Five Below Reopens Stores, Adds Curbside Pickup Amid Coronavirus
Five Below, Inc. FIVE recently announced that it has begun the process of reopening stores and looks to open most by early June. Around 17 outlets across Arkansas, Iowa and Nebraska were opened last week, with another 100-plus stores opened in five other states this week.
In addition, management has announced financial actions to sail through the tough times. These actions include prioritization of capital projects, pay cuts and new store opening targets. The company continues to progress on its new web platform and expand related digital capabilities, with a goal to open a West distribution center in 2021. Meanwhile, it decided to defer the opening of a Midwest distribution center till 2022. For fiscal 2020, the company sets a goal of accomplishing 100-120 new store openings compared with the initial target of 180.
It also intends to put in place a temporary pay cut for all corporate associates, and some field and supply chain leadership, effective May 3. Previously, it had announced a temporary reduction of 50% in the base salary of the company’s CEO and a temporary 25% base salary reduction for the rest of the executive leadership team. The company’s board of directors also decided to forgo cash retainers for first-quarter fiscal 2020. Further, annual pay increment for corporate associates was delayed. It has also furloughed associates and cut non-payroll costs significantly, including advertising, occupancy, other store operating expenses, distribution and corporate office operating expenses, and professional and consulting fees. It has also been managing inventory levels.
Furthermore, the company has entered into a new $225 million asset-based revolving credit facility with Wells Fargo, strengthening its financial status. This three-year facility replaces the prior $50-million credit facility with Wells Fargo.
Curbside Pickup Gaining Traction
In the latest release, Five Below rolled out a new service, curbside pickup, and looks to expand the capability across hundreds of its outlets this week. Currently, this service is being offered in roughly 40 stores across Florida, Tennessee, California and Texas. Moreover, it has been focusing on strengthening its digital capabilities.
Amid the coronavirus crisis, retailers are on their toes to serve the community through enhanced operational tools, with curbside pickup being the most popular one. Curbside pickup is an effective way to cater to customers’ demand while minimizing person-to-person interaction. Renowned retailers like Best Buy BBY, Sprouts Farmers SFM and GameStop GME have also been enhancing their curbside pickup capabilities.
