Five Below, Inc. (Five Below) operates as a high-growth value retailer offering trend-right, high-quality products loved by tweens, teens and beyond.
The company offers a dynamic, edited assortment of exciting products, most priced at $5 and below, including select brands and licensed merchandise across eight worlds: Style, Room, Sports, Tech, Create, Party, Candy and New & Now.
As of February 1, 2025, the company operated a total of 1,771 locations across 44 states. The company’s new store mo...
Five Below, Inc. (Five Below) operates as a high-growth value retailer offering trend-right, high-quality products loved by tweens, teens and beyond.
The company offers a dynamic, edited assortment of exciting products, most priced at $5 and below, including select brands and licensed merchandise across eight worlds: Style, Room, Sports, Tech, Create, Party, Candy and New & Now.
As of February 1, 2025, the company operated a total of 1,771 locations across 44 states. The company’s new store model assumes a store size of approximately 9,500 square feet and is typically located within power, community and lifestyle shopping centers across a variety of urban, suburban and semi-rural markets.
The company also offers its merchandise on the internet, through its fivebelow.com e-commerce website, offering home delivery and the option to buy online and pick up in store. Additionally, the company sells its merchandise through on-demand third-party delivery services to enable the company's customers to shop online and receive convenient delivery. All e-commerce sales, which includes shipping and handling revenue, are included in net sales and are included in comparable sales.
Growth Strategy
The company's strategies are to grow its store base; drive comparable sales; and increase brand awareness.
Merchandise
Strategy
The company offers a dynamic, edited assortment of trend-right, high-quality products, with most priced at $5 or below, including select brands and licensed merchandise, targeted at the tween and teen customer.
The company's typical store features in excess of 4,000 products across a number of the company's category worlds, including Style, Room, Sports, Tech, Create, Party, Candy and New & Now. The company focuses its merchandising strategy on maintaining core categories within its stores but intend to generate high item velocity and sell-through to keep the company's assortment fresh and drive repeat visits. The company monitors trends in its target demographic market, historical sales trends of current and prior products and the success of new product launches to ensure that its merchandise is relevant for the company's customers. The company has a highly planned merchandise strategy focused on trend-right and everyday products supplemented by selected opportunistic purchases from the company's vendors to drive traffic and therefore offer the company's customers a consistently exciting shopping experience.
The common element of the company's dynamic merchandise selection is the consistent delivery of exceptional value to the consumer, with most products offered at or below the $5 price point. Many of the products it sells can also be found in mall specialty stores, department stores, mass merchandisers and drug stores, however, the company offers all of these products in an exciting and easy to shop retail environment at exceptional price points.
Product Mix
The company organizes the merchandise in its stores into the following category worlds:
Style: Primarily consists of apparel, accessories, and beauty products. The company offers an assortment of trend-right socks, jewelry, hair accessories, cozy loungewear, and ‘snarky’ t-shirts. The company’s style offering also includes an assortment of beauty products, such as personal care essentials, skincare, fragrance, and branded cosmetics.
Room: Consists of items used to complete and personalize the company’s customer’s living space, including trendy lamps, posters, frames, fleece blankets, plush items, pillows, candles, incense, lighting, novelty decor, accent furniture and related items. The company also offers storage options for the customer’s room.
Sports: Consists of an assortment of sport balls, team sports merchandise and fitness accessories, including hand weights, jump ropes and gym balls. The company also offers a variety of games, including name brand board games, puzzles, collectibles, and toys, including remote control. In the summer season, its sports offering also includes pool, beach and outdoor toys, games, and accessories.
Tech: Consists of a selection of accessories for cell phones, tablets, audio, computers, and automobiles. The offering includes cases, chargers, cables, headphones, and other related items. The company also carries a range of affordable products for audio, gaming, and gadgets.
Create: The company offers an assortment of craft activity kits, as well as arts and crafts supplies, such as crayons, markers and stickers. The company also offers trend-right items for school, such as backpacks, fashion notebooks and journals, novelty pens and pencils, locker accessories, as well as everyday name brand items.
Party: Consists of party goods, decorations, gag gifts and greeting cards, as well as every day and special occasion merchandise.
Candy: Consists of branded items that appeal to tweens and teens. This category includes an assortment of classic and novelty candy bars and movie-size box candy, seasonal-related candy, as well as gum and snack food. The company also sells chilled drinks via coolers.
New & Now: Consists of seasonally specific items used to celebrate and decorate for events, such as Christmas, Easter, Halloween, and St. Patrick’s Day. These products are most often placed at the front of the store.
