Five Below’s merchandising ‘worlds’ make it ‘resilient’ during tough times
Asked at last week’s Investor Day how Five Below’s growth has proved so “resilient,” Joel Anderson, president and CEO, cited the chain’s “eight worlds,” namely its organization around eight categories: Tech, Create, Play, Candy, Room, Style, Party and New & Now.
“I think that is really at the heart of what makes this concept so unique,” said Mr. Anderson.
The eight categories give Five Below’s merchants broad flexibility to aggressively invest in new trends as they arrive. Mr. Anderson said, “There’s very few retailers that can go at that breadth of a trend. And that’s what’s really helped us continue to grow this business.”
“We’re not category constrained like those other category killers,” said Michael Romanko, chief merchandising officer. “In fact, we’re just the opposite. It’s our eight worlds that remain relevant.”
Mr. Romanko said Five Below is determined to be “the number one choice for teens and tweens” and the “eight worlds” merchandising approach extends Five Below’s reach to “celebrate the rituals of life and milestones of growing up.”
This includes providing the blankets, pillows and wall décor to personalize that first room, a “blinged-out” steering wheel for that first car, and the toys, bowls and bandanas for that first dog. The retailer is piloting ear piercing at 150 of its 1,200 stores.
Five Below also leaves room to highlight “disruptive product at extreme value,” such as Squishmallows, Toxic Waste Slime Licker and sensory toys. Said Mr. Romanko, “We love them all because they expose us to more customers who then love the brand.”
Mr. Anderson also said Five Below stands out for its supply chain infrastructure that “drives speed, visibility and efficiency,” and in-store experience, which he described as “executing amazing fun every day.”
At the Investor Day, Five Below set a “triple-double” goal to double sales and more than double earnings by 2025 while tripling its store base to 3,500 stores by 2030. A larger prototype featuring “Five Beyond” in-store shops with products above $5.00 is expected to support the growth.
In the near-term, inflationary pressures are seen as a benefit. Mr. Anderson added, “As consumer looks for value, that’s a real opportunity for us.”
- Five Below, Inc. Announces Investor Day 2022 Including Fourth Quarter and Fiscal Year 2021 Results on March 30, 2022 – Five Below
- Five Below (FIVE) Q4 2021 Earnings Call Transcript – The Motley Fool
- Will Five Below’s sales go above and beyond with a new store-in-store concept? – RetailWire
DISCUSSION QUESTIONS: Is Five Below’s “eight worlds” merchandising approach the key to its success? What do you think of Five Below’s goal to triple its store base by 2030?