Co-Op is The Future?

The owner of the Blackwell specialist books chain is handing ownership of the business to its staff because he is determined to prevent it ever being taken over and is "passionate" about keeping the family name on the company founded by his great-grandfather.

Toby Blackwell, 81, told the Guardian there were two reasons behind his decision to convert the chain into a John Lewis-style staff-owned group: "I have seen all sorts of awful takeovers. I joined the business 55 years ago, I own 100% of the votes and I want the name to stay over the door. I am passionate about that."

Blackwell said he is drawing up a new constitution for the chain – which has 37 permanent shops and 40 that open temporarily on campuses – and it would be based on the John Lewis partnership, which controls the eponymous department store chain and Waitrose supermarkets.

He and two long-standing associates will retain control of Blackwell's A shares – the voting shares, which have no dividends attached. They will be placed in a trust. The B shares, or wealth shares, will go into another, employee, trust.

"No one will own shares," said Blackwell. "There will be an annual bonus, paid out of profits, and the chairman will get the same percentage [payout] as the part-time lady on the till in a store."

He said the bookseller's staff were "very, very important" to its future success and was convinced that employees of John Lewis-style businesses performed better. "My wife loves Waitrose. The staff there smile, because they own it, and because they want to sell you more."

The John Lewis partnership has proved more resilient than many of its rivals in the recession and research by the Cass business school says there is evidence that staff-owned firms performed far better than shareholder-owned firms.

Charlie Mayfield, chairman of John Lewis, said the structure meant "a happier workforce, more accountable management, a closer alignment of risk and reward and a fairer distribution of profit".

Blackwell's decision comes after several years of losses and at a time when booksellers are facing mounting competition from supermarkets, the internet and e-books. Borders has closed down in the UK and HMV is facing shareholder pressure to sell its underperforming Waterstone's chain. But Blackwell expects to move back into profit this year and its owner said he was convinced his chain had a bright future: "We must concentrate on being a specialist. We have some of the best specialists in the world. As long as there are people who want to speak to a specialist, we will stay in business."

He said he was doing much of the work on the new constitution himself because "I don't want to hire a lot of consultants".

The Blackwell business traces its roots back to the 19th century, when it was founded as a small bookseller on Broad Street in Oxford. It expanded on to the internet and to London in the 1990s and also had a publishing arm until it was sold to rival John Wiley in 2007. Control has been handed down through the family.

Blackwell said his own children – two sons and a daughter who runs a book store in Scotland – approved of the move to employee ownership: "When we sold publishing I gave them a lot of money. They are all right about this."

He first got the idea of transferring ownership when he sat next to John Neill, the boss of employee-owned car parts supplier Unipart, at a meeting of a local training and enterprise council. He said his conversation with Neill was "an education".

As part of a bid to cut costs and reshape the business, Blackwell announced earlier this week that it is closing its head office and sending staff to work in its stores. However, 25 are to be made redundant.