Five plans below to open 1,000 new stores – CBS Boston

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(CBS/CNN) – Toys “R” Us filed for bankruptcy in 2017 and closed all of its stores. That left an opening for rivals like discount toy chain Five Below to fill the void.

Five Below, as the name suggests, sells most of its toys, games, room decor, and tech accessories for less than $5. The company said Wednesday it plans to open 1,000 new stores over the next three years.

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The chain has opened hundreds of stores each year for the past few years to fill the void left by Toys “R” Us and appeal to discount-seeking shoppers. Five Below, which targets teens and tweens as its primary customers and currently has around 1,200 locations, sees an opportunity to add 2,500 new stores by 2030.

Five Below already has a strong presence in New England, with 24 stores in Massachusetts and five in New Hampshire.

In 2010, when Five Below had just over 100 stores, co-founder David Schlessinger spoke to CBS News on the chain’s appeal in a weak economy when customers are looking to stretch their dollar.

“People don’t come into our store and say, ‘How can I get a lower price on this item?’ They say, “I’m thrilled that I can buy a lot of things that you have for $5 or less, but what I really want are the brands and the quality and the trend that I want,” Schlessinger said.

The chain’s latest growth spurt also reflects the larger boom in discount stores. The sector has been somewhat immune to the rise of online shopping and other challenges plaguing many brick-and-mortar retailers.

Last year, for example, three-dollar chain stores accounted for nearly half of all new stores opened in the United States.

Discount clothing outlets like TJ Maxx and Burlington, discount grocers like Aldi and others are also opening hundreds of new stores every year.

Attracting teens and tweens

Five Below’s locations are relatively small, and the chain describes itself as a “high-energy retail concept” in regulatory filings. His slogan: “Let go and have fun”.

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Shops have low shelves, colorful signs, pop music played over loudspeakers and wheelbarrows, and oil drums full of goods.

Sporting goods, games, toys, tech gadgets, books, electronic accessories, and arts and crafts account for about half of Five Below’s approximately $3 billion in annual sales. T-shirts, beauty products and homewares account for about 30%, while seasonal and party items, greeting cards, candies and snacks make up the rest.

Five Below recently branched out into new product areas, such as esports, and partnered with Instacart to offer door-to-door delivery.

The company seeks to differentiate itself from competitors like dollar stores, big-box chains and Amazon by focusing on appealing to a targeted slice of shoppers.

“We monitor trends in the ever-changing tween and teen markets and are able to identify and respond quickly,” the company said in filings. “Our prices allow tweens and teens to shop independently, often with their own money.”

However, despite Five Below’s new store initiative and a 3.4% increase in comparable sales in its latest quarter, investors were not impressed: the chain’s shares fell about 5 % Wednesday.

Despite the decline, Five Below still has “good long-term prospects,” said Telsey Advisory Group analyst Joseph Feldman.

(© Copyright 2022 CBS Broadcasting Inc. All rights reserved. CNN’s Nathaniel Meyersohn contributed to this report.)

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