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Halloween in America has become a big business - some $6 billion big. For those shopping for the perfect costume this year, Spirit Halloween leads the way.
With 1,165 stores across the United States and Canada, the company is in line with the likes of Best Buy (BBY) in terms of its retail footprint. The big difference? In a couple weeks almost all those Spirit stores will be gone.
Started in 1983 by a California dress seller, Spirit has become the go-to Halloween pop-up store. But since the company only has about two months every year to connect with customers, we wondered how CEO Steven Silverstein and his team spend the rest of the year.
“We are a physical retailer two months a year,” he told Yahoo Finance, “September and October when you see us everywhere. The rest of the year we are a virtual retailer...we’re working to put this together the rest of the year.”
Silverstein says he has a core team of a couple hundred that, despite what the calendar may say, work on Halloween all year. That team includes merchants, operations and real estate.
One of the biggest parts of that operation is finding store locations. While it was once a full time job convincing landlords to rent empty space in a shopping center for just a few months, Silverstein says the tables have turned.
“Today, in this real estate market, we are well known and sought out as an opportunity for centers where there might be a vacant storefront,” Silverstein says.
Once August rolls around, Spirit’s core employee base begins ballooning to the 20,000 seasonal workers needed to make these stores work in the run up to the holiday.
It’s a fairly unique business, though not totally unheard of. Party City (PRTY) has a few hundred “Halloween City” stores peppered across the country that it uses as test cases for more permanent Party City locations.
It works for both Party City and Spirit because, as retail analyst Brian Sozzi of TheStreet.com says, “they sell cheap goods made in third world countries - Indonesia, China - and they’re at huge mark-ups so the business is very, very profitable.”
Regardless of where you shop, some of the hot costume trends this year include characters from Disney’s Descendants movie, the Teenage Mutant Ninja turtles and, as they always are, super heroes.
Those costumes can be predicted by talented buyers in a retail environment. What can’t be predicted are those last minute, late in the season cultural phenomena.
This year, Spirit had to rush a Caitlyn Jenner costume into production due to high demand and took a little heat from the trans community in the process. Silverstein, however, argues “Caitlyn Jenner is a real life superhero. She’s made some incredibly courageous choices...that is the sort of thing that is relevant to Halloween. We are celebrating her.”
In an interview on the Today Show, Jenner agreed.
But it’s not just the costumes that bring customers to Spirit’s stores. Each year they outfit their spaces with interactive and often creepy in store experiences or ISEs.
“Sure you can buy it online,” says Silverstein. “That’s buying for convenience, but really we’re a destination. The ISE is part of that experience.”
Whether you buy in-store or online and spend Halloween as Donald Trump, Caitlyn Jenner or pumpkin, after all the parties and trick or treating - November first always comes.
So what does Spirit do with all those costumes? “We are in the permanent Halloween business,” Silverstein notes. “Our inventory doesn’t have the perishability and so we manage it and we restock it.”
And for those looking ahead to next year...they put it on sale too!
- Personal Finance - Lifestyle
- Holidays & Celebrations
- Spirit Halloween
