As many retailers struggle during the pandemic and against online competition, Five Below Inc. has defied both challenges and has seen sales rise, new stores open and its share price climb back up to pre-pandemic levels.

The Philadelphia-based discount retailer opened a record 63 new stores in the second quarter and by the end of the year expects to have a total of 1,020 stores in its portfolio. That’s up from 900 it had at the beginning of the year.

The company is also spending heavily to remodel some of its older stores to reflect changes brought on by the pandemic, what its target consumer — tweens and teens — wants these days and areas where it sees growth. Think gaming, nesting and “snarky” T-shirts.

The company most recently completed a two-week renovation to its 13,000-square-foot store at 1529 Chestnut St. in Center City, which is its among its largest. The company opened the location in September 2015 and will hold a toned down grand re-opening of the store this Friday.

While the cost of fitting out a new store is about $300,000, company officials declined to divulge how much a remodeling job costs.

In a recent CNBC interview, CEO Joel Anderson said that the retailer “is about being a little snarky, catering to kids and having a great time when you come to store.”

The renovated Chestnut Street store reflects all of that. The store has new graphics that capture its home of Philadelphia, brighter lighting as well as new displays and check out registers that are six-feet apart. A constant drone of up beat music adds to the shopping experience.

The renovated store has expanded several departments that are selling well these says such as T-shirts and beauty. “Casual wear has been great for us and tough for others,” said George Hill, executive vice president of retail operations for the company.

Mainstays such as books, basketballs and other toys remain. It has bulked up on items that cater to school and work from home, such as risers for desks and stay-at-home items such as blankets, room décor, puzzles, games and crafts. There are also other pandemic-related products such as masks and hand sanitizer. Pet items, such as wipes, beds and shampoos, also take up more shelf space than before in a reflection of more people owning pets during the coronavirus outbreak.

While it always had an expansive candy selection, Five Below (NASDAQ: FIVE) is delving deeper into providing a larger line of grocery-related products including snacks items such as cheese balls and pistachios along with grab-and-go food such as ramen and cereals.

While its founding strategy was to sell items for $5 or less, it has expanded that into what it calls “Five Beyond,” which are items sold for $10 or less. It tested the concept out in 25 stores over the last couple of years. Customers suggested that they preferred they didn’t mind paying more than $5 for an item but wanted those products in a separate, designated section.

At the Chestnut Street store, Five Beyond products are on the second floor and part of the company’s expansion into gaming products that also compliment the company’s foray into esports and its partnership with Nerd Street Gamers. Last week, Nerd Street Gamers opened the first of its Localhost locations in Five Below stores in Philadelphia and Texas, with plans for a third near St. Louis.

Localhosts are an esports venue where people can train, compete in tournaments or play video games casually. The Philadelphia location is inside a Five Below store in the Bakers Centre shopping center in East Falls.

Five Below is also launching an exclusive line of what is calling Bugha products that is part of its partnership with Kyle “Bugha” Giersdorf, winner of the Fortnite World Cup. Those products will be available online this week and eventually put in stores nationwide.

The remodels, new stores and products have bolstered its bottomline in spite of the pandemic. When the company reported fiscal second quarter results last month, it saw sales increase by 2.1% to $426.1 million from $417.4 million in the same period a year ago. However, comparable stores sales — locations opened at least a year — decreased by 12.2% as a result of all of its stores closing as part of the pandemic-related shutdown over the spring. Though its shoppers aren’t frequenting its stores as often as they used to, they are buying more items on each trip.

Income rose to 53 cents a share, up from 51 cents in the second quarter of fiscal 2019. The company’s stock closed on Oct. 20 at $134.90 a share. In mid-March, it had been at around $52 a share, having started the year at $127.65.

All of which appears to be an anomaly in these times when retailers are either filing for bankruptcy or shuttering stores.

“This time we’re in right now, parents and families are all living in a different situation and they are looking for a place to save money, have a great experience and be in a safe environment and I think we’re doing all three for them,” Anderson said on CNBC.

*Articles Courtesy of Philadelphia Business Journals

For more information about Philadelphia retail space for sale or lease in Philadelphia or about any other Philadelphia properties for sale or lease, please contact WCRE at 215-799-6900.

