More than 520 staff at hi-fi and TV retail chain Richer Sounds will share £3.5 million in cash bonuses after the firm’s founder handed control of the business to employees.

Julian Richer has transferred 60% of his holding in the business into an employee ownership trust, following in the footsteps of retail giant The John Lewis Partnership.

The move will see him land £9.2 million for the stake, although £3.5 million will be handed straight back to staff as loyalty bonuses.

Each of its 522 employees will pick up £1,000 for every year worked at the firm, meaning an average payout of £8,000.

But there are 39 long-serving staff who have clocked up more than 20 years at the group who will pick up hefty windfalls.

Mr Richer said the “time was right” to hand over the ownership of the business to staff – an announcement that also came as he stepped down from the day-to-day running of the firm.

He said: “I have always planned to leave my company in trust on my death for the benefit of the colleagues in the business.

“Having hit the ripe old age of 60 in March, I felt the time was right, rather than leaving it until I’m not around, to ensure that the transition goes smoothly and I can be part of it.”

He plans to stay involved in the business, but passes over the daily running to the management board, along with a newly set up colleagues’ advisory council and trustees.

The colleagues’ advisory council will be chaired by a trustee and will be made up of current staff and will represent their interests and concerns.

David Robinson, chairman of Richer Sounds, said: “It’s incredibly exciting times and allows our colleagues to feel even more connected to the company.

“They have a real stake in the success of the business and can take pride in knowing that they are shareholders, building for the future.”

Richer Sounds, which has 53 stores across the UK, has been working on the employee ownership trust plans for the past 18 months with legal and accountancy firm RSM.

Mr Richer, who founded the business in 1978 at the age of 19, had long planned to hand control of the firm to staff and had already written the plan into his will, but wanted to ensure he could oversee the transition.

Called the Richer Sounds Trust, the employee ownership plan will run according to a set of principles to make sure the firm “continues to operate in a responsible manner, and is based on honesty, commitment, trust and respect”, according to the group.

Holly Williams is Press Association Deputy City Editor.