New dawn for handmade rug manufacturers as employees become shareholders in their own business

A unique Scottish textile manufacturer, Turnberry Rug Works, which specialises in producing handcrafted rugs is looking at a bright future by becoming employee-owned.

This news comes as the company, alongside five other Scottish textile companies supported by Scottish Enterprise, shows off Scotland’s world class expertise at Decorex at Kensington Palace in London today (22 September), an international interior design exhibition.

Turnberry Rug Works was established in 1991 and hand produces bespoke rugs and wall hangings from a converted granary overlooking the sea at Turnberry, on the west coast of Scotland.

The company has eight employees and currently has an annual turnover of £450,000. Most of the team has been with Turnberry Rug Works for over 20 years.

In 2011 employee ownership was identified as the best way to secure the long-term stability of the manufacturers and preserve the unique skills which are the lifeblood of the firm.

Scottish Enterprise has worked intensively with Turnberry Rug Works through its account management approach to help accelerate the company’s growth ambitions.

Co-operative Development Scotland (CDS), Scottish Enterprise’s employee ownership support arm, guided and supported the company’s transition to employee ownership providing advice on the implementation of the new ownership structure.

John McKerchar, managing director of Turnberry Rug Works, said: “I am delighted the company is being acquired by the employees, securing its future in Scotland. What we offer is a unique and proud handmade product that cannot simply be mass produced.

“Most of our team has been with us for two decades. Employee ownership not only rewards their loyalty but gives them a real stake in the business. As a craft business our prosperity is dependent on the skills and wellbeing of our staff and our ability to pass these skills onto a new generation.

”International growth is a key priority for us, and we’re grateful to Scottish Enterprise for helping us exhibit at Decorex, a visit we hope will result in many new lucrative projects.”

Sarah Deas, chief executive of Co-operative Development Scotland (CDS), said: “This is a good move for Turnberry Rug Works and helps safeguard traditional manufacturing skills. The deal keeps it grounded in its community and shows how employee ownership can sustain businesses and help them grow.

“This is also good news for Scotland’s textiles sector, which contributes £350 million to Scotland’s economy each year through exports. Supporting Scottish companies to enter new markets with growth opportunities, both at home and overseas, is a priority for us and we wish all of the Scottish companies every success at Decorex this year.”

Turnberry Rug Works can create almost any rug design. By using only the best fibres such as merino wool, the hand-tufting method, and maintaining close relationships with dyers, the finished product is second to none.

The workforce's expertise means they can even include natural materials such as stones, leather, seashells, steel and glass; as well as silk, linen, worsted wools and felted yarns, into the designs.

Turnberry Rug Works supplies its products to interior designers, architects, corporate and private clients alike; which recently included the British Embassy in San Salvador and Virgin Money.

A 2011 collaboration with Timorous Beasties to create a tapestry, commissioned by the National Trust for Scotland, can be seen on public display at the Robert Burns Birthplace Museum in Alloway.

Throughout the transition to employee ownership, transition consultant Alistair Gibb provided specialist project management, including legal, financial and employee engagement advice.

The transaction involves the creation of an Employee Benefit Trust (EBT), which will initially acquire 49 per cent of the shares, and eventually the full balance will be purchased by the EBT out of the company profits over the next five years.