Wolf Commercial Real Estate, a full-service CORFAC International brokerage and advisory firm, is a premier  Philadelphia commercial real estate broker that provides a full range of Philadelphia commercial real estate listings and services, property management services, and marketing commercial offices, medical properties, industrial properties, land properties, retail buildings and other Philadelphia commercial properties for buyers, tenants, investors and sellers.

Please visit our websites for a full listing of Philadelphia commercial properties for lease or sale through our Philadelphia commercial real estate brokerage firm.

A flurry of activity was underway this week in preparation for the opening of a new Acme at 40th and Walnut streets in the University City neighborhood of Philadelphia.

Three years ago, Acme Markets signed a long-term lease with the University of Pennsylvania on 34,500 square feet that had once been occupied by Fresh Grocer, a brand operated by ShopRite, which is a division of Wakefern Food Corp.

Acme has spent several million dollars — the company declined to be more specific — to prepare the space at 4001 Walnut St. for shoppers amid a pandemic and changing consumer buying habits. The store reflects both of those situations as well as the neighborhood in which it is located. It officially opens Oct. 23.

The space that serves as the actual store is about 20,000 square feet, which is much smaller than a typical Acme that comes in at between 45,000 to 50,000 square feet. About 200 employees, most part-time, will work at the University City location.

The new location gives Acme an opportunity to pilot an expanded prepared foods and deli area that will include new items to the grocery chain including five varieties of poke bowls, sushi party platters, barbecue dishes such as brisket and pulled pork, focaccia pizza, and hoagies.

“We try to meet every single customer and really take care of the community,” said Angie Marshall, deli sales manager. In University City, that means providing items that appeal to students as well as families.

Because of the coronavirus, grocery stores such as Acme have eliminated self-serve buffet stations and are finding alternative ways to provide customers with prepared foods that are packaged or served by an employee. When it comes to salads, Acme is testing out what is being called “Sally the Robot.”

“It is a solution to the salad bar that no one wants to do because of Covid,” said Jim Perkins, Mid-Atlantic division president of Albertsons Cos., which owns Acme, and executive vice president of retail operations.

The devices contain 21 different items including romaine lettuce, spinach, quinoa red peppers and three different types of dressing that a person can select to make a salad.

Based on some of its research of what sold at the Fresh Grocer, Acme knew better than to put in a large display of ready-made cakes – though it will make them for customers. It also knew to bulk up on the deli, grab-and-go food items, snacks, produce and dairy but back off on meat and cooking ingredients. It added a floral department.

Acme bought a liquor license for the store and will sell beer and wine, though, as Perkins points out, that doesn’t compensate for softening sales of sodas and other sugary drinks as a result of the Philadelphia soda tax. A Starbucks kiosk will also operate from the new store.

Acme routinely looks for opportunities to open new stores, though it has also been closing locations throughout the region. If the company closes a store, then it wasn’t making money, Perkins said. “It’s all a financial equation,” he said.

The company has been renovating the stores it is retaining and will spend $20 million this year on remodeling locations. It so far has finished renovating 164 stories and, after this year, will have fewer than 50 to tackle.

One of those locations that will get an overhaul is at 5th and Pine streets in the Society Hill neighborhood of Philadelphia. It is the chain’s smallest location at about 7,000 square feet of store space. Acme will address that location next year with a total interior renovation that will require it to close for nine to 10 weeks. It will get a new layout as well as a liquor license that will enable it to sell beer and wine.

“That will be extremely fast,” Perkins said. “Closing it is the safest and easiest way to do it.”

While shelves were being stocked at the new University City location this week, there were signs that the pandemic is still affecting the availability of some products such as household cleaners and some frozen food items. Spaces where those products would otherwise go were empty, waiting until they become available again. “There are still about 500 items you can’t get,” Perkins said.

*Articles Courtesy of Philadelphia Business Journals

For more information about Philadelphia retail space for sale or lease in Philadelphia or about any other Philadelphia properties for sale or lease, please contact WCRE at 215-799-6900.

Wolf Commercial Real Estate, a full-service CORFAC International brokerage and advisory firm, is a premier  Philadelphia commercial real estate broker that provides a full range of Philadelphia commercial real estate listings and services, property management services, and marketing commercial offices, medical properties, industrial properties, land properties, retail buildings and other Philadelphia commercial properties for buyers, tenants, investors and sellers.

Please visit our websites for a full listing of Philadelphia commercial properties for lease or sale through our Philadelphia commercial real estate brokerage firm.