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Saturday 18 November 2017

Family values threaten to tear famed retailer apart

The widow of Shaws patriarch wants out after a share-sale snub, says Jerome Reilly

'Shaws -- Almost Nationwide" was the curiously self-deprecating but memorable advertising slogan for the chain of department stores that came to epitomise middle Ireland.

Shaws was the relic of auld decency, where countless mothers-of-the-bride carefully chose their outfits for the big day and later their grandsons were fitted out for their first day at school.

Long before the retailing upstarts like Dunne's began trading in the cheap and cheerful, Shaws was a beacon of retailing excellence in the old style, dating back to 1865, when the Shaw ancestors opened a drapery in Mountmellick, Co Laois.

But now, the venerable Methodist clan that carries the Shaw name and controls a business worth an estimated €90m is bitterly divided.

The split has the potential to make the business -- with outlets in 15 prime locations, and more than 1,000 on the payroll -- an acquisition target for outsiders. This was something never envisioned by the company's founders, who rooted the company firmly in the Shaw family, both owning the firm and running its day-to-day operations with extraordinary diligence.

Family relations are deeply strained following the move by octogenarian Mrs Sheila Shaw to issue a Notice of Transfer document, the first move towards disposing of her shares in the company.

As well as Mrs Sheila Shaw's stake, there are also the shareholdings of her five children -- Clive, a director of the company and store manager in Athy, Norman, who is company secretary, and three other children who do not work for the company.

The shares of the children not involved in the business -- Derek Fox, Miriam Daniels and Wendy Fox -- are also up for grabs. Together, Mrs Shaw and her children control a shade over 30 per cent of the company -- a stake that may be worth up to €30m.

For years there had been tensions between the different branches of the family. But the genesis of the move by Mrs Shaw and her children to leave the company came following the death of William "Billy" Shaw.

Billy Shaw, along with two other brothers, Trevor and Mervyn, controlled the company for half a century or more and each controlled some 30 per cent of the firm.

Trevor's son Jonathan, who served his time in senior positions in Sainsbury's and Littlewoods in the UK is now managing director of the Shaw Group. Several of Mervyn and Trevor's children are all intimately involved in the family business. This means there are three distinct branches of the Shaw family in control of the business.

Billy Shaw was the man who built up the Carlow arm of the empire, taking control way back in 1949. He was to remain at the helm in Carlow town until the 1990s.

In Carlow, Billy Shaw was a patriarchal figure, much loved by staff and customers and his personal ties to that branch ran deep. His son Clive later took over management in Carlow but when Clive was suddenly transferred to Athy, family tensions increased.

As far as Billy Shaw's branch of the family were concerned, Carlow was their bailiwick. It had, after all been owned outright by Clive's father at one point.

When Billy died around two-and-half years ago aged 81, the Service of Thanksgiving at the Methodist Church in Carlow was packed to overflowing. During his lifetime, Billy Shaw had already divvied up most of his 30 per cent of the company between his two sons, Clive and Norman, who were involved in the day-to-day running of the business.

In his will he directed his executor to sell his remaining seven per cent of shares in the company, with the monetary proceeds to be distributed to his widow Sheila and his three other children, Derek, Miriam and Wendy.

In the normal course of events, the only potential purchaser of that seven per cent of shares would be the company itself. And the matter, according to some observers, could easily have been settled without fanfare.

But it is understood that the company made what was considered, by Mrs Shaw and her children at least, a derisory offer which was later withdrawn. This not only angered Mr Shaw's widow and her three children who stood to benefit from the sale, but also Mrs Shaw's other two sons, Clive and Norman.

Clive and Norman had more substantial shareholdings of about 23 per cent between them and they were left in the invidious position of sitting on a company board that had made their mother and siblings what, they believed, was a low offer that was subsequently taken off the table. Tensions in the boardroom intensified and now the surviving family of Billy Shaw want out.

The family appointed solicitors Orpen Franks, as their legal advisors and Mazars as corporate advisors.

The solicitors wrote to the board, confirming that the Billy Shaw branch of the family wanted to sell their shares and asked if the company would purchase them. The Shaw Group declined the offer.

That rejection has now led Sheila Shaw, as the most senior member of the family, to issue the Notice of Transfer to the board. Under the company's Articles of Association Mrs Shaw was obliged to notify the firm of her intention to sell. What happens now is that the company is obliged to get those shares valued independently by auditors and that process has now begun.

When the valuation is completed, and if the potential vendor is happy with the valuation, they are then obliged to offer the shares at that price to other shareholders.

If they decline the offer then the shares can be offered outside on the open market.

Solicitor John O'Donovan of Orpen Franks told the Sunday Independent: "This is a family business and Sheila Shaw knows all the staff and still goes into the store in Carlow every week. She would have their very best interests at heart.

"She would have hoped that the company would have taken the opportunity to buy those shares when they were given an opportunity. It is our belief that the company is in a position in which it can do that. The shareholding of the family of William Shaw is for sale, notwithstanding the fact that Mrs Sheila Shaw is the only one who has so far issued a Notice of Transfer.

"They are quite happy that the shares be sold to the remaining members of the family but if that is not the case and the shares have to be sold to an outside party then so be it," he added.

The Shaw Group declined to speak to the Sunday Independent but forwarded a statement that had been issued to members of staff.

That company notice, signed by MD Jonathan Shaw, was issued following newspaper reports and stated: "I want to reassure you this company does not face a split as has been suggested in the article. While certain legal processes have been initiated in relation to the holding in the company of one small shareholder, such an occurrence has no implications for the continued day-to-day running of the Shaw Group," the statement added.

Speaking to the Sunday Independent on Thursday, Mrs Sheila Shaw said: "It's very sad indeed that it has come to this. I have great regard for all the staff, many of whom I would regard as personal friends. It should not have come to this."

Sunday Independent

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