The toy store, games, room decor and tech accessories target teenagers and pre-teens as their primary customers and sell most of their stuff for – as the name suggests – below $ 5. Wednesday it will open 170 to 180 new stores this year.
Five below (FIVE) opened 120 new stores last year – putting it above the 1,000 store mark – and is coming off a strong vacation. Five Below’s sales at stores opened at least a year have increased by 13.8% during the 13 weeks ending January 30 compared to the same period last year.
The company “took much of the portfolio that was previously for Toys” R “Us,” said Sucharita Kodali, retail analyst at Forrester. Toys “R” Us filed for bankruptcy in 2017 and closed more than 700 stores in North America. (WHP Global, a brand management company, bought control of the company and signaled on Monday that it could open stores in the United States.)
Five Below is “filling a gap in the market,” said Kodali.
Five Below has small, drugstore-sized stores and presents itself as a “high-energy retail concept” in regulatory documents. His slogan: “Come and have fun”. The stores have low shelves, colorful signs, pop music playing on speakers and handcarts and oil drums full of goods.
Sporting goods, games, toys, technology, books, electronic accessories and arts and crafts account for about half of Five Below’s annual sales of approximately $ 2 billion. T-shirts, beauty products and household items account for about 30% of sales, while party and seasonal items, greeting cards, sweets and snacks represent 19%. Five Below recently moved into new areas, such as esports, and partnered with Instacart to offer home delivery.
Five Below tries to separate itself from competitors like dollar stores, big stores and Amazon (AMZN) focusing on courting a target segment of buyers.
“We monitor trends in the ever-changing teen and adolescent markets and are able to quickly identify and respond to trends that are becoming popular, the company says in documents.” Our price levels allow teenagers and teenagers to buy independently, often using your own money to make frequent purchases. ”
Other discount retailers are also growing rapidly.
Dollar General (DG) said Thursday that it will open 1,050 new stores this year. Dollar Tree (DLTR), Burlington Stores (BURL), Supermarket (GO), TJX (TJX) and Aldi are also opening new locations this year.
Kodali said the discount chains are able to guarantee new rentals at favorable prices due to the closure of rival stores.
“There are a lot of desperate landlords who need tenants.”
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