UNIVERSITY PARK, Pa. — Thomas G. Vellios, co-founder and chairman of the board of Five Below Inc., discussed a wide range of topics Feb. 1 in the Business Building’s Struthers Auditorium. Vellios spoke as part of Executive Insights, the signature speaker series of the Penn State Smeal College of Business.
Vellios has spent his career in various executive levels of retail sales, but he is best known for co-founding and leading Five Below Inc. Since the company’s founding in 2002, he has assumed the roles of CEO and president before ascending to executive chairman in 2015.
Five Below is a chain of discount stores that sells products that cost up to $5. Since he co-founded the company in 2002, Vellios has led the chain to growth of more than 750 stores with more than 10,000 employees in 33 states.
“We create demand selling discretionary goods. In layman’s terms, we sell stuff that nobody really needs. And we want you to buy it all the time,” Vellios said.
“I think it’s important to stay constant with change. We never wanted to be the innovator of a product; we’re not the first to market. We are the fastest and best second you will ever find.”
Among a wide range of other topics Vellios addressed were:
The importance of supply chain to Five Below
“Today, without supply chain, you really don’t have a business. Supply chain is rewriting, not only history, but the future of consumerism on a global basis. Since the beginning, we knew the supply chain was not only critical, but actually was the backbone of our business. Our ability to be creative and to be able to solve issues through supply chain is what would get us to the promised land. It helps us expand the real estate, it helps us move the meter on what types of products we can bring in, it moves not only the margin but the value we can bring to the customer.”
Five Below’s relationship with Smeal
“By the time we got to about 50 or 60 stores, I actually brought our team up, we came to Penn State. The supply chain program here actually helped shape a lot of our supply chain. Even today, we have a lot of Penn Staters who work, not only in our offices in planning, allocation, but also in distribution. A couple folks have left us to go launch their own startups. Penn State has played a very important role and a meaningful role in helping shape and run today a big part of our supply chain efforts.”
Leadership
“I tend to be demanding for myself first and then the organization. I am exceptionally passionate and connected to the customer. And I constantly remind myself of how little I know and how much more I need to go out and learn. I try to convey that to the team. The more we isolate ourselves and think we know it all, the quicker we fall into a trap.”
Success
“What makes me successful is the power of all. It’s always been the case. While I may push hard, while I may have an opinion or two or a hundred, it has always been easier for me to respect and accept the ideas of others. I don’t do it as a token gesture. I really believe if you let it all out, it’s OK to agree to disagree. I win through people. I’ve always won through people. The more you can liberate and empower the people around you, with clarity around the core mission and the values that you represent, the more successful you’re going to be.”
Failure
“Let’s be clear, failure is part of the recipe. No one is stupid overnight. And no one is a genius overnight. In any business, or initiative or process or schooling that you go through, it’s a marathon. Blood will fall. If you’re not scraping yourself, if you’re not injuring yourself on the way, if you’re not risking, and if you’re not failing, you will never succeed. If you have succeeded without failure, you probably have not reached your full potential.”
Workplace culture
“People need to feel good about going to work. It’s OK to let go and have a little bit of fun. That doesn’t mean you’re working any less harder. In fact, you might work differently, smarter, harder.”
Honor and integrity
“When it comes to honor and integrity, if you have integrity, it’s always the foundation, and part of the recipe of honor. To know it, to learn it and to practice it is not OK. To live it, it has to start with you and who you are. It’s easy for all of us to jump on the bandwagon of honor and integrity. But if you truly buy into that, it comes through. People will see it if you practice it. You have to walk the talk. And if you do it and you live it, there is no better place to work in, and there is no better organization. It will also reward you.”
About Smeal’s Executive Insights
Executive Insights is designed to complement the Smeal educational experience by bringing high-profile business leaders to the college to connect with students, faculty, staff and administrators. Past guests include leaders from organizations such as Amazon, Amerisource Bergen, Archer Daniels Midland, Barclays, BASF, Boeing, Credit Suisse, Dell, Deloitte, Dick’s Sporting Goods, EY, Five Below, GE, Johnson & Johnson, Kohl’s, KPMG, Macy’s, National Retail Federation, Nestlé, Oracle, Procter & Gamble, PwC, Samsung, Siemens, Verizon, TradeStation, Tumi Holdings Inc., and Urban Outfitters.