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FEATURE
Five Below heats up holiday season for
cost-conscious kids
by Rich Timlen
Now kids don’t have to spend their whole
allowance on one trip to the mall. A new concept targeting tweens and teens
(ages eight to 15) without unlimited access to their parents’ pockets is
starting to sprout up in malls along the East Coast.
Five Below offers thousands of products for teens, from sporting goods, games,
jewelry and school supplies at a cost that won’t break the piggy bank. Items
range from $1 to $5. The concept is aimed at making younger shoppers feel like
they have control over their own money instead of relying on mom and dad for
their purchases.
The company currently operates seven shops, with locations at Gateway Shopping
Center in Wayne, PA; King of Prussia Mall in King of Prussia, PA; FairFax
Shopping Center in Wilmington, DE; Willow Grove Shopping Center in Willow Grove,
PA; Oxford Valley Mall in Langhorne, PA; Hawthorne Shopping Center in Lancaster,
PA and Marlton Crossing Shopping Center in Marlton, NJ. The stores typically
average from 3,000 sq.ft. to 4,500 sq.ft. and are decorated with colorful murals
with hip music pumping in the background. Plans call for the company to expand
to 200 stores during the coming five to seven years, with eight locations slated
to open in the near future. Early plans call for more expansion into southern
NJ. This concept is basically a new spin on dollar stores, which have seen a
nationwide growth at an annual rate of 10 percent to 12 percent.
To sell quality items at affordable prices, Five Below buys large quantities
directly from manufacturers, with many of the products made in either China or
Taiwan. Some of the “priciest” items include mini remote controlled vehicles,
lava lamps, playing cards, board games, footballs, make-up and other
accessories. Shoppers can pick up two bottles of water for $1, while young girls
can purchase as many as eight hoop earrings for $4. There are also name-brand
items like South Park, SpongeBob and Hello Kitty. The company’s slogan is
“Whatever you got will buy a lot.”
The good news for Five Below is that approximately 85% of a kids’ money is
disposable income. That number goes down to 10% for the average adult. Plus, the
company has seen numerous studies reporting that more than a quarter of the
spending nationwide is for goods and services for or by teenagers.
The chain is being operated by David Schlessinger, founder of Zany Brainy and
Encore Books, and Tom Vellios, former CEO of Zany Brainy. Schlessinger began the
Philadelphia, PA-based company last year when his sons, Jake, 11, and Louis, 7,
began telling him that they were too old for kiddie toys. Schlessinger
originally created Encore Books, a Philadelphia-based chain of discount
bookstores in the 1970s while still a student at the University of Pennsylvania.
He sold the chain to Rite Aid in 1986. In 1991, he started Zany Brainy, a
high-end chain selling learning toys for children. He sold Zany Brainy early in
2001. Recently, Cohn Management Group of Bala Cynwyd, PA closed a $2 million
private equity fund that is investing in Five Below.
For more information, contact Five Below, Inc., 1616 Walnut Street, Suite 1600,
Philadelphia, PA 19103; 215-546-7909; Web site:
www.fivebelow.com.
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