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Nov. 6--Some people think a store named Five Below must carry cold-weather gear for bitter winter nights. It doesn't, although the $5 Pashmire wraps are very popular among the tween and teen customers.

Five Below refers to the prices -- everything inside is supposed to be priced at $5 or below, the better to attract young customers who may rely on allowances or lawn mowing and baby-sitting jobs to help finance their purchases of trendy gear.

The Philadelphia-based retail chain arrives in Western Pennsylvania through locations scheduled to open today at the Waterworks Mall, in the city near Aspinwall, as well as in shopping centers in Cranberry, Butler and Altoona.

One of the new stores will put the 7-year-old company over the 100-store mark, another milestone for the co-founders who met through Zany Brainy, an educational toy store chain that was sold to the owners of the toy seller FAO and then later shut down.

In 2002, David Schlessinger and Tom Vellios founded Five Below with the idea of creating a modern version of the old five-and-dime stores for youths. The concept combined the power of dollar stores, which at that point were popping up everywhere, with the experience the two men had in marketing to young shoppers.

Unlike many dollar stores, the Five Below team wanted a carefully planned assortment heavy on brand names and the latest fads. That strategy was reinforced by results from the first stores that the company opened, said Mr. Vellios, CEO. "What we learned was you had to stay close to the trends that kids wanted."

Lava lamps were hot sellers in the early days. Now iPod accessories and merchandise related to video games are a big deal.

Employees setting up the new Waterworks store earlier this week had filled a wall section with headphones, iPod covers, iPhone cases, Wii game accessories such as racing wheels, baseball bats and tennis rackets, while a nearby shelving unit displayed Game Boy Advance games featuring Bratz and Spiderman.

Shoppers won't be able to buy actual iPods or iPhones or Nintendo Wiis. Even good bargaining won't bring those down to $5.

Elsewhere there were pink, green, blue and lavender yoga mats, Steelers and Penn State holiday stockings, a place for Adidas knit caps, another for graphic T-shirts and pajama pants, as well as a free-standing display packed with Energizer batteries to keep electronic gadgets going. A few Coke cases and a snack aisle heavy on candy probably keeps the youngsters chugging along.

Among the brand names that the chain boasts of carrying are Wilson, Lego, Kooky, Spaulding, Crayola and Puma.

The founders' previous experience in retail shows in the new store's use of stylized signs marking out merchandise sections such as Sports, Media, Room, Crafts, Storage and Style. Wheelbarrows hold seasonal merchandise. One wall sign boasts "As close to free as it can be."

Mr. Vellios said the expanding store base -- within two years, he expects the East Coast chain could double in size -- has helped boost purchasing power. In addition, Five Below does things such as buy basketballs and footballs uninflated to save on shipping. "We go out of our way to take all costs out of the system," he said.

The stores, which range between 7,000 and 10,000 square feet, carry about 3,000 items, Mr. Vellios said. New merchandise is brought in regularly, a technique that gives Five Below's young shoppers fresh goods to check out each time they come in and trains them to stop by frequently. The core customer base is probably between 9 and 15 years old, he said.

A few Five Below stores are in malls but, like Cranberry discount teen clothing retailer rue21, the company tends to look more for strip shopping centers with lower rents but in the right neighborhoods. In the Pittsburgh region, officials have said they could open 10 to 15 more stores.

A report in The Deal, a mergers and acquisitions publication, last year said the company expected 2009 revenue to exceed $100 million, although Mr. Vellios declined to release financial data for the private company. The Deal report on new private equity investment in Five Below said an initial public offering might be in the plans at some point.

For now, the focus is on expanding and staying on top of trends. Company officials said they had proven the concept can do well in a growing economy as well as during recessionary times.

Previous retailers who put price points in their store names have eventually run into issues, of course. The five-and-dime stores ran out of room when inflation drove prices up. Dollar stores had issues in recent years as high gas prices sent some prices above that mark.

So far the $5 limit has worked fine for Five Below.

"To this point, we have had no issue whatever," said Mr. Vellios. "It has been a terrific level for us."

Teresa Lindeman can be reached at tlindeman@post-gazette.com or 412-263-2018.

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Credit: Pittsburgh Post-Gazette