Five Underneath, a 1,500-store chain that quickly expanded by selling affordable glasses, LED pieces, and many other brightly coloured Chinese-made items, has stopped its Chinese imports, citing the quick increase in tariffs that have more than doubled the cost of new products.
Given the tariff increase, we strategically paused orders from , China, as we examine all options,” according to a statement from Five Below .
Shipping company Moller-Maersk A/S ordered all shipping containers to ships since April 10 to be sent back to the company’s companies, according to Bloomberg LP .
sourcing goods from other sources
The stock fell on Friday due to the news, but it ended up up more than 5 % on Monday, closing at$ 63.56, down from over$ 200 in early 2024. Over the past year, the property has decreased as Five Below reported disappointing revenue, slow keep openings, and replaced top managers.
The company added in a statement that” we are utilizing several tools to help reduce taxes and quickly evaluating the best of some alternatives.”
In a filing past month , a submitting with the , U. S. Securities and Exchange Commission,  , Five Below , predicted that “tariffs imposed by the government could increase the cost to us of some products, lower our margins, increase our transfer related expenses, cause us to raise our prices to consumers, and lower consumer spending,” hurting , Five Below , sales and profits.
According to the report,” A considerable majority of our product is manufactured outside of , the United States, with , China , as our single largest supply of items we transfer and resource from local vendors,” the report said.
Five Below  stated that it would try to respond by bargaining lower supplier prices, finding products from any nations that don’t suffer tariffs, boost their own retail prices, or discover new , U. S.  , product sources.
The company predicted that higher tariffs by the , U. S.  , and “retaliatory” tariffs by other countries will likely increase , U. S.  , prices, causing consumers to buy less, further lowering retail sales and profits, adding to the direct impact on , Five Below , imports, and higher imports, the company said.
Striggling before tariffs
Prior to President Donald Trump’s election last fall, his campaign to increase tariffs in China, which are currently 145 %, or 1.45 import taxes for every dollar worth, had struggled.
One of the few stores that continued to expand was COVID shut down in the early 2020s and the late 2010s ‘ retail store consolidation. As CEO , Joel D. Anderson , and other senior officers resigned from their positions on the company’s board last year, cofounder , Thomas Vellios , stepped back into an executive role.
Vellios , a former target of 260 stores this year, was down to about 150, and Five Below’s planned growth was slowed. Anderson’s trend has since changed to bigger stores and more expensive goods.
Five Below were tapped for the position of chief executive in December, along with Winnie Park, who was also appointed. Park held positions at Forever21 and PaperSource in the past.
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