Five Below, along with Comcast, SeventySix Capital, Elevate Capital and angel investor George Miller, invested $12 million in Nerd Street Gamers, an esports infrastructure company. Five Below led the Series A funding round, according to a press release emailed to Retail Dive.
As part of the deal, Five Below and Nerd Street Gamers will build 3,000-square foot Localhost spaces connected to an undisclosed number of Five Below stores and will host live, in-person events played using professional-level equipment. The test will begin with a multi-store pilot in 2020 and, if successful, could scale to 70 or more locations over the next few years, per the press release.
In addition to piloting Localhost spaces in Five Below stores, Nerd Street Gamers also plans to build 50 regional and college-based facilities. Esports in general have become a trend that brands and retailers are paying more attention to.
Five Below's funding of Nerd Street Gamers isn't the only investment that the retailer has made recently. The retailer has also worked with BRP on revamping its in-store tech capabilities earlier this year.
Five Below is performing well and in the second quarter, CEO and President Joel Anderson said the company could open as many as 150 new stores this year.
According to a statement, John Fazio, founder and CEO of Nerd Street Gamers, said the partnership with Five Below allows the gaming company to make professional-level gaming equipment more accessible, with the option of opening venues "in every major city in the country." For Five Below, the move appears to be about attracting more young customers.
"The partnership with gaming expert Nerd Street Gamers is a unique opportunity to engage with an important and growing community of gamers in many of our locations across the country," Anderson said. "Gaming is a trend our younger customers are actively enjoying, and working with Nerd Street Gamers will help us to provide an exciting gaming experience that appeals to our core customers and beyond, while also showcasing our extreme value technology-related products and accessories."
As Five Below grows its brick-and-mortar presence, its competitors are undergoing substantial changes, too. While Dollar General announced plans to open hundreds of new stores, Family Dollar said it expected to close nearly 400 stores.