Five Below: A Dollar Store for Teens and Pre-Teens
By Tom Ryan
The former founders of Zany Brainy have come up with a concept aimed at budget-conscious tweens and teens. With around 100 stores currently, management recently announced plans to double its store count over the next two years.
The Philadelphia-based retailer, which opened the first Five Below in 2002, takes its name from a merchandising strategy calling for the sale of all products for $5.00 or less in a “trend-right, extreme value, upbeat, cool environment,” according to company marketing literature. Appealing to both boys and girls, the mix includes candy, party supplies, costume jewelry, bath & body, stationary and school supplies, sports games, posters and other simple home décor, novelty and “gag” items, and various media products, such as iPod cases and chargers, DVDs, and video game accessories.
“My favorite way to describe it is as a five and dime for the iPod generation,” Elizabeth Romaine, the marketing manager for Five Below, told the Pittsburgh Business Journal.
In an interview with DSN Retailing Today in 2006, Tom Vellios, co-founder and CEO, said that many 10- to 15-year-olds don’t have a store that they can call their own after they graduate from Toys R’ Us. Hipper stores such as Hot Topic appeal to older teens, he said.
“Something had to fill the void…when the old five and dimes went out of business,” Mr. Vellios said. “Here’s an opportunity to try and offer a destination for teens and preteens to go to.”
More recently in announcing plans to enter the Pittsburgh market, Mr. Vellios said Five Below is ramping up its expansion efforts. It is opening 20 stores this year and plans to open 30 or 40 next year. Five Below operates in nine states on the East Coast, from New Hampshire to Virginia.
“Our performance continues to be strong, and we’re thrilled to be able to accelerate our growth plans,” said Mr. Vellios. “This is an opportune time to bring high-value retail opportunities to new markets. Our model drives traffic to shopping centers and positions us well to continue capitalizing on available real estate throughout the Eastern U.S. Landlords have been seeking us out, as we are one of the few tenants in the 7,000-10,000 square foot size range that can bring traffic to their centers, and is looking to open a lot of new stores.”
With the tough economy, the founders also believe the format fits in today’s climate.
“Our offering of brand-name, trend right merchandise, all at extreme-value prices, continues to attract a growing customer base among teens, tweens and people of all ages,” said David Schlessinger, chairman and co-founder.
Discussion questions: What do you think of the Five Below concept? How big an opportunity are dollar stores aimed at the younger crowd?
- Five Below
- Discount teen retailer Five Below to open Pittsburgh stores – Pittsburgh Business Times
- Five Below Signs Lease for 100th Store and Enters Pittsburgh Market – Five Below, Inc./Business Wire
- David Schlessinger Launches Five Below, Hot New Retail Concept At The Fairfax Shopping Center – Bari Consulting
- Five Below is retail mecca for shoppers 15 and below – DSN Retailing Today