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Discount retailer 99p Stores goes into administration

Published: 28 March 2017 - Jenny Wonnacott

High street discount chain 99p Stores has been put into administration by its owner Poundland, with 60 stores across the country closing down.

The administration of 99p Stores will “have no impact on Poundland” according to the retailer
The administration of 99p Stores will “have no impact on Poundland” according to the retailer

The group was bought by Poundland back in 2015 for £55m, with bosses at Poundland admitting it had “difficulties digesting” the portfolio of stores following the purchase. Around 250 of the stores transferred to Poundland leases, with the remaining 60 staying on the 99p Stores leases under a subsidiary company. It is these stores which are now closing.

Alix Partners has been appointed as adminstrator. A statement from Poundland says: “"We can confirm that the separate 99p Stores company has entered administration.

"The administrator is Alix Partners and they will be responsible for communication regarding the company and its liabilities.

As we've always said, it's no secret the previous management of Poundland had difficulties digesting its 99p stores acquisition.

"However, we've largely completed the store closure programme that addressed the remaining overlaps from that 99p acquisition - importantly, with very limited impact on jobs because we have stores located near to those we're closing.

"The administration has no impact on Poundland itself which, of course, is a robust, thriving business serving over seven million shoppers a week."

Poundland was recently taken over by South African retailer Steinhoff for £597m. Steinhoff made waves in the home improvement industry last year when it entered a bidding war with Sainsbury's to buy out Home Retail Group's Argos, ultimately backing out at the eleventh hour.

Comments

31 March 2017 10:35:44
Patrick

Call me cynical, but isn't this just another form of asset-stripping? It seems to me that Poundland, whether it be the previous owners or Steinhoff, have assimilated all the 99p Stores they wanted and are now dumping the rest. Interesting the remaining stores are a 'separate 99p Stores company' - does this mean the taxpayer will have to pick up the redundancy bill while the parent company dodges its responsibility in the same way that Comet's owner did not many years ago? Hmm..... all seems a bit suspect to me.


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