Premium digs for discount retailer

The new two-story Five Below store on 1529 Chestnut St. marks a milestone for the fastest-growing discount teen retailer in the nation.

Its arrival on Chestnut Street - in the old Arcadia Theatre - also continues the corridor's hot streak as a magnet for national retailers, a drastic change from just two years ago.

"This is our baby, for sure," said Five Below CEO Joel Anderson, as he took a sweeping glance of the store known for its shock of colors; for a variety of candy, toys, and iPhone accessories; and for pricing it all at $5 or less. "We began planning this one year ago."

The flagship store opened just after 9 a.m. Thursday with Mayor Nutter in attendance with other city and state officials.

"Five Below is a great addition to Center City Philadelphia," Nutter said.

This 13,000-square-foot location is double the size of the average Five Below store. It's the only one with two stories - including an exposed brick wall - and a special Philly section with caps, shirts and books.

"We are so proud to be part of the resurgence of Chestnut Street," Anderson said earlier this week. "It's incredible what's happening here, and we are right in the heart of it."

The Philadelphia retailer based at 1818 Market St. has been growing substantially the last few years, by tapping the wallets of 60 million Americans age 5 to 19. Sales last year totaled $680 million, up 27 percent from 2013. Net income was $48 million, up 49 percent from $31.68 million in 2013.

The first store opened at 1616 Walnut St. in 2002.

Anderson said there are plans to open 70 more stores by the end of this year, bringing the total to 436. Eighty-five more stores are slated to open in 2016.

Deutsche Bank AG recently released an investors' note keeping a "buy" on Five Below's stock.

"We stay the course and highlight what remains a unique retail growth story with 25 to 30 percent annual earnings growth potential going forward," according to the Sept. 2 note.

Five Below is the latest national chain to open on Chestnut Street west of 15th Street within the last 18 months. The others include Nordstrom Rack, Uniqlo and Forever 21.

"Absolutely, there is a lot of tremendous positive momentum on Chestnut the last few years," said Jacob Cooper, managing director of MSC Retail, a retail advisory services firm in Center City. "There are several reasons.

"One is the expansion of the Rittenhouse [Square] retail trade from what it was 10 years ago," Cooper said. It had been only Walnut Street, from 15th to 18th Streets, as the "prime target for retailers. That's changed."

He said this stretch of Chestnut Street also allows for larger retailers.

"National retailers that need 10,000 to 30,000 square feet of space can find it on Chestnut much more frequently than Walnut, which was mostly residential," Cooper said.

Meanwhile, on Thursday afternoon after school, there was a party atmosphere at the store to celebrate its opening. Outside, a hot dog vendor was busy and balloons were tied around the store entrance.

Inside, a long line formed at a soda fountain selling more than 120 flavors.

Quenie Yong, 40, a Center City resident, was buying her son Evan Theng two boxes of Marvel action figures for his 6th birthday on Thursday.

"I like it. It's nice," Yong said of the store, after buying a $5 extension cord for herself with a $3 grand-opening coupon. "It's very big and has a lot of stuff."