99p Stores cashes in on downturn
The commercial director behind Northampton’s budget retailer, 99p Stores, has told Insider about the company’s plans to open up to six more stores this year. Hussein Lalani also said the company’s recent decision to branch out into higher-end products through its Family Bargains franchise was due in part to its “under-utilising” of resources.
The retailer launched its Family Bargains trading concept in June as a spin-off from the successful 99p Stores. It sells products costing up to £49.99, including big name brands.
“We had a lot of resources we were under-utilising,” said Lalani. “Our new 370,000 sq ft distribution centre in Northampton has the capacity to cater for 250 stores but was serving only 130. We can source pretty much any product from the Far East, and we also had a lot of suppliers offering us products that couldn't go into the 99p price range.”
Lalani spoke to Insider at the opening of its latest Family Bargains store in Eastbourne. He said that the search for more sites was “ongoing” – with retail park sites sought for Family Bargains and high street and town centre sites needed for 99p Stores.
There are now 130 99p Stores shops and seven Family Bargains outlets across the country, and the company plans to open five or six more this year.
Lalani would not name the locations as deals were still being agreed.
However, he did reveal that the company already had “dozens of offers” of commercial property and was “sifting through them to see if they have the right target audience and if there's a space in the town for our kind of product”.
He revealed that a shift in consumer attitudes towards bargain shopping had made the South of England increasingly attractive for the company, a recent expansion following its success in the North of England and the Midlands.
“There has never been any issue with consumer acceptance in the traditionally bargain-conscious, discount-savvy North, but it has taken the recession to tip attitudes in the South East. Consumer confidence is at an all-time low and people are actively seeking out bargains,” said Lalani.
For the year to 31 January 2010, 99p Stores delivered pre-tax profits of £1.79m and its sales grew by 63 per cent to £183.5m.
