Single price general merchandise retailer Poundland and value general merchandise retailer 99p Stores have signed a conditional sale and purchase agreement for Poundland to acquire 99p Stores for £55 million.
The proposed transaction includes 99p Stores’ network of 251 stores (trading as ’99p Stores’ and ‘Family Bargains’), which serve more than two million customers a week, as well as its warehouse and distribution centre. In the year to February 1 2014, 99p Stores had sales of £370.4 million.
The acquisition is conditional on the approval of the Competition & Markets Authority (CMA). Given the size of the two companies, the CMA will review the proposed transaction. It may require Poundland to take actions or give remedies to address any impact on competition arising as a result of the proposed transaction. The CMA will start its public consultation and review process shortly and this process is expected to take at least two months. The proposed transaction is conditional on an outcome of this CMA process that is acceptable to Poundland and to the CMA.
Poundland said that whether the acquisition is completed or not, it is committed to its store rollout in the UK and Ireland and the development of its trial in Spain, which could lead to further expansion in continental Europe.
Commenting on the proposed transaction, Poundland chief executive Jim McCarthy said: “This is a good deal for both businesses and will benefit customers and shareholders. Through working together, Poundland will improve choice, value and service for 99p Stores’ customers, bringing Poundland’s proven know-how and range to 99p Stores. We also believe that we can improve the performance of the 99p Stores estate and generate further value for Poundland’s shareholders. We look forward to working with the CMA as it undertakes its review.”
Poundland describes itself as Europe’s largest single price value general merchandise retailer. Winner of the 2014 Grocer Awards for Variety Discount Retailer of the Year, it has opened nearly 600 stores in the UK, Republic of Ireland and Spain since 1990. In the Republic of Ireland and Spain, Poundland trades under the Dealz brand.
Poundland stocks branded and own brand products, all for the single price point of £1, to an average of 5 million customers every week. Each store stocks some 3,000 products and over 1,000 well-known brands across 17 shopping categories including food and drink, health and beauty, household, gardening, DIY, pet, stationery, books, DVDs and toys.
Last year, Poundland launched its first ever celebrity-endorsed range, Jane Asher’s Kitchen (which comprises bakeware, baking accessories, preparation equipment, cake mixes, icings and decorations) and in April it plans to launch Tommy Walsh’s DIY range. This includes around 200 products, which have been over a year in development.