Sales and profits at Richer Sounds fell last year as demand for home cinemas and new sound systems retreated after Covid restrictions were ended.
Nevertheless, Julian Richer, who founded the electronics retailer in 1978, was still paid £10.5 million as part of the deal he struck almost four years ago to sell most of the business to its employees.
Demand for flatscreen televisions, projectors and surround sound systems jumped during the pandemic as people, unable to spend their money elsewhere, used lockdown savings to add to their home entertainment options. Richer Sounds said that trend began to reverse as 2021 wore on, however, which triggered “extremely aggressive” competition among its rivals. In addition, “supply chain issues” affected sales of some key lines.
The group’s sales fell by 5.8 per cent to £201.4 million in its latest financial year to the end of April 2022. That compared with revenue of £213.8 million in 2020-21. Margins also narrowed, which led to a 20 per cent fall in profits to £7.9 million, from £9.9 million in the previous year.
The first Richer Sounds store was opened in London 45 years ago, when Julian Richer was 19. There are now 51 stores nationwide, which are staffed by about 300 or so staff. Another 175 people work in the head office.
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Richer, 63, sold 60 per cent of the company to an employee ownership trust in 2019. The company was understood to be valued at nearly £100 million then and Richer agreed that the £60 million or so he was owed could be paid over a 15-year period.
He was paid an initial £9.2 million upfront, but immediately gave away a third of that to staff. Since the beginning of the pandemic, he has received a further £24.5 million, documents filed with Companies House show. That includes a £7 million payment made during the company’s 2021-22 financial year and a further £3.5 million payout last summer.
Richer Sounds said it had decided to accelerate the payments after an improvement in its cashflow. While it could mean its founder will get paid more quickly than anticipated, it also gives the business flexibility if the economy enters a downturn, which many in the City are predicting.
