Recently filed accounts have revealed that 99p Stores was suffering from weak trading long before its acquisition by Poundland.
After 7 months the UK‘s competition watchdog finally acquiesced to Poundland‘s takeover of 99p Stores in September 2015. However, recent accounts filed at Companies House have revealed that the discount chain was in financial trouble long before the deal was finalised.
In November Poundland CEO Jim McCarthy said 99p Stores “was in a mess”, seeing its disrupted trading. It has been revealed that during the year ending January 2015, 99p Store‘s sales fell 2.5% to £361.3m. Pre-tax losses shot up to £11m, compared to £734,000 the previous year.
Poundland was also forced to take on a fine last month for £400,000 from the Environmental Agency, after two 99p Stores were found to have rat infestations, and the company was convicted of 13 health and safety offences.
“For Poundland, this was principally a property transaction and we remain very pleased with the progress of the conversion and integration programme,” a spokesperson for Poundland said.
The chain gained 251 stores for its portfolio through the deal, bringing its UK estate that much closer to its 1000 store ambition.
The payment terms to the Lalanis family, the owners of the 99p Stores franchise, have been amended to reflect the business‘s poor trading at the time of purchase.