99p Stores guns for growth as profits soar
Value retailer 99p Stores is gunning to break the £200m turnover barrier and operate 120 stores by the end its financial year.
The retailer expects to open 48 stores this financial year – more than double the target that it forecast before Christmas. The retailer, which has 88 shops at present, will open its 100th store in the middle of August and expects to have 120 by the end of January next year.
Commercial director Hussein Lalani said: “Our banks are encouraging us to get to 100 stores and we’re gunning for it. We are getting good deals but are focusing on primary locations. This is our chance to really establish ourselves.”
He added: “We’ve been trading for more than eight years now and have become part of people’s shopping habits. We have the brand recognition – people know who we are and shoppers can be relatively certain they’re getting the cheapest price in the country.”
In the 12 months to January 31 total sales grew from £94m to £113m while like-for-like sales jumped 4.3 per cent. Pre-tax profits more than doubled from £142, 924 to £333,348 in the period, while EBITDA increased from £2.7m to £3.2m.
Lalani said trade at present is going “very well” with total sales soaring 48 per cent in the financial year to date and by the year-end on January 31, 2010, he expects EBITDA to rocket to £8m.
Lalani said shoppers are continuing to trade down in the recession, and has noticed a “lot more AB consumers” in his stores. He expects this trend to continue when the economy recovers.
99p Stores is capitalising on the trend for staycations and has introduced fishing, camping, and gardening product lines.
Lalani cited the success of its newly opened Stratford store as an example that shoppers are flocking for bargains. The shop opened in January and is trading 100 per cent up on budget.
The retailer has also opened 25 former Woolworths stores so far this calendar year.
Lalani added that 99p Stores is unlikely to launch a transactional website to compete with the website its rival Poundland is planning.