsletter, covering all you need to know to help manage your money. Sign up Thank you for signing up! Did you know with a Digital Subscription to The Scotsman, you can get unlimited access to the website including our premium content, as well as benefiting from fewer ads, loyalty rewards and much more. Learn More Sorry, there seem to be some issues. Please try again later. Submitting... Rutherglen-headquartered Wetrooms International Group employs almost 80 staff, including in the soon-to-be 14-strong network of Ceiling2Floor panelling stores across Scotland and northern England, as well as its Wetrooms Distribution operation supplying merchants throughout the UK and Ireland. Brian and Bill Crombie launched Wetrooms in 2005 and have worked together for nearly 50 years. As part of their continued commitment to the business, they have retained a 26% share in its transition to an Employee Ownership Trust (EOT). Advertisement Hide Ad Advertisement Hide Ad The move - which the brothers hope will help fuel growth ambitions as well as giving staff a greater stake in the firm's success - comes as the PVC panelling specialists recorded a 20% increase in turnover during the first quarter of 2025. Wetrooms International Group founders Bill, left, and Brian Crombie Brian said: 'For us, this is about building a legacy for our team, recognising the loyalty of our staff. Becoming an EOT was the logical step for us to take. It makes sense for everyone. Most of our staff have been with us for a long time and we have a great management team. 'I'm 73 and Bill is 71. We've got ambitious plans for the business while naturally also considering what work looks like for us longer term. We've had approaches, but didn't like the idea of a trade sale, putting the business in the hands of someone who might not understand our unique ethos. Our team deserve better. 'Becoming an EOT opens opportunities for our people to develop their careers, brings benefits to us and provides a level of comfort and confidence to the staff, suppliers and customers we work with that Bill and I are still here. It's the ideal fit.' Advertisement Hide Ad Advertisement Hide Ad Bill added: 'The business is in a real period of growth with huge potential to expand significantly over the next five years. We have the right team in place to achieve that.' Brian Crombie, front left, and Bill Crombie, front right, with Wetrooms International Group Managing Director Linda Smith, centre, and colleagues celebrating their employee ownership news Trustees to oversee the business have been appointed from the workforce as part of the new EOT structure. They include Group Managing Director Linda Smith. Wetrooms International has been guided through the transition to employee ownership by Ownership Associates, with assistance from Reference Point Advisory and legal advice from Lindsays. Ownership Associates Director Carole Leslie said: 'It's fantastic to see a growing business such as Wetrooms realise the positive impact of employee ownership, not least allowing the team who have helped deliver its success so far to retain control of its future and share the benefits. Advertisement Hide Ad Advertisement Hide Ad 'What's quite remarkable about Wetrooms is the sheer passion for ambition which goes through the organisation. I've been blown away by the calibre and commitment of the employees and it's been fantastic working with Brian, Bill and Linda. I look forward to seeing the business continue to expand.' Employee ownership unlocks a capital gains tax exemption for shareholders who sell their shares to an EOT and the ability to reward employees annually with qualifying bonuses of up to £3,600 per year per employee, which can be paid free of income tax. Nicholas Howie, a Partner in the Corporate Law team at Lindsays, said: 'You cannot fail but to be impressed by the energy and enthusiasm that Brian and Bill have for the business. 'Their decision to transition to an EOT allows them to continue to play a key role in its future while putting a legal and financial framework in place that creates a long-term legacy for their team. It's the ideal fit for their ethos.' Advertisement Hide Ad Advertisement Hide Ad Wetrooms, which specialises in PVC ceiling and wall panels for bathrooms, supplies both merchants. In 2008, following extensive development work, the firm introduced the first 100% waterproof hollow core PVC WidePanel shower and wall panels to the market. At the same time, the Ceiling2Floor trade outlet arm of the business was formed. It now has branches across Scotland in Aberdeen, Anniesland, Rutherglen, Dundee, Edinburgh, Falkirk, Glenrothes, Govan, Inverness, Kirkintilloch and Stirling. Carlisle will add to its Middlesbrough and Newcastle branches in northern England within weeks. Billsaid: 'Innovation, along with quality, is the key to the success of the business.' Advertisement Hide Ad Advertisement Hide Ad The brothers, who began their careers in sales to the home improvement, builders' and plumbers' merchant markets, have been working together since April 1977. They previously successfully established Showerwall in the late 1990s, selling that business to the St Gobain Group in 2007 to focus on the development of fully-waterproof shower panels and associated products.
