Zany Brainy founder woos tweens, teens

PHILADELPHIA -- Although 10-year-olds might not know it yet, what they really need is "a store they can call their own."

That's entrepreneur David Schlessinger's marketing idea for Five Below, the new emporium he opened in Chester County, Pa., that carries thousands of items for $5 or less, designed for 8- to 15-year-olds with their own spending money.

It's not a toy store or a dollar store. Here's a partial list of what customers will find: makeup, tattoos, watches, pens, games, mood rings, toe socks, hair gel, soccer balls, scooters, skateboards, magnets, body lotion, hair accessories and the ever-popular disappearing ink and sneezing powder.

Assembling this merchandise in a store with colorful murals and hip music is the newest retailing concept from the fertile mind of Schlessinger, who started Encore Books in the '70s, while he was an 18-year-old student at the University of Pennsylvania, and Zany Brainy toy stores in the '90s.

Five Below anticipates tapping a market that's big, growing and affluent. According to retailing analysts and surveys of teen-agers and their parents, young people ages 12 to 19 spend an average of $84 a week, including $57 of their own money from allowances, gifts and part-time or summer jobs. Even children under 12 have disposable income that averages $10.50 a week from allowances and gifts, the research shows.

During a preview of the store last week, Schlessinger and partner Tom Vellios, a former chief executive at Zany Brainy, smiled wryly each time they came to another bin full of hats, trick cameras, posters, wall signs, videotapes or cell-phone accessories. They picked up items to show them off -- like teen-agers might do with their buddies.

They talked steadily about what they see as the niche Five Below will fill: stores with trendy merchandise for teens and preteens -- or tweens as they're known to marketers these days -- and all of it priced low enough that the young customers can use their own money.

"No one has brought value to the teen category at this price," Schlessinger said. "It allows them to almost go on a treasure hunt. ... We've done a lot of research with kids and their parents. Kids say: 'You're the everything store."'

Schlessinger and Vellios said the idea for Five Below came from watching their own children and listening to them. Schlessinger has sons who are 7 and 11, and Vellios has two boys, 9 and 11.

By the time youngsters are 11 or 12, they lose interest in most toy-store merchandise, Schlessinger said. Most of them gravitate toward electronic games, sports and music, while girls begin buying personal-care products.

"My 11-year-old doesn't want to go to toy stores anymore," Schlessinger said. "Kids are growing older younger."

Vellios added that girls especially are conscious of fashionable apparel and makeup at a young age, and teens and tweens both have a strong need to decorate their own bedrooms, which creates a market for posters, wall art and other possessions.

"There was a great opportunity to bring real value because the (high) pricing of mall stores on teen products is shocking," Vellios said.

A Malvern, Pa., mother and her three children, friends of Schlessinger's family who were given a preview of the store last week, echoed the owners' understanding of potential customers. Donna Murdock said William, 12, and twins Jenna and Allison, 9, were "growing out of Toys R Us." But a trip to an electronics games store can set her back $60, and buying something for each child in many stores can cost $100, she said.

The two entrepreneurs said that one key to keeping Five Below's prices below $5 is buying large quantities directly from manufacturers, many of whom they know from their days running Zany Brainy. The vast majority of the products they will sell are made overseas, mainly in China and Taiwan.