Tue, 28 Mar 2017 | ADMINISTRATION
Poundland has placed 99p Stores - the rival discount chain it acquired for £55 million in 2015 - into administration as the high street’s woes continue.
The firm admitted that its previous management team had “difficulties digesting” the acquisition of the chain, which was founded in 2001 by the Lalani family.
After it bought more than 250 99p Stores shops Poundland set about rebranding them and switching the leases over. However 60 sites remained on 99p Stores leases and it is these that are affected.
Poundland said they were “unprofitable” outlets, likely because they were sat near existing Poundland stores.
AlixPartners will handle the administration process. It’s thought that jobs will not be affected because 99p Stores employees will be given new jobs at other Poundland shops.
In a statement Poundland’s owner Steinhoff, a South African retail firm which paid £450 million to take full control of the company last year, blamed previous management for the failure.
“It’s no secret that the previous management of Poundland had difficulties digesting its 99p Stores acquisition,” it said.
“However, we’ve largely completed the store closure programme that addressed the remaining overlaps from that 99p acquisition.”
AlixPartners said: “This appointment comes in support of Poundland Group Limited’s strategic decision to operate their entire retail estate under the Poundland fascia. No employees are affected by this appointment.”
99p Stores is the latest retailer to go into administration as competition and rising costs make life difficult for the British high street. Brantano, the value footwear chain, fell into administration last week, as did footwear firm Ted & Muffy.
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