Empire built on 99p bargains
THE 99p Stores chain of discount shops celebrates 10 years in business this week and it has been a story of non-stop expansion.
The business, which started with one shop on the Holloway Road in London, now has 138 stores and a massive 375,000 square foot HQ and warehouse at Swan Valley in Northampton.
But Hussein Lalani, the company’s commercial director, remembers it was not all plain sailing at the start. He said: “The main challenge was getting people to take us seriously. There was a lot of snootiness from landlords and even from suppliers.”
Some high street shopping centres used to think a discount store brought the tone down and were reluctant to let them in. But times change and shopping centres now look on shops like the 99p Stores as a big draw, increasing the number of customers coming and going and improving trade for other retailers. Now landlords approach the 99p Stores to see if they would like to move into their premises.
The company was set up on a small scale in London by the Lalani family. Hussein’s brother Faisal is the buying director and their father Nadir is the CEO. By the end of the first year they had four shops, by the end of the second year they had nine and a year later 16.
Then at the end of 2008 something happened in British retailing that changed everything. Woolworths left the high street.
What was bad news for Woolworths became an opportunity for the 99p Stores Ltd which moved into 65 former Woolworths shops, expanding the business at an even quicker pace.
They were in ideal locations for the 99p Stores, Hussein said: “They are always at the centre of towns. They always had prime sites.”
Business success was not new to the Lalani family however. Nadir Lalani had already built and sold the Europa food and wine store chain in the 80s and in the 90s he built up the Whistlestop chain of stores based at railway stations and airports which was sold in 2000.
Hussein is full of admiration for what his father achieved. In the Eighties Nadir Lalani made sure he offered customers convenience and late opening hours which many other retailers were not doing at the time and so the business grew. He said: “I like to think of him as a pioneer in retailing.”
And the family’s entrepreneurial streak meant they were confident about building up a third business.
He said: “We thought yes, we can build a chain. Dad did it, we know we can do it.
“It gives me the ability to have the vision. Knowing that my dad did it and my uncle has done it. There is nothing stopping us from doing it. It gave me confidence about what is possible and what isn’t.”
He said: “When you are starting a chain and opening your first store you think ‘what happens next?’ But as soon as we opened we knew it was a success.”
The first shop was a hit right from the start. Although pound shops had been around before that, Hussein said there were not many of them in London at the time. For the first three days there were queues outside the shop.
He said: “People were so surprised at what you could get for under a quid.”
And that eye for a bargain is what has kept customers coming.
The business has done well during the recession and the type of customer that uses the 99p Stores has changed since they first began.
Hussein said: “There are more middle class people coming in. Before it was lower class and people on benefits. Now we get people from all walks of society. People in suits.”
But Hussein said this trend started before the recession hit as stores like Primark and Peacocks led the way in cheap fashion and people started to want more for their money.
He said: “People, instead of bragging I paid £80, now they brag it’s £8. Bargains are in.”
The company moved to Northamptonshire and set up its headquarters in Daventry in 2005 because of the county’s central location. As the business expanded they outgrew their premises and in May last year they moved to their HQ in Northampton where there is capacity to cope with their plans to open even more shops. The company now employs around 300 people in the county at its stores and its headquarters and warehouse. It has around 3,500 employees nationally.
But isn’t there a limit to what you can sell for 99p or less? Hussein does not think the concept limits them as the company is always working to get the best prices from its suppliers and people are always looking for a bargain. But customer demand for items outside that price range has prompted the company to branch out into a new range of shops called Family Bargains.
He said: “It sells products above 99p. Still ensuring great value but we are venturing into pound-plus products. The reason for that is we get a lot of customers saying ‘can’t you get me a microwave, a toaster or a vacuum cleaner that’s cheap?’”
According to Hussein there are a number of reasons for the company doing well, including building a good management team and never losing sight of what the customer wants. He said: “One of our strengths is we are a family venture. We have different strengths and we work great as a team. If you are working for somebody instead of with family there’s a difference.”
But he explained there is no secret to their success: “It’s first and foremost hard work. You have got to put in the hours. Nothing comes easy.”
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Thursday 24 May 2012
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Comments
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lady muck
Saturday, January 22, 2011 at 09:02 AMCongratulations to Mr Lalani. Ironically, he has hit on a format whereby, the worse the economy, the more prosperous his business !
northamptongirl69
Friday, January 21, 2011 at 12:22 PMmore fool you "pushkin".
pushkin
Tuesday, January 18, 2011 at 06:30 PMGood luch, but I have never been in one and never shall.
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