Member Article

MBO sees Newcastle family firm relinquish control of Europe’s largest luxury pen retailer

The Pen Shop, Europe’s biggest luxury pen retailer, is under new ownership for the first time in its 157-year history, following a management buy-out (MBO).

Through the MBO, which transfers ownership from the Allan family shareholders to the newly-formed Fountain Group, the jobs of its 145 staff will be protected and the business will move to a new stage in its development.

Beginning life as a vendor of newspapers and stationery in a Newcastle store, the company is now under the ownership of its executive directors.

Managing director Colin McClymont, finance director Andy Briggs and e-commerce director Vic Morgan have purchased the retailer from the Allan family, who founded the business in 1858.

The Pen Shop has 20 retail outlets across the UK, a thriving and fast-growing online operation and a wholesale business supplying pens and gifts under its own brand, Kingsley.

The Pen Shop began life as T&G Allan, named after brothers Thomas and George Allan, who opened their first shop on Newcastle’s Collingwood Street. The business took on its current name in 1946 when the first standalone pen shop in the UK was opened. One T&G Allan store remains in Morpeth.

The business has its head office at Team Valley in Gateshead and Mr McClymont has been managing director for 26 years. Its stability has been hailed as a key factor in its continued growth.

Newcastle law firm Sintons, which has worked with The Pen Shop for several decades, acted for the Allan family in the transaction, with UNW providing corporate finance advice.

Law firm Ward Hadaway and Cavu Corporate Finance acted for the Fountain Group. The Fountain Group’s working capital facility was provided by Natwest Bank.

Mr McClymont said: “The completion of the transaction is a proud moment for us and we are looking forward confidently to the future. We have some exciting new developments in the pipeline.”

Shawn Bone of Cavu Corporate Finance said: “Working alongside Martin Hulls and the legal team at Ward Hadaway we were extremely pleased to have led and structured the deal in such a way to ensure that it was completed by the deadline.”

Martin Hulls, partner at Ward Hadaway, added: “We are delighted to have assisted Colin and the team on their successful transaction. The management team’s depth of experience and passion for the business augurs well for this next stage in The Pen Shop’s long and lauded history.”

Richard Allan, Outgoing Chairman, said: “With no member of the Allan family now involved in an executive capacity within the business, it has been decided to relinquish control to Colin McClymont and his team.

“The disposal to the current management team ensures long-term stability of the business, minimal disruption to suppliers and, crucially in the family’s eyes, security of employment for the staff, many of whom are long-serving.

“Our family is delighted that the business will continue to be based on Tyneside, where George and Thomas Allan opened their first shop in 1858.

“We thank our many customers for their support in the intervening years, and particularly thank the current generation of loyal executives and staff for their service to both T&G Allan/The Pen Shop and the Allan family. We wish Colin, Andy and Vic every success in the future.”

The MBO marks the first time since its inception that no member of the Allan family has been involved in the business.

Looking to promote your product/service to SME businesses in your region? Find out how Bdaily can help →