How CEO Winnie Park is reshaping Five Below into 'Costco for kids'

• Five Below CEO Winnie Park has been in her current role for one year.
• Once a relatively little-known retail executive, she has led a major turnaround for the discount retailer.
• Analysts trace her impact to a laser focus on retail fundamentals and sharp merchandising.

Christmas, it is often said, is a time for second chances.

So it would seem for Five Below, which is celebrating a transformational year under the leadership of CEO Winnie Park.

The stock is up about 85% this year so far — that's well more than the returns of most major retail stocks and AI chip darling Nvidia in the same period.

To rewind, last year's holiday season wasn't looking like a very joyful one for the tween- and teen-focused retailer.

The Philadelphia-based company was on its way to posting its fourth-straight quarter with negative or flat comparable sales, and that was coming off several prior years of underwhelming performance.

While Five Below was managing to grow overall sales through the addition of new stores, existing stores weren't resonating with shoppers. It was also dealing with industry-wide challenges, including shoplifting and the rise of low-priced e-commerce players like Shein and Temu.

With Five Below's stock languishing around a third of its 2023 peak, the company tapped Park, then-CEO of Forever 21, to take over as CEO in December 2024 during the holiday rush last year.

Betting on Park's 'complete package' of retail experience

"When she came in, she was sort of an unknown quantity," Mizuho retail analyst David Bellinger told Business Insider. "It was a question of how is she going to fix this business immediately."

While Park may not have been the most widely known CEO on Wall Street, she did come equipped with decades of industry experience, including as CEO of Forever 21 and Paper Source, as well as executive roles at Duty Free Shoppers and Levi's, and a stint with McKinsey's retail team.

"Her background allows her to really understand how all of these different aspects of the Five Below business work, because she's drawing on a very rich career," Global Data retail analyst Neil Saunders told Business Insider.

"A lot of people come in sometimes as CEOs, and they don't have a tremendous background in retail, or they may have experience in merchandising, but not in supply chains," he added. "Winnie Park was almost like the complete package."

Five Below did not respond to a request for comment on this story.

Getting the business back to retail fundamentals

Park wasted no time diving in with cofounder and executive chairman Tom Vellios and chief operating officer Ken Bull.

The first order of business was refocusing the merchandise on what Five Below's core teen and tween customers want.

Bellinger said this was a result of Park's major reset with the sourcing teams, guiding them to find hot items and buy with confidence, while steering away from items, like luggage, that were more adult-focused.

"They loaded the store up with 'Lilo and Stitch' merchandise, SpongeBob, Hello Kitty — so when you do have these good, well-known brands, it sort of lifts the whole store," he said.

The merchandising effort was also paired with a social media push that the company says has helped attract new shoppers.

Park's other major area of focus was simplifying store operations for both employees and customers.

With a bit of planning and an incremental investment in labor hours, Five Below says it has improved in-stock rates and customer support at its stores, helping to drive higher sales.

"Winnie Park is the type of leader that has a very clear vision for the business," Saunders said. "She doesn't really overcomplicate things."

Letting some things go can help the business move ahead

In addition to getting Five Below back to some principles it may have lost touch with in recent years, Park is also showing a willingness to let go of at least one thing that may have been holding the company back: its $5 price point.

The last few years of inflation haven't made it easy for retailers with dollar-denominated branding to stick to their original promises. Dollar Tree had to hike its base price to $1.25, and it's tough to run a 99 Cents Only store at a time when the US government is eliminating the penny. President Donald Trump's trade war this year hasn't been much help for import-heavy businesses, either.

To manage these cost pressures, the company lumped more merchandise in a catch-all section of the store called Five Beyond, which it had set up years earlier.

But that distinction brought unnecessary complexity without meaningful benefit, and the company recently ditched the plan in favor of grouping products by category instead of a price threshold.

"It was a very disjointed merchandising set," Bellinger said. "Anything in that price threshold was in the back there."

Now, he said, "the way they've assorted the store and spread these items out makes a lot more sense."

Looking beyond price to focus on value

Bellinger said the move shows that Park understands a critical lesson that successful retailers have had to reckon with in the last few years: value and price are not the same thing.

"You could find value in that $30 item. It's all relative," he said.

Taken together — exciting products, well-run stores, a focus on great value — Five Below is starting to look in some ways more like a warehouse club than a discount store.

"Five Below is essentially the Costco for kids," Bellinger said. "Maybe you want to get some core birthday or party items, and then you wind up expanding your basket and buying all these things you didn't know were there. And then it leads you to your next visit, and you just keep coming back."

The success of the past year will raise the expectations for next year's quarterly comparable sales numbers, but Five Below still has several levers it says it can pull to meet the moment.

Bellinger said investors are keen to see whether the recent changes at Five Below have led to a structural shift that will drive long-term performance.

The average Five Below store generates annual sales of around $2.1 million, but Bellinger said Park's initiatives could significantly boost that number: "Why can't that be a $3 million store now, or even higher?"