Worker co-op buys three Stonington businesses, saves 62 jobs
Three stores in Stonington will be taken over by a cooperative started by employees.
Employees of Burnt Cove Market, V&S Variety and Pharmacy and The Galley in Stonington have purchased those businesses from retiring owners Vern and Sandra Seile.
The purchase, announced in a press release on Tuesday, was facilitated by the employees creating the Island Employee Cooperative Inc., the largest worker cooperative in Maine and one of the larger worker co-ops in the United States. In a worker co-op, each worker-owner has one (and only one) share in the corporation and one vote in its governance.
“This is a once in a lifetime opportunity,” Alan White, president of the cooperative, said in the release. “Many of us have worked in these stores for decades and never imagined this possibility. We know we have a lot to learn and a lot of work to do to be successful, but success means we will really achieve the American dream — economic security and building wealth through ownership, both for our families and our community.”
As reported by Mainebiz in March, after 40 years in business the owners wanted to sell the stores, but keep them locally owned and viable. When one potential buyer didn’t work out, the owners and their employees sought alternatives and worked with the Cooperative Development Institute and the Independent Retailers Shared Services Cooperative, a purchasing cooperative of independent grocers in New England, to get the technical and business assistance they needed to transfer ownership of the companies over to the workers. It took nearly a year to create the worker cooperative and secure financing to purchase the stores.
The co-op turned to two Community Development Finance Institutions — Wiscasset-based CEI and the Cooperative Fund of New England— to obtain financing to buy the businesses.
“People across the country have been trying to figure out the best way to assist business owners who want to consider conversion to employee ownership, either as a growth strategy or as a retirement strategy,” Rob Brown, director of CDI’s Business Ownership Solutions program, said in the release announcing the purchase. “In many ways this deal provides the model, and we look forward to working with the IEC into the future to ensure their success.”
“This financial transaction represents the best kind of collaboration to build wealth in Maine’s rural communities,” CEI Loan and Investment Officer Cole Palmer said in the release.
Gloria LaBrecque, Northeast loan and outreach office with the Cooperative Fund of New England, characterized the co-op’s purchase of the three businesses as a “milestone achievement” that retains 62 “essential jobs” in the communities of Deer Isle.
Mark Sprackland, executive director of the Independent Retailers Shared Services Cooperative, said his organization serves smaller independent grocers and retailers throughout New England.
“We hope that this is only the first of many locally owned and operated co-ops that we can help form in communities focused on sustainable growth,” he said.
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