ORLANDO, Fla. — About a year after former Forever 21 CEO Winnie Park took the top spot at Five Below, the executive has her team in place and a strategy to drive growth at the discount banner.
Amid many changes at the retailer — including a new chief marketing officer, chief merchandising officer and chief financial officer, among other appointments — Park is going back to basics in some departments. One of her first steps was to broaden the retailer’s target demographic to include younger children and not just preteens and teens. That means the retailer is appealing to primarily Gen Alpha and Gen Z.
“I think that our true North Star is that focus on the customer, and reclaiming that position as a destination for the kid and the kid in all of us,” Park said. “It's a special place in retail — there's not a lot of us out there that are focused on the kid. And really doubling down on that in every way: getting close to the customer, their needs, getting close to their trends, which are actually multifaceted.”
Including kids means that Five Below has more room to grow with its audience, from when they’re still receiving allowance to when they’re going to college.
“There's a ton of opportunity in terms of customer lifetime value,” Park said.
Five Below is taking a more active approach on social media under Park as well, since many children are on social platforms from a young age, and is taking a more trends-based approach to some of its merchandising decisions. The retailer swiftly scaled up a lounge offering this year and Park says there is a lot more to be done on product assortment, especially with the retailer’s Five Beyond tier of higher-priced items.
“I come from years in the fashion industry. We take go-to-market very seriously,” Park said. The retailer takes care to discuss what’s trending and how Five Below wants to present it to shoppers before major moments, and shares this information with stores, she said.
“Before we deliver the product, we have a curtain call with all of our associates so they really get a feel for what's coming their way,” Park said. “When a customer gets there: curtain up, you're walking into holiday, you’re walking into Halloween — and it's compelling. Retail is the last great team sport outside of football.”
Part of Park’s new strategy for merchandising at Five Below included dissolving the separate area of the store dedicated to $5-and-up products and integrating items throughout the store’s aisles. As a result, more of those pricier products sold and Five Below got more space back in stores. Still, the retailer isn’t abandoning its discount brand image entirely.
“I think the litmus test for us is, how good is the product and relative value?” Park said of some of Five Below’s more expensive items. For example, if a $35 animatronic skeleton compares to a $70 product at another retailer, that’s worth it. “If it works great, if it's scary enough — that's good value. So that's our constant litmus test. And at Five Below, we are bred in the bone to not go above five — like literally, it is almost like tissue rejection. So it better be really damn good.”
The retailer did increase prices in some areas, a result of tariffs, but Park said the retailer was “incredibly strategic” about where it did so. The executive spent weeks with team members going item by item to understand the role every product played in the assortment and where it made sense to raise prices.
Park also simplified the retailer’s pricing structure.
“When I was interviewing, there were something like 77 different price points. There were $0.25 endings, $0.55 endings — we got rid of all of that,” she said. “We went to whole dollars.”
While Park’s tenure is still just getting started, Five Below is showing encouraging results. The discount retailer reported Monday that sales for the holiday period grew more than 23% to $1.47 billion. Comps surged 14.5% in the period ended Jan. 4. The retailer also raised its fourth quarter and full-year outlook as a result of the performance.
“We've got a lot of dry powder in the arsenal that we started to look at this year,” Park said, “but we're ready to really bring it to the fore over the next few years.”
