Ohio is an attractive market for a popular ’tween and teen national retailer, and that’s why expansion of Five Below is continuing, its leader says.
“Your market has been spectacular for us. We’re very, very pleased with the market,” said Five Below President and Chief Executive Officer Tom Vellios in a telephone interview.
The Philadelphia-based retailer, which sells trendy products for $5 or lower geared toward pre-teen and teen boys and girls, first entered the Ohio market with eight stores in June 2010. The company was founded in 2002 by two executives of the former toy retailer Zany Brainy.
Five Below will have 242 stores by the end of the year in 18 states, including 16 in Ohio. The newest store will be in the Cuyahoga Falls’ Chapel Hill area on Howe Avenue next to Big Lots and in the location of a former dollar store. That store is slated to open Sept. 14. The retailer also has area stores in Fairlawn, Stow, Macedonia, Aurora and Strongsville.
The majority of the 16 stores in Ohio are in Northeast Ohio, with a few in Columbus, Boardman, Dayton and Toledo.
The retailer has been experiencing steady growth, with 50 new stores opening this year and 50 expected next year.
Products range from iPhone covers to makeup to sports gear to candy to decorations for a room.
Vellios said Five Below has a different merchandising approach.
A department store retailer, for instance, might order an apparel item in a smaller quantity and wait to see how it sells before buying more, said Vellios, who was the CEO of the former Zany Brainy.
“There’s a lot of expense associated with that. Our team will go out and identify key items — beach towels and Boogie Boards, for instance” and go to the manufacturers and find out when the best time to manufacture the item will be to buy in a lump sum.
“All of our key items we go out of our way to buy them with conviction,” he said.
Vellios said he wouldn’t consider it bulk buying, but large orders. Asked whether any items are closeout items from manufacturers, Vellios said that can happen if it’s the right product and brand and quality, but it is a small amount of overall Five Below offerings.
Vellios said a younger audience was behind the idea when he and co-founder David Schlessinger, founder of the former Zany Brainy, conceived the concept.
“Kids get much older much quicker these days. Age compression is moving kids from the toy store sooner. All these kids have some money, but the money is allowance money, or baby-sitting or chore money. We wanted to provide great trend-right products that kids will really love,” Vellios said.
Vellios and Schlessinger, who serves as executive chairman, wanted to create a “yes” store where parents feel comfortable with kids spending their money, Vellios said.
“We literally termed it Five Below. It should be that yes store that empowers kids to spend and use their own money, but also is a place that is accepted and endorsed by mom,” he said.
The company in July had an initial public stock offering and is traded on the Nasdaq.
As a public company, Vellios said he could not discuss the company’s expansion plans beyond already announced stores.
The company started on the East Coast and has been working its way west and has opened stores in the Chicago area and Detroit. Another new market is coming, but Vellios said he couldn’t say anything further.
“We believe Five Below has a placed everywhere in America, but we want to take our time,” he said. Expansion will be contiguous to existing stores and half of the new stores tend to come from existing markets, Vellios said.
Asked whether Medina or Canton areas might be next for area expansion, Vellios said, “I think it’s fair to say we love that whole region.”