Employee-ownership model adopted by Auchrannie Resort

The Auchrannie resort, located in Brodick on the Isle of Arran, has become the first hotel Scotland to transition its business model to employee ownership.

A trust has been formed and holds 100% of the shares on behalf of the company’s employees. The owners said the deal was structured to make it affordable to the business without affecting its ability to reward the team and reinvest for the future.

Co-founder and managing director Linda Johnston and the management team will remain in place and the day to day operation of the business will not change.

Auchrannie’s transition to employee ownership was supported by Highlands and Islands Enterprise (HIE) and Co-operative Development Scotland (CDS), with the process managed by Co-ownership Solutions LLP and legal services by Burness Paull.

Johnston, said: “We first started looking at employee ownership in 2015 and the first formal meetings were held in early 2016. Many exit options were considered over the years but none protected the ethos of the company, the existing team or the community use of Auchrannie’s facilities for future generations like employee ownership did.

“The team have been involved in the process from an early stage and were given the opportunity to input throughout. They have very much embraced the concept of employee ownership and are extremely excited about it. They are delighted that [the hotel] legacy will be protected and that they have the chance to play an active part in, and benefit from, [the hotel’s] future success.”

Johnston added:  “The transition has been pretty smooth despite the fact that [the hotel] is a complex business; we have been well supported by HIE, CDS, Co-ownership Solutions and Burness Paull. The help we received was invaluable in enabling us to put together the team who lead us through the whole process seamlessly.  Although there have been a number of hurdles to jump over, there have been no real lows.

Sarah Deas, director at CDS, said: “Being on an island, a change to the ownership of a resort like Auchrannie could seriously affect the economy of the whole island. The change to employee ownership means that the team at Auchrannie and the community of Arran can relax knowing that it will always remain an independent, locally run organisation with community values at heart.”

Jennifer Nicoll, HIE area manager, said:  “Employee owned companies generally achieve good results and have a motivated, innovative, productive workforce with profits retained locally. The model also often appeals to potential future employees.  It’s great to see Auchrannie complete the transition.

“The business is a big part of Arran’s tourism offering and the island’s future prosperity and community resilience. The move to employee ownership provides a sound basis for future growth.”