(FORTUNE Small Business) – As American tweens (ages 8 to 15) make more and more spending decisions, a new retail chain called Five Below has a slogan they might like: "Whatever you've got will buy a lot." Provided, of course, you're in the market for soccer balls, sparkly pens, inflatable chairs, and Hilary Duff posters. Five Below is an updated five-and-dime for the "Deal with it, mom" demographic. Everything in the store costs $5 or less, always in whole-dollar amounts. Since its launch in 2002, Five Below has opened 23 stores within three hours' driving distance of its Philadelphia headquarters. Although the company declined to comment, one investor has said he anticipates several hundred Five Below stores in the next five to seven years.

The men behind the business are David Schlessinger, a serial entrepreneur best known for creating educational toy retailer Zany Brainy, and his former CEO there, Tom Vellios. Zany Brainy went public in 1999 and grew to $400 million in revenue and 180 stores. (After Schlessinger cashed out, the business was sold and later reorganized as part of a bankruptcy; Vellios left soon after, and the company was ultimately shuttered.)

Five Below keeps prices low by buying large quantities of overstock and closeout merchandise. Dollar stores are notorious for oddball, off-brand inventory, but Five Below has organized departments stocked with recognizable brands: Spalding volleyballs, Coke, and Crayola Crayons.

According to William Cody, managing director of the Jay H. Baker Retailing Initiative at the University of Pennsylvania's Wharton Business School, Five Below is centered among a number of trends. "Traditional toy stores can't seem to compete against Wal-Mart," says Cody. "On the flip side of retail, dollar stores and extreme-value grocery stores are doing well."

In what may be a sign of the concept's validity, Five Below already has a competitor: BTween $1 and Five, a Texas-based chain that launched in July and is also selling tween items at prices of $1 to $5. —JULIE SLOANE