Leisure includes items, such as sporting goods, games, toys, tech, books, electronic accessories, arts and crafts, and party. Fashion and home include items, such as personal accessories, ‘attitude’ t-shirts, beauty offerings, home goods and storage options. Snack and seasonal include items, such as seasonal goods, greeting cards, candy and other snacks, and beverages.
Stores
As of February 1, 2025, the company operated 1,771 stores throughout the United States. The company's new store model assumes a store size of approximately 9,500 square feet. Its stores are primarily located in power, community, and lifestyle shopping centers; approximately 4% of the company's stores are located in malls.
Merchandising, Sourcing and Distribution
The company has developed a disciplined approach to buying and a dynamic inventory planning and allocation process to support the company's merchandising strategy.
Merchandising
The company's merchandising team works directly with its product development team and the company's central planning and allocation group to ensure a consistent delivery of products across the company's store base. The company's product development team works directly with its merchandising group to identify new and improved products through international sourcing and has significant experience within the retail sector.
Sourcing
The company regularly purchases core merchandise in accordance with the company's key categories. The company also has the ability to employ an opportunistic buying strategy, when appropriate, capitalizing on selected excess inventory opportunities, to purchase complementary merchandise based on consumer trends, product availability and favorable economic terms.
The company works with approximately 1,000 vendors. The company sourced approximately 60% of its purchases from domestic vendors in fiscal 2024.
Distribution and Fulfillment
The company distributes approximately 85% of its merchandise for the company’s retail stores from itsapproximately 1,200,000 square foot shipcenter in Buckeye, Arizona, the company’s approximately 1,100,000 square foot shipcenter in Forsyth, Georgia, its approximately 1,030,000 square foot shipcenter in Indianapolis, Indiana, its approximately 1,000,000 square foot shipcenter in Pedricktown, New Jersey, and its approximately 860,000 square foot shipcenter in Conroe, Texas, with the remaining merchandise shipped directly from the vendor to the company’s stores.
For the company’s direct-to-customer e-commerce business, it distributes its merchandise from the company’s shipcenters in Buckeye, Arizona and Indianapolis, Indiana.
The company generally ships merchandise from its shipcenters to the company's stores one to six times a week, depending on the season and the volume of a specific store. The company uses either contract carriers or its own private fleet of trucks to ship merchandise to the company's stores.
Marketing and Advertising
The company's marketing strategy is designed to promote brand awareness, enhance customer engagement, and drive store and website traffic with its target demographic, as well as other value-oriented customers. The company's marketing efforts focus on promoting its unique experience whether in-store, online, or through its mobile app. The strategy includes highlighting the brand, exceptional value, and quality proposition predominantly through the use of digital advertising, influencer partnerships, seasonal campaigns, and local marketing efforts to maximize its reach and growth objectives. Additionally, the company relies on the strong visibility and presence of its store locations, email messaging, and philanthropic community fundraising to promote and further its brand image and awareness to drive traffic. The company's digital experience, anchored by its mobile e-commerce website, mobile app, and social media presence, is growing rapidly as it utilizes Instagram, TikTok, and Facebook to engage its customers with compelling digital content on a frequent basis.
For new store openings, the company seeks to create community awareness and consumer excitement predominantly through digital advertising, public relations, community outreach, and events promoting the grand opening.
In addition to the company's marketing and advertising efforts, the company maintains an e-commerce website (www.fivebelow.com). The company uses both its website and social media channels to highlight the company's featured products, value/quality proposition, store locations, employment opportunities, and grand openings.
Trademarks and Other Intellectual Property
The company owns several trademarks that have been registered with the U.S. Patent and Trademark Office, including Five Below, Five Beyond and Five Below Hot Stuff. Cool Prices. The company also owns domain names, including www.fivebelow.com, and unregistered copyrights in its website content.
Seasonality
The company's business is seasonal in nature with the highest level of net sales and net income generated in the fourth fiscal quarter (year ended February 2025) due to the year-end holiday season, and therefore, operating results for any fiscal quarter are not necessarily indicative of results for the full fiscal year. To prepare for the holiday season, the company must order and keep in stock more merchandise than the company carries during other parts of the year. Because of variation in consumer spending habits, the company experiences fluctuations in net sales, net income and working capital requirements during the year.
History
The company was founded in 2002. It was incorporated in Pennsylvania in January 2002. The company was formerly known as Cheap Holdings, Inc. and changed its name to Five Below, Inc. in August 2002.