Five Below has started reopening its stores, with more to come.
The extreme-value tween and teen retailer is also slowing its store expansion amid the COVID-19 pandemic. It has reduced its new store opening target for fiscal 2020 to 100 to 120 stores as compared to the original target of 180 stores.
Five Below said it opened 17 stores in Arkansas, Iowa, and Nebraska last week, with another 100 plus stores opened in five additional states this week. It expects many more to open in the first half of May, with a goal of having the majority of Five Below stores open to the public by early June.
Additionally, Five Below launched a new service offering curbside pick-up, starting with approximately 40 stores in Florida, Tennessee, California, and Texas, and plans to expand to hundreds of stores this week.
“As certain states and localities update their restrictions, we are beginning the process of reopening our stores and reconnecting with our customers,” said CEO Joel Anderson. “Given the uncertainty around consumer behavior and traffic, we will continue to be disciplined in our approach, maintaining our focus on expense reduction and diligent management of cash and liquidity.”
The retailer said it has implemented safety measures, in line with the recommendations of public health agencies, including requiring all of its store employees to wear face coverings, increasing cleaning procedures in stores and providing signage to remind our customers and employees of social distancing and good hygiene.
The company also announced that it has entered into a new three-year $225 million asset-based revolving credit facility with Wells Fargo, as administrative agent, and other lenders. This new credit facility replaces the company’s prior $50 million credit facility with Wells Fargo.
“This additional liquidity further reinforces our solid financial position, increases our flexibility as we navigate the current environment, and will ensure we emerge in a very strong financial position,” said Ken Bull, CFO, Five Below.
The retailer also announced the following additional actions taken to mitigate the financial impact of the COVID-19 pandemic.
• A temporary pay reduction for all salaried corporate associates and certain field and supply chain leadership, effective May 3, 2020. As was previously announced, Anderson agreed to a temporary base salary reduction of 50% and the remainder of the executive leadership team agreed to a temporary 25% base salary reduction effective April 12, 2020.
• Prioritization of capital projects including continuing our progress on our new web platform and expansion of related digital capabilities, maintaining the target for a West distribution center opening in 2021, while currently deferring the opening of a Midwest distribution center until 2022.
The measures are in addition to those previously announced which included: canceling orders and delaying receipts to manage inventory levels; reducing non-payroll expenses; furloughing the majority of store and distribution center workers; extending payment terms for all vendors; and suspending quarterly cash retainers for the board for the first quarter of 2020.