£80m tag for 99p Stores dismissed as ‘fanciful’

The rumoured £60m-£80m asking price for 99p Stores is “fanciful”, according to private equity experts.

Last week it emerged that the single-price discounter had appointed DC Advisory Partners to work on a strategic review of the business. But industry insiders said a potential sale had been an “open secret” for several months.

“Barclays Ventures [which has a 31% stake] has been trying to get shot of the business for a while,” said one industry source. “The current format is struggling with cost pressures and is constrained by the fixed retail price. The market is so dominated by Poundland that it’s hard to see if there’s room for a me-too player.”

DC Advisory Partners acted for Poundland during its sale to Warburg Pincus in June last year. Early last year 99p Stores said it planned to see out 2010 with more than 200 stores, but this week it opened only its 141st.

99p Stores reported pre-tax profits of £4.8m in the year to 31 January 2011.

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