99p Stores: Hussein Lalani

The co-founder of bargain retail chain on taking over Woolies stores and the issue of child labour

The death of Woolworths was a sad tale for bargain-hunting shoppers across Britain, however it presented a world of opportunities for the Lalani family. While many shops suffered from the largest recession in post-war history, their discount chain 99p Stores has prospered from taking over 55 disused Woolies stores, helping them secure their place on the high-street.

Retail is in the blood, explains Hussein Lalani, who co-founded 99p Stores with his father Nadir and brother Faisal. Brothers and father alike were all working in the industry before opening the first store in Holloway in 2001. “Our backgrounds, and my father’s contacts in the business were a real advantage,” Hussein recalls, which helped them develop their plan and secure suppliers.

The recession has undoubtedly helped sales figures, however the brand was conceived when Britain’s economy was booming. Coming to the UK from Tanzania in the 1970s, Nadir Lalani previously built up and sold two convenience-store chains, including Whistlestop Discount Stores. The idea for his next venture came after he saw the growth and success of dollar stores in the US, prompting father and sons to start their own discount shop. They decided to sell a wide range of products, ranging from cleaning, garden and DIY, to groceries, stationery and fashion apparel, which they source mainly from the Far East. Today there are more than 3,000 items sold in stores, which matches the staggering 3,000 staff members employed by the company.

Hussein explains that the launch was very simple. They started small by opening a single store in their Holloway neighbourhood, on a previous Sainsbury’s Local site. But it was evident from day one that they were onto a winner. “From the beginning, we knew it would take off,” he recalls. “We ran various store promotions, such as offering a TV for 99p to the first nine customers through the door. This created a lot of interest from local residents, resulting in queues outside the store for the first three days of trading.” It was not long before news got out that this store was the new kid on the block.

The business was entirely self-financed up until the opening of the 19th store, in the prime shopping location of St Johns Centre in Liverpool in 2004, at which point they sought outside investment from Barclays Ventures. Giving away a minority stake in return for investment not only provided the capital needed to grow further; having Barclays behind them added credibility with landlords and suppliers alike.

Credit crunch advantage

Thanks to the recession, 99p Stores has benefitted twofold. The demise of Britain’s well-loved Woolworths was a stroke of luck for the Lalanis, as it allowed them to take on the lease of 55 ex-Woolies stores across England and Wales, most of which are in top high-street locations. The economic downturn also played a pivotal role in raising the profile of the bargain-retail sector as customers tighten their belts and look for ways to save money.

“The recession has opened us up to the middle classes, who wouldn’t previously shop in discount stores,” admits Hussein. What’s remarkable is the warm reception he says greets the stores across the country, even in areas of affluence, which is encouraging for the Lalanis, who might have been anxious about post-recession sales. Clearly everyone loves a bargain.

Poundland is the Lalanis’ main competitor, with 290 stores nationwide, although it was started nearly a decade before 99p Stores. And while recent reports of Poundland stocking products made in child labour factories have sparked ethical debates about where discount stores source their products, Hussein insists they’re careful about who they buy from. 

Currently boasting a turnover of £250m, things are looking good for 99p Stores. At present it has 135 stores around the country, providing heaps of bargains for its 1.5 million regular shoppers. If all goes to plan, it will have 170 outlets by the year’s end, rising to 250 the following year. And with a brand new state-of-the-art national distribution centre in Northampton that has the capacity to stock 400 stores, their growth could snowball further.

With a new store opening up every fortnight, the Lalanis have successfully turned a single discount store into a multi-million pound national brand in under a decade.

Comments

(will not be published)