Discount shops take over collapsed fashion chains

The retail sites for fallen fashion chains are quickly being taken over by discount stores, who are thriving in comparison to the struggling high street. When fashion group Peacock's closed its doors in January, Poundland quickly took ten of its

retail spaces, as well as 80 from Woolworths. When Woolworths collapsed into administration in 2008 it had over 800 stores, which are now majority owned by discount stores.

This brings to light that the UK discount retail market, including fast fashion chains Primark and Matalan, is forecast to grow exponentially from sales of £28.2bn in 2010 to £42.2bn by 2015, according to the research firm Keynote.

At a time when the big hypermarkets are expanding their own-label offer to improve margins, it is easy to see why big manufacturers of brands see pound shops and other big discount retailers as a huge opportunity to sell more goods, states the Independent.

Jim McCarthy, the chief executive of Poundland, says: "The major manufacturers recognise the potential in the sector and they want to extend their brand reach." Poundland opened its 400th UK store to a fanfare in London's Haringey at the end of last month and with this scale comes massively increased buying power.

As a result, there has been a huge shift in the level of co-operation between the suppliers of the big brands and the value retailers. Mr Lalani, who co-founded 99p Stores in 2001, says that previously it had to source branded products through wholesalers and other third-parties, but now it deals with the suppliers. He says: "The big brands have come on board and want to deal direct with us."