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03 December 2018

Iconic Highland hotel becomes employee owned

Iconic Highland hotel becomes employee owned: The Priory Hotel 1

The Priory Hotel founder sells to employees after 46 years of business

Forty-six staff at The Priory Hotel in Beauly have been given a stake in the business after it became the latest company in Scotland to become employee-owned.

Founded in 1972 by Stuart Hutton, the hotel has become a local institution, growing from 12 bedrooms to 39 bedrooms and offering a busy restaurant, bar and coffee lounge which are frequented by guests and locals. Over the years, Stuart and his family have played a key role in the day-to-day management and running of the hotel. However, after over forty years of business, he began to consider his retirement and what that might mean for the hotel’s future.


Commenting on Stuart’s options, his son Kenneth Hutton explained: “My dad was at the stage where he was considering a step back from the business. He had put the hotel on the market recently and had a couple of trade sale offers, however he didn’t feel that the prospective buyers were the right fit for the hotel. A staff member had once mentioned employee ownership as a potential solution to this – it meant the business would be sold to those who know it best, and it wouldn’t be taken over by a large chain. The option stuck with my dad and when he felt like he had the correct management team in place, the time was right to begin progressing the buyout.”

Kenneth grew up with the hotel since childhood and despite taking a different career direction as a golf professional, he has become involved again over the past few years.  He will become managing director of the company, and will oversee its operation, as his dad begins to remove himself from the business.  Some of the key management team will assume positions on the board. Kate Melens will be the General Manager of the hotel, bringing a wealth of experience and a fresh view to the way the business needs to develop with changing times.

Kenneth continued, “Beauly is a small town and many people from the area have worked at the hotel over the years. Many marriages were forged at our discos and musical events in the 70’s and 80’s, and people still travel from far and wide for our food offerings, and in particular our famous Sunday carvery and traditional High Teas.  The Priory Hotel is a huge part of the local community and a takeover by a large chain could have put jobs and company values at risk. By selling to his employees, my dad knows that the business he spent 46 years building is now in the hands of a loyal and invested team that wants the best for the hotel and the local area. The staff are very excited by the news and are looking forward to learning more about the role they will play in the hotel’s future.”

An Employee Ownership Trust has been formed which will hold 72% of the shares on behalf of the employees. Kenneth Hutton will retain the bulk of the remaining shareholding, to demonstrate that the family remains committed to the continuation of the hotel. The transition to employee ownership was supported by Co-operative Development Scotland (CDS) and Highlands and Islands Enterprise (HIE) with the process managed by Ownership Associates, legal services by Anderson Strathern and accountancy support from Johnston Carmichael. 

Stuart added: “The support we received from Ownership Associates throughout the transition to EO was invaluable. We were fully informed on how the model works and what it would mean for the business and we were given great advice on how best to structure the company.  They were also very helpful in explaining the process to our staff. Our accountants, Johnston and Carmichael, and in particular John Todd, were superb as ever in making sure the numbers all worked.  Anderson Strathern provided excellent legal advice throughout. ”

The deal was part financed by Handelsbanken, with the remainder by means of vendor loan.

Stuart explains. “We spoke to a few potential funders and found Handelsbanken to be very supportive of our move to employee ownership, and they had the deal prepared quickly and efficiently.”

Sarah Deas, director at CDS, the arm of Scotland’s enterprise agencies which promotes employee ownership, said: “Stuart has spent over half his life building a successful and much-loved local business. By handing control over to a team that he knows and trusts, the hotel’s important standing in the community is protected, along with jobs and company ethos. We’re thrilled to welcome The Priory Hotel to Scotland’s growing EO community and wish the business every success for its future.”

Peter Allen, account manager at HIE, said: “Transferring ownership to employees is a great option for business owners and we are delighted to help Stuart and Kenneth and the team through the process. Employee ownership is an effective way to drive business performance by boosting productivity, increasing employee engagement and keeping the company in the community. We would encourage anyone thinking about options for future structures to choose employee ownership to help build a more diverse and sustainable economy.”

Bruce Farquhar, Chairman at Anderson Strathern whose Corporate & Commercial Contracts team advised the family on the deal, sees employee ownership as the key to succession for many Scottish businesses.  “A sale to an Employee Ownership Trust provides a tax effective exit route for business owners.  Many entrepreneurs don’t want to see someone else’s name over the door of the business they started.  The employee ownership option allows the former owner to get a good price for the company, and remain as involved as they want to be.  It’s proving to be an increasingly popular option.”

Statistics consistently demonstrate that employee-owned businesses outperform their non EO counterparts in terms of higher levels of profitability; improved business resilience during times of recession; increased productivity brought about by higher levels of engagement and enhanced employee wellbeing.

There are around 100 employee-owned companies operating in Scotland, with approximately 7,000 employee-owners generating a combined turnover of around £940million. 


For further information, commentary or photography, please contact the CDS team at Smarts Communicate on 0141 222 2040 or email



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The Priory Hotel 1

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The Priory Hotel 2

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