Comment: Investors hope to count the pennies as Poundland buys 99p Stores

Although it’s a marriage that has taken some time to consummate – and there’s the faint possibility that the Competition & Markets Authority might put a dampener on the nuptials – it’s one that has always been on the cards.

99p Stores’ entrepreneurial founders, the Lalani family, have a track record in building businesses to sell.

They did it in the past with convenience chains Whistlestop and Europa.

Despite some store overlap, hence the interest of the competition authorities, the deal is in the interests of Poundland as well as the Lalanis.

It extends Poundland’s reach in the booming value market and is expected to enhance the single-price specialist’s earnings per share on the back of an improved customer offer at 99p Stores and longer-term benefits such as greater buying clout.

Poundland is well-placed to continue to scoop up high street trade because of its convenient locations.

The tie-up with 99p Stores also opens up the possibility of developing an increased space, multiprice store estate through the Dealz and Family Bargains formats being opened by each.

That would bring Poundland increasingly into direct competition with bigger rival B&M Bargains.

While the 99p acquisition makes sense, assuming it goes through Poundland might do better to then focus on the overseas opportunities it is also exploiting rather than getting into a showdown on UK retail parks with B&M.