Is Five Below worth $1 billion?
IPO in the works, says Reuters
Is Five Below worth $1 billion?
Joseph N. DiStefano
Writes Reuters here: Philadelphia-based discount chain store operator Five Below "is in talks with bankers about an initial public offering, according to two sources familiar with the situation." Five Below, a chain of more than 100 mostly mid-Atlantic area stores, is run by former Zany Brainy owners Tom Vellios and David Schlessinger. Investors include LLR Partners, based at Cira Center, backed by Ira Lubert and Pennsylvania state pension funds; along with Boston's Advent International.
"Five Below generates earnings before interest, taxes, depreciation and amortization of $45 million to $50 million," and is growing quickly, Reuters said, citing an unnamed source familiar with the company's efforts to hire investment banks. "Five Below would likely be compared against other discount stores when it markets its IPO, said the source. These companies, like Dollar General and Dollar Tree, are both trading at over 20 times forward earnings. If valued against this multiple, Five Below could command a market valuation of over $1 billion." Five Below didn't return Reuters' calls; LLR and Advent "declined comment." No doubt someone has plans for Five Below. Though with an unnamed-source plant like this it's tough to know if there really is an IPO in the works, or someone's trying to tease a price for a private stock sale.
I got google for 36 at 1000 min. Let's see if we can do some damage here.— Flyers2001
Golly Gee. Don't do it. Don't waste your money. David Schlessinger did the same thing with Zany Brainy in the 90's. That buisness was a BS house of cards. They were all flash and no substance. They had a bunch of little girls who didn't know anything running the show. That business went bankrupt twice in a couple of years once the bankers became wise to what was going on in the warehouse. Going on past performance, I would surely question what happens next for this glorified dollar store. Like Zany Brainy, it isn't the kind of place that you want to go to all of the time. You get tired of going there. Unlike some of the successful dollar stores where you have repeat business, Five below is like a cheap toy store that your kids grow out of. I'd bet that David leaves and the philosophy leaves with him and the inheritors run the place into the ground just like Zany Brainy.
