Newsday: Five Below’s fast expansion to include 4 more Long Island stores
Five Below’s fast expansion to include 4 more Long Island stores
By Tory N. Parrish
Furry pillows, sparkly cellphone cases and fruity candy are paying off for Five Below, as the teen-targeting retailer accelerates its expansion plans.
On Long Island, where Five Below has more than doubled its number of stores to 20 since 2019, the retailer plans to open four more this year — in Selden on Oct. 20, Woodmere on Nov. 10, and Hauppauge and Hicksville on Dec. 1, a spokeswoman for the retailer said.
The four new Long Island stores will be among the retailer’s record-high number of new store openings, more than 200 nationwide in the current fiscal year, which will end Feb. 3, according to Five Below Inc.
“The expansion into more parts of Long Island marries back to the overall strategy of the brand,” the spokeswoman said Friday, adding that the new stores each will employ 15 to 20 part-time workers.
Founded in 2002, Five Below sells trendy toys, games, technology, makeup, home décor and other products, most of which are priced at $5 or less.
The Philadelphia-headquartered retailer currently has more than 1,400 stores, including 150 opened last year, in 43 states.
In March 2022, the chain announced that it had increased its U.S. growth goals, from 2,500 stores to more than 3,500 by the end of fiscal year 2030.
Five Below’s expansion strategy includes opening clusters of stores in high-visibility, high-traffic retail centers in urban, suburban and semirural markets to “densify” the areas.
“Opening stores within existing markets enables Five Below to benefit from enhanced brand awareness and to achieve advertising, operating and distribution efficiencies,” Five Below said in its 2022 annual report.
Here is the rundown of the four new stores planned for Long Island:
- Hauppauge: Five Below will open a 10,005-square-foot store at 371 Smithtown Bypass in the Hauppauge Shopping Center in a space Pet Valu vacated in 2019, according to a spokeswoman for Federal Realty Investment Trust, the Rockville, Maryland-based owner of the center.
- Hicksville: The approximately 10,500-square-foot Five Below will be opening at 410 S. Oyster Bay Rd. in some of the space that a T.J. Maxx vacated in the Woodbury Shopping Center, said Greg Messina, spokesman for the property’s manager, Breslin Realty Development Corp. in Garden City.
- Selden: Five Below will occupy about 9,700 square feet at 787 Middle Country Rd., 17C, in College Plaza, where it will take some space that a Blink Fitness vacated, said Kristen Moore, spokeswoman for the shopping center’s owner, Brixmor Property Group in Manhattan.
- Woodmere: The approximately 10,000-square-foot Five Below will be at 253-01 Rockaway Blvd. in the 5 Towns Shopping Center, said Sam Jemal, a partner in Rockaway Realty Associates, the Manhattan-based owner of the center. The store will be in a portion of the space that a Kmart vacated in 2018, he said.
In addition to opening new stores, Five Below’s growth plan includes expanding its Five Beyond store-within-a store concept, which was introduced in 2019 to sell items priced at $6 or more.
Customers who buy a Five Beyond item spend more than twice as much as those who buy only Five Below items, Five Below CEO Joel Anderson told analysts during an earnings call in March.
The retailer has converted more than 600 stores to include Five Beyond and other features since March 2022, he told analysts in August.
According to the Five Below spokeswoman, “This is part of an overall store transformation — stores are not only getting a new Five Beyond but they are also getting services like helium balloons [inflated in the store] and ear piercing.”
Discount stores in general are doing well amid consumers’ concerns about high inflation, but that’s not a major reason for Five Below’s fast growth, retail experts said.
Five Below is able to open a lot of stores each year, about 15% more, due to its quick “cash-on-cash payback,” which is the amount of time it takes a business to recoup its costs of opening a new location, said Jeremy Hamblin, a senior analyst who covers the consumer sector for Minneapolis-headquartered Craig-Hallum Capital Group LLC.
A new Five Below store generates on average $2.2 million in sales in the first year, with about $550,000 of profit, he said.
In its second fiscal quarter, which ended July 29, Five Below’s net sales increased by 13.5% to $759 million, compared to $668.9 million in the same period a year earlier.