Melin Tregwynt

Melin Tregwynt – Employee Ownership Case Study

 

Melin Tregwynt, the iconic woollen mill and shop, has transitioned to an Employee Ownership Trust after its current owners Eifion and Amanda Griffiths handed over the reins to 42 employees of the company. Melin Tregwynt was supported in its transition by Social Business Wales, which is delivered by Cwmpas.

Background

The mill was founded by Eifion’s grandfather in 1912 who bought a small Pembrokeshire textile mill, which has since developed into a thriving company weaving woollen blankets, bedspreads, fabrics and much more.

Alongside its own stock ranges, the company specialise in short runs and exclusive designs for hotels, designers and specifiers and, over the years, has worked with companies as diverse as John Lewis, Heals, Liberty’s, Muji, Margaret Howell, Comme des Garcons and the BBC, who have all commissioned exclusive ranges.

Its blankets and throws have been designed both for the Celebrity Big Brother house and the Apprentice, and it has also worked on collaborative projects with the Tate Gallery, the Victoria & Albert Museum, National Theatre Wales and the Community Foundation in Wales.

In 2008, the team successfully wove the largest recorded picnic blanket in the world. This 40 x 45 metre blanket is still in the Guinness Book of Records.

Employee involvement formula

In April 2022 the business formally handed over the ownership of the business to its 42 employees via a trust, giving them all a stake in the future of the business. This will preserve traditional skills and the knowledge gathered over a century or more, since the company was founded.

Eifion and Amanda will remain in the business on a part time basis, and Eifion explained the reasons for the transition to employee ownership: “Amanda and I inherited the business and have grown it substantially over the last 35 years but now we want to take a step back.

It was important for us that Melin Tregwynt remained a viable business and part of its local community, and employee ownership provided the perfect solution for us.

“We will guide the new management board through the transition, but most importantly the 42 strong workforce will keep their jobs and skills and knowledge will be remain here and be kept alive.”

Eifion added: “We are still very much a family business – just not in blood, but in ethos, belief and tradition. Many employees have worked here for decades, and we even had three generations of one family as part of our team. I am proud to be passing on the company to the new employee board who I know will take the business to new levels of growth.

Louise Clarke, who is the Retail Manager at Melin Tregwynt and now a member of the Trust that has acquired the business, said: “We are proud to be taking over this business and to have Eifion and Amanda here to help as we as take our first steps is great.

Melin Tregwynt has such a strong base here in West Wales it would have been a tragedy to see it bought out by another company and possibly changed forever, so we are honoured that the Griffiths family has chosen to trust us as employees with their family business. I can’t wait to see what the future holds for us at Melin Tregwynt.

Description of the process

Melin Tregwynt was supported in its transition to Employee Ownership by the Employee Ownership Wales team at Social Business Wales, which is delivered by Cwmpas. Cwmpas’ team was the company’s first point of contact and project managed the process from beginning to end.

Supported by their own legal and accountancy firms, the company was valued, funds were then raised from the banks to buy the shares, and then 100 percent of the shares were transferred into an employee ownership trust. The shareholding is now held in the trust on behalf of the workforce.

Mechanisms used to implement the process

An employee ownership trust was created as a mechanism to transfer ownership from the Eifion and Amanda to the employees. The trust is overseen by a corporate trustee which has a board which includes trusted advisers, Amanda and Eifion and a staff member. The trust looks after the interests of the employees and the trustees hold the Board of the principal company to account and ensure that they treat employees as owners and run the company in their interests.

The Trustee has one overriding responsibility; it must do its best to protect and reward all the beneficiaries, i.e., the employees of the company. It does this through exercising its rights over the assets of the company as a shareholder.  In turn, the employees can hold the Trustee to account. Usually, the employees as beneficiaries in effect enjoy the same or equivalent rights as any shareholder – a vote at a shareholders meeting, income distribution (usually for tax reasons through a profit-sharing scheme), a say in any sale of the company, a say in any major investment decisions and a right to participate in a solvent winding-up should this ever be required or desired. The main difference is that these rights are exercised through the Trustee rather than directly. The Trustee usually informs its beneficiaries through a report and consults with them on major issues.

Main benefits for the company, employees and environment/society

The use of EOTs has increased dramatically over the past two years, a trend which both protects the business’s legacy and retains employees’ jobs, and Cwmpas were proud to be part of this next step for Melin Tregwynt.

In the case of Melin Tregeynt the use of Employee Ownership Trust being used in this way, safeguards not only jobs, but also the heritage of the business. Being located in a sleepy village in Pembrokeshire, Melin Tregwynt is at the heart of the local community. In fact, some employees have three generations of their family having worked at the mill. Being a successful business there were many options for selling to other producers, but it was only via Employee Ownership that the legacy and history of the mill could be preserved.

As Eifion has commented, the use of an EOT to bring about employee ownership is the perfect way to pass a business on to people who already have a vested interest in it. Employee-owned companies are innovative, motivated and adaptable – and to see a 110-year-old business take this brave next step shows how important employee ownership is.

Derek Walker, Chief Executive of Cwmpas sums it up: “In fact, not many people realise that being employee owned is one of the fast growing and modern business models in the UK. Some of the UK’s most successful companies are employee owned, such as John Lewis, Unipart and here in Wales, Tregroes Waffles and Cwmni Da amongst others. It is a great way to pass thriving companies onto the next generation and is why we want to encourage more soon to be retiring founders and employees to consider it as an option,

The smooth transition to ownership by an EOT will help the continuation of the successful woollen mill business and cafe in its unique location, as well as protecting the business legacy of Eifion and Amanda.