Five Below (NASDAQ: FIVE) has been one of the rare success stories in the current retail market.

The low-price chain has steadily grown, adding 85 stores in 2016 after opening 71 net new locations in 2015. It's a slow steady march that has brought the discounter into new markets, and in 2017, it's entering California.

On April 21, Five Below will open nine stores in and around Los Angeles -- the company's first in the Golden State -- expanding its footprint to approximately 550 stores in 32 states, according to a press release.

"Our growth westward has been careful and strategic, and well worth the wait as we believe Five Below will have a tremendous reception and reaction in Southern California," said CEO Joel Anderson.  "We're not just dipping our toe in the Pacific with these openings, we're diving in with nine stores and several more to follow within a matter of months. We expect California to be our largest state for stores in the coming years."

What is Five Below?

Call it a trendier take on a dollar store: Five Below has what it describes as "an edited assortment of 'must-have' merchandise within a high energy, dynamic store environment where everything is priced $5 and below."  The chain targets teens and tweens, offers a rapidly changing selection of merchandise organized into eight sections: Style, Room, Sports, Tech, Crafts, Party, Candy and Now.

A big success

Discount chains in general have been resilient in the face of declining traffic to retail stores. Five Below reported its fiscal 2016 results on March 22, and said its net sales climbed 20.2% to just over $1 billion. In addition, comparable-store sales rose 2%, and diluted income per common share rose 23.8% to $1.30, up from $1.05 in 2015

Five Below should be able to expand its model to new markets and capitalize on the struggles of other retailers. Given how many other chains are closing stores or going out of business altogether, it likely will have little trouble finding locations, and will have more leverage in negotiating leases.

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Daniel Kline has no position in any stocks mentioned.

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