Discount retailer Poundland has put in a bid to purchase 99p Stores for £55 million.
The offer – still subject to approval by competition authorities – sees the firm sign a conditional deal for £47.5m in cash, and £7.5m in stock.
Should it secure approval, the sale will include 99p Stores’ network of 251 shops, trading as 99p Stores and family Bargains.
Poundland chief executive, Jim McCarthy, said: “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.”
Poundland has opened almost 600 shops across the UK, Ireland and Spain since 1990, and plans to open 16 new shops per year for the next two years in the UK and Ireland.
According to the Fung Business Intelligence Centre, pound shops have boomed in the UK, mirroring the rise of discounters such as Aldi and Lidl, reports BBC.
UK discounters, including Poundstretcher and Poundworld have so far risen to success through purchasing excess stock from grocers, getting major brands to make smaller packages for them to sell, using own-brand labels and buying major brand stock from overseas.
While the current prospects look good for retailers such as Poundland, marketing consultant, Nina Rahmatallah believes Poundland now faces a challenge in ‘ensuring cusomters continue to shop there as the economy grows stronger.’