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The toy, game, bedroom decor, and tech accessory store targets teens and tweens as key customers and sells most of its products for – as the name suggests – under $ 5. It said on Wednesday it would open 170 to 180 new stores this year.
Five below (FIVE) opened 120 new stores last year – which puts it above the 1,000 store mark – and has just had a great holiday season. Sales of Five Below at stores open for at least a year were up 13.8% in the 13 weeks ending Jan. 30 compared to the same period last year.
The company “took a large chunk of the portion of the portfolio that once went to 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 a controlling stake in the company and said Monday it may open stores in the United States.)
Five below “fills a void in the market,” Kodali said.
Five below has small stores, the size of a drugstore, and advertises itself as a “high energy retail concept” in regulatory filings. Its slogan: “Let Go & Have Fun”. The stores have low shelves, colorful signs, pop music playing over loudspeakers and wheelbarrows and oil barrels full of wares.
Sporting goods, games, toys, tech, books, electronics, and crafts account for about half of Five Below’s roughly $ 2 billion annual sales. T-shirts, cosmetics and household items account for around 30% of sales, while party and seasonal items, greeting cards, candy and snacks account for 19%. Five below has recently moved into new areas, such as esports, and partnered with Instacart to offer home delivery.
Five Below is trying to separate itself from its competitors like dollar stores, big box stores and Amazon (AMZN) focusing on wooing a targeted 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 become common,” the company says in its materials. make frequent purchases. ”
Other discount retailers are also growing rapidly.
General dollar (DG) said Thursday it would open 1,050 new stores this year. Dollar tree (DLTR), Burlington Stores (BURL), Grocery (TO GO), TJX (TJX) and Aldi are also opening new sites this year.
Kodali said discount chains are able to secure new leases at favorable prices due to rival store closings.
“There are a lot of desperate landlords who need tenants.”
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