Manhattan’s Fifth Avenue is known as the address of luxury retailers Bergdorf Goodman, Harry Winston, and Tiffany & Co. Now value retailer Five Below Inc. is setting up shop.
As part of its 2018 store expansion efforts, the retailer known for its $5 deals is planning to open its first Manhattan storefront, two blocks north of Bryant Park. The two-level location will measure close to 11,000 square feet, compared to its average 8,000-square-foot shops, and is expected to outperform the about $2 million in annual revenue at a typical store.
“We generally don’t open stores that large,” spokeswoman Christiane Pelz said.
Once the store opens in November, the Philadelphia-based seller of everything from toys and apparel to electronics and makeup will have a presence in all five New York City boroughs. The location is banking on Midtown’s heavy foot traffic and international tourists to draw in the crowds.
“We typically look for areas with vibrant traffic, so that is one of the most desirable traffic areas in probably the world,” Pelz said.
The location between 44th and 45th Streets is just blocks from the former Toys “R” Us flagship, which closed after Christmas 2015. The rest of the toy chain’s locations have since shut their doors, creating opportunities for other toy sellers — including Five Below — to try to capture some of that business.
CNBC reported on the new Manhattan location earlier.
Retail rents in Manhattan are plummeting as landlords contend with a record number of empty storefronts. On Fifth Avenue, the most expensive stretch of retail space in the city, average rents fell 18.2 percent during the second quarter of 2018 compared with the previous year, according to brokerage Cushman & Wakefield.
Five Below is also growing elsewhere. Last quarter, the company said it opened 33 new stores across 18 states, putting it in line for the 125 total it plans to open in 2018. Five Below expects to end the year with about 750 stores, chief executive officer Joel Anderson said on last quarter’s earnings call.
With many items for sale on the company’s website listing China as the country of origin, Five Below is watching to see whether the Trump administration’s newly proposed tariffs on $200 billion worth of Chinese goods will impact it. The list of products subject to duties has been expanded to target consumer categories such as sporting goods, some apparel items, and furniture — though the list could still be amended through public consultations that end Aug. 30.
“We are in the middle of analyzing it, so it’s too early for us to comment at this point,” Pelz said.