By  on November 16, 2007

RARITAN, N.J. — The opening of a Five Below store here shows the challenges beauty faces as teens and tweens flock to other categories.

The store, the newest look for the 66-unit chain, has a tighter assortment of beauty than older designs. Co-founder Tom Vellios said that change was by design to make room for the hot items teens want, including iPod accessories, T-shirts and home decor.

Five Below isn't alone in its move to trim beauty. Many other chains have also had to clear more space for more profitable categories, such as mini health clinics and skin care.

Vellios, however, said beauty sales are still strong at a double-digit gain and that he hopes to get aggressive in the category next year with a stepped-up effort. "We're going to go after it next year," he added.

Five Below opened 15 new stores this year with plans for another 15 next year.

Even in its tinier space, Five Below makes a statement with beauty. The stores are aimed at tweens and teens who find items such as bath gel and lip gloss a must-have. Beauty items at this new location in central New Jersey are near the front of the store, but confined mostly to one major fixture. In the original stores, beauty commanded about twice as much space.

Among the beauty highlights are LA Colors eye and nail items, Funky Fingers neon nail polish, a gift bag of 25 lip glosses, a one-foot peg section of candy-themed lip products from Lotta Luv, Disney Princess sets from Townley and Hello Kitty bath sets. There was also a make-your-own lip gloss kit being snapped up by shoppers getting a head start on the holiday season. The opening flyer promoted Gingerbread and Snowy Day gift sets at $5 each. Vellios said hot colors such as Funky Fingers have been flying out of the store. "We helped put Funky Fingers on the map," he added. He said Five Below looks for opportunistic deals and also goes right to manufacturers for products that can be planogrammed.

Beauty products are also included in an easy-to-shop travel department with trial sizes perfect for air travel. Products getting more real estate at Five Below reflect current youth shopping desires, including ballet flat shoes, iPod accessories, games, home decor, candy, DVDs and gag items. The store was bustling on a recent afternoon visit with shoppers filling up on toys, games, candy, beauty and licensed products such as Hannah Montana hair accessories.One of the advantages Five Below has is that it can react quickly to trends in the market and up the footage as needed. The management team is quick to point out Five Below is not a typical dollar-type store, rather a value spot for trend merchandise. Five Below has a cadre of buyers prowling trade shows, such as Efficient Collaborative Retail Marketing, in search of new items.

Two other New Jersey locations opened the same day as this site in Raritan. In less than five years, Five Below has grown from its first shop in the suburban Philadelphia market to locations in Pennsylvania, New Jersey, Delaware, Maryland and Virginia. Management targets strip shopping centers in heavily traveled areas and most stores average about 4,000 square feet. Rather than invest heavily in advertising, Five Below attempts to attract shoppers via word of mouth. By yearend Vellios said there will be 67 units up and running.

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