Value Retail Chain Gets $17M for Expansion

PHILADELPHIA-Locally-based retailer Five Below has closed on $17-million follow-on investment by private equity firm LLR Partners Inc., also based here. The “extreme value” chain, which aims primarily at a younger customer base, will use this financing to support its plans to grow to 200 locations over the next three years.

“By the end of this year, we’re going to open 17 to 18 stores,” David Schlessinger, co-founder and chairman of Five Below, tells GlobeSt.com. “Next year, we’re going to open 30 stores, and our goal is to open more than 100 over the next three years.” Currently the company has 80 stores in seven Northeastern and mid-Atlantic states.

The fact that Five Below is looking to expand at a time when several other retail chains have scaled back plans to open new units might seem like a function of the chain’s pricing model—all merchandise lists $5 or less. However, LLR partner Howard Ross tells GlobeSt.com, “I thought their strategy was timely when it started” in 2002. “It’s even more compelling in this kind of economic environment.”