A BITTER rift is the reason behind a planned shares sale that could lead to the break-up of one of Ireland’s oldest and biggest family-run retailers.
The widow of one of the ‘founding fathers’ of ‘almost nationwide’ department chain Shaw & Sons is selling her seven per cent stake in protest over the way her son – a director and a shareholder in the company – was treated in a management shake-up.
Sheila Shaw is also said to be furious with the company’s response to her when she first offered it her shares.
Friends claim she received an ‘insulting offer’ for them before then being told the company was not even interested in buying her shares after all.
As a result, lawyers were brought in to handle the sale.
Now ALL her side of the family have also decided to sell their shares in a move that leaves the company dangerously ripe for takeover.
U2 accountants Mazars have been brought in to handle the financial side of things for Mrs Shaw – who is in her eighties – and while top Dublin law firm Orpen Franks has been brought in to hand the legal side.
Sheila Shaw’s family shareholding amounts to 30 per cent of the company – a significant enough holding to block any resolutions by the board, which is made up of her late husband’s brothers Mervyn and Trevor and their sons.
Had the company bought Mrs Shaw’s seven per cent stake – which she inherited from her late husband Billy after he died in 2008 – it would have had the full 75 per cent shareholding it needs to ratify resolutions.
Solicitor John O’Donovon confirmed he was instructed to act on Mrs Shaw’s behalf after her initial shares offer was rejected and her son moved to Athy.
He said last night: ‘Our firm has been instructed Sheila Shaw’s family to assist in the disposal of their shareholding in the company.
‘Sheila is the only one so far to serve a transfer notice but the shareholding of her immediate family is now also up for sale.’
A family friend said last night: ‘The company has been a little bit too hasty in rejecting Mrs Shaw’s initial offer to sell her shares.
‘As a result, a far greater share in the company is now up for sale and to allow that situation to arise could hardly be described as a strategically prudent thing.’
They added: ‘Sheila, no matter how strongly she felt about the way her son Clive had been treated by other members of the Shaw family, had wanted to make sure her shares remained with the firm her late husband had helped build.
‘But she was particularly insulted by the way she was treated and now just wants out. It’s not a decision she took lightly but she has been left with no choice.’
One of the main people blamed for the rift is Shaw & Son MD Johnathan Shaw, who worked at major retailers Littlewoods and Sainsbury’s in the UK before returning to join the family business in 1990.
Since then, he has gradually built up both his influence within the firm and his company’s presence around the country.
The 42-year-old is the prime mover behind the company’s recent expansion programme – which saw millions being pumped into the firm’s Carlow branch, which was officially re-launched in August 2006.
He is believed to have been behind the decision to move his own uncle Clive Shaw, aged 58, from the flagship Carlow branch to Athy.
It is a move that particularly hurt Sheila Shaw not just because he is her son, but also because her late husband Billy had not only once owned the Carlow branch but had spent so much of his life at the store and being associated with it.
A friend said last night: ‘It would have in Sheila’s eyes seemed logical for Clive to run what had effectively been his father’s store before it was incorporated into the group during the company’s expansion in the 1970s and 1980s.
‘To see him removed from his position as director and manager of Shaws of Carlow to general manager of Athy was like a slap in the face to her and she didn’t like it. It was effectively a demotion and an insult.’
After it was first reported in July that Sheila Shaw was to sell her shares, Jonathan Shaw issued a company notice in which he stated to the firm’s 1,000 staff: ‘I want to reassure you that this company most certainly does not face a ‘split’, as has been suggested.
‘While certain legal processes have been initiated in relation to the holding company of one small shareholder, such an occurrence has no implications for the continued day-to-day operation of the Shaw Group.’
The company, which began as a small drapery shop in Mountmellick in Co Laois 1865 by the MD’s great grandfather Henry, has 16 outlets as well as property interests worth a significant amount despite the property downturn.
Although its sales have taken a pounding in the recession, the company – whose slogan is ‘Almost nationwide’ – is still valued at around €100m, with the Sheila Shaw family stake being worth around €30m.
It has invested tens of millions into either purchasing new outlets or completely gutting and rebuilding existing ones.
Sheila Shaw was unavailable for comment last night while her son Clive said: ‘I do not wish to discuss this matter as it is being handled by my solicitors.’
What happens now is Shaws & Sons’ auditors assess the market value of Mrs Sheila Shaw’s family shares.
If she is happy with the valuation, they will then be offered to the other directors and shareholders but then if they maintain that they still don’t want them, they will then be sold on the open market.