Poundland puts 99p Stores in administration

The Willenhall-based £1-for-everything business bought the rival budget chain in a £55 million deal 18 months ago.

Most of the 250 99p Stores have been converted to Poundlands but 60 stores were left over. They were all closed down in the first three months of this year and nearly all the staff have transferred to nearby Poundland branches.

The separate 99p Stores company has now been placed in administration with Alix Partners, who will handle the company and its liabilities.

The 99p Stores takeover was delayed for months by a competition watchdog investigation that finally found no cause for concern. But the hang-up resulted in substantial additional costs for Poundland when it came to absorbing the business and converting its shops.

It tried to speed it up but the cost of the takeover punched a big hole in Poundland's 2016 profits. And it left Poundland vulnerable to a takeover bid by South African retail group Steinhoff , which paid £610 million for it last year.

A spokesman for the business said: "It's no secret that the previous management of Poundland had difficulties digesting its 99p stores acquisition.

"However, we've completed the store closure programme that addressed the remaining overlaps from that 99p acquisition – importantly, with very limited impact on jobs because we have stores located near to those we're closing.

"The administration has no impact on Poundland itself which, of course, is a robust, thriving business serving over 7m shoppers a week."

Poundland said "almost everyone" working at 99p Stores had been found a job.

Founded in the Black Country in 1990, Poundland now has more than 700 UK stores with others in Spain and Ireland.

As well as its headquarters in Willenhall it operates a major depot at Bilston, together employing around 700 people.