Welcome to Wowtown, the new corporate home of tween and teen retailer Five Below at 701 Market St.
Like the store, dubbed “the T.J. Maxx for kids” where everything sells for five bucks or less, there’s a dizzying array of colors, lots of space to be creative, and natural light streaming in from all corners separated by shatterproof glass.
“This, in the daytime, just pours light in here,” said Five Below CEO Joel Anderson of the newly acquired space that’s been fully gutted, repainted, and relit to become Wowtown.
Five Below will occupy three levels — the first, mezzanine, and sixth floors — of the old Lit Bros. building, including the 12,000-square-foot retail space on ground level for an initial 117,000 square feet commitment. It has rights to more than 200,000 square feet — or almost a third of the 700,000-square-foot building when Wowtown is fully built out. Five Below signed a 15-year lease with an option for another 15 years.
The new space is inspirational, Anderson said while leading a tour of the office.
“We need it for new products, marketing, the merchants, product development, a lot of creative thinkers,” he said. “Even the finance guys who are used to being chained to their desks are walking around and sharing ideas.”
The sixth floor is what Anderson refers to as base camp — a conference center for vendors, suppliers, or potential new hires coming in to interview. It’s lined with rows of meeting rooms that can be reserved.
Next week, a 7,000-square-foot mock-up store will debut strictly for merchants to experiment with different product setups for the real stores.
Samuel and Jacob Lit, the brothers who built the Lit Bros. Department store, might appreciate what third-party partners (all based in Philly) — D2 Architecture, Structure Tone, AgileCat, and Groundswell Design Group — have created in their former store.
“This is the passing of the baton,” Anderson said earlier this week. Five Below started in Philadelphia 15 years ago. “The Lit Bros. were the original discount department store. They really emerged competing against Strawbridge’s and Wanamaker’s, and here we are 125 years later, Five Below is providing value. We exist because of value and experience. Delivering product and newness for $5 or less. We’re mom’s ‘yes’ store.”
Maintaining the retail legacy is important to Five Below and why Anderson said they kept the exposed brick, maple plywood, open ceiling, and rivets of the original building.
Anderson showed off sketches on a wall in what used to be the old sixth-floor bowling alley showing images of angels on ice skates.
“You see this and you know you are part of something bigger,” Anderson said. “They were done like 60 to 70 years ago and we’re preserving them.”
This past week, 300 Five Below employees worked in their new offices for the first time.
The full branding is almost complete with the elevators, walls, and conference rooms all projecting Wowtown, described in Five Below’s mission statement as “at the intersection of Let Go and Have Fun.”
Happy employees are productive and creative employees. “It reduces turnover,” Anderson said. “It helps on retention. It attracts new people to come work here.”
It doesn’t hurt that Five Below is also in the red-hot off-price sector.
“Off-price continues to outperform most of the retail sector largely due to the value proposition they offer cash-strapped consumers,” said Ken Perkins, president of Retail Metrics Inc. “Despite being nine years into an economic recovery, the middle class is not growing while facing steeper health-care, education, and transportation costs. Off-pricers such as Five Below offer name-brand products at highly competitive prices. Five Below also flows new products in regularly that provide consumers an air of freshness, as well as provide a treasure-hunt environment that many consumers find appealing.”
Perkins said Five Below’s same-store sales performance has outperformed broader retail in 34 of the last 39 quarters.
The company continues to grow rapidly. It joined the $1 billion club in sales at the close of 2016. There are 625 total Five Below stores, with 125 new ones to open this year — the majority of which will be in Southern California, Texas, and Florida.
Anderson said 40 associates were added to the headquarters staff last year, with approximately 50 more joining this year. Five Below has 375 total employees in its home office and 10,000 nationally.
More than 40 percent of Wowtown employees in the corporate office live in the city.
A cluster of them were still at their desk past 5:30 p.m. on Monday, working on projects.
At the end of the tour, Anderson pointed to the slogans in a large conference room on the sixth floor. Among them were “Unleash your passion,” and “Work hard, have fun.”
But “Wow our customers” was written on the ceiling at the head of the room.
“The others are interchangeable, but that is No. 1,” Anderson said. “Everything we do is for our customer. That’s why it’s at the front of the room.”