Autumn is here and everyone is getting ready to dress up for Halloween — including that vacant retail space near your house. For a brief period, the shelves will be stocked with costumes and the facade will wear a sign reading “Spirit Halloween.”
These pop-up stores may only last for a couple of months, but Spirit Halloween has been a part of US culture for over 40 years. It debuted in the Bay Area in 1983, and in October 2023, it had over 1,500 stores. But by the time November ends, that number shrinks to zero.
Spirit Halloween has become a bit of a joke (the company even joined the fun), but there’s nothing funny about the brand’s business model. It actually makes a lot of sense, and last year, it earned the business $1.1 billion in revenue. And there’s no sign of stopping. As Americans get into the Halloween spirit, the store is poised to make massive profits by using its same old tricks.
The early lore
Spirit Halloween started with humble beginnings. In 1983 founder Joe Marver temporarily added Halloween items to his store, Spirit Women’s Discount Apparel. The next year, the first dedicated pop-up shop opened and the retailer opened more locations annually. In 1999, it had over 60.
That year, Marver also sold the brand to Spencer Gifts LLC — a retailer typically in shopping malls known for its gag gifts and adult-themed humor. When it comes to Halloween, this brand doesn’t play around; you can still find costumes and decorations inside the mall stores. But Spirit Halloween was an opportunity to take the merchandise outside of shopping malls.
Some people may be surprised that Spencer’s, a brand that’s generally recognized as immature, ventured into such a successful business model. It also makes sense. The company’s products aren’t known for their quality, but Halloween costumes typically have a short lifespan. Plus, the brand’s adult humor allows it to sell more risque costumes than big box retailers.
Today, Spirit Halloween states that it has over 1,500 stores in the US, but that could be entirely different next year. That’s the genius behind the stores — they’re designed to be as mobile as a trick-or-treater, and the company intentionally moves from vacant retail space to vacant retail space.
The trick behind the treat
For Spencer Gifts