Five Below, the Center City-based chain of 192 kid-oriented dollar stores in 16 East Coast and Midwestern states, says it has hired Goldman Sachs and other brokers to sell shares in a $150 million initial public stock offering. Read from Five Below's SEC filing here.
The chain, founded in 2003 by former Zany Brainy toystore operators David Schlessinger and Tom Vellios, say it has nearly doubled its store network since 2009, and more than doubled sales, to $297 milllion in the year ended Jan. 31, up from $125 million in fiscal 2009. Its 2011 profit was $16 million, the chain's third straight year in the black and the highest profit reported for the chain so far.
The growth spurt has been financed by $194 million from investors led by Advent International of Boston in late 2010. Advent's people, including ex-Caremark CVS Corp. boss Thomas M. Ryan, control four of the six outside seats on Five Below's board. A fifth goes to Howard Ross of LLR, the Ira Lubert-backed Philadelphia investment group, which counts Pennsylvania's state pension funds among its clients. The other outside director is Staples Inc. boss Ronald L. Sargent.
Early Zany Brainy shareholders included local Philly investors like the Cohn brothers (Sage Financial) and Josh Kopelman (ex of Half.com, now co-head of busy First Round Capital of West Conshohocken, New York, and Silicon Valley).
Schlessinger and Vellios stand to get rich from the deal: each control more than 1 million Zany Brainy share options. Even before the IPO they were highly-compensated: Schlessinger was paid $3.6 million in salary and bonus as "executive chairman" last year; Vellios collected $3.7 million as chief executive.