Upcoming Extension of Higher-Priced Concept to One-Third of Five Below Stores by End of Year
Five Below, the popular discount retailer known for its $5 limit on all items, is stepping up its game with the introduction of the "Five Beyond" store-within-a-store concept. This innovative expansion strategy allows the company to offer products priced higher than its signature limit, up to $25, while maintaining its core identity as a value-driven shopping destination.
Key Offerings
The Five Beyond concept includes a diverse range of products, such as clothing and personal care items, often in collaboration with recognizable brands. For instance, the Everlast Logo Hoodie, priced at $10, is one of the offerings under this initiative.
Catering to Diverse Needs
Anderson, the CEO of Five Below, described the Five Beyond store-within-a-store concept as part of an effort to "elevate the experience for both our customers and our crew." By offering a more extensive product range, Five Beyond aims to improve the overall shopping experience for customers seeking a wider selection of items.
Expansion Plans
Five Below added permanent Five Beyond sections to 140 stores in 2020 and plans to double that number in 2021. The company aims to expand the Five Beyond concept to 30% of its fleet by the end of 2021. In a press release, Anderson announced plans to add 170 to 180 of the Five Beyond prototypes in 2021.
Online Expansion
In addition to physical store expansions, Five Below is also working to add exclusive online items. This includes an expansion of Bugha gaming products and a partnership with illustrator and author Andrea Pippins.
Analyst Praise
Analysts with Telsey Advisory Group praised Five Below's "value-oriented assortment and treasure hunt experience," as well as its store growth, omnichannel and self-checkout capabilities, expansion into new areas such as gaming and digital, and the rollout of Five Beyond. They are "encouraged by the strong business momentum at Five Below and its ability to execute at a high level."
Financial Performance
Despite the pandemic's impact, Five Below posted a strong fourth quarter in 2021, with a top-line sales increase of nearly 25% year over year and a record comparable sales increase of 13.8%. However, the full year saw a 5.5% decrease in comp sales and an operating income decrease of nearly 29%.
In conclusion, the Five Beyond concept is a significant step for Five Below as it seeks to evolve its retail model while maintaining its value-driven appeal. The concept offers flexibility, allowing the retailer to cater to diverse customer needs and preferences, and to expand into new product categories and markets.
- In an effort to cater to diverse customer needs and preferences, Five Below aims to expand the Five Beyond concept to 30% of its fleet by the end of 2021.
- By offering a more extensive product range, Five Beyond seeks to improve the overall shopping experience for customers seeking a wider selection of items, such as clothing and personal care items.
- Analysts have praised Five Below's flexibility, including its store growth, omnichannel and self-checkout capabilities, expansion into new areas such as gaming and digital, and the rollout of Five Beyond.
- Despite the pandemic's impact, Five Below posted a strong financial performance, with a top-line sales increase of nearly 25% year over year in its fourth quarter of 2021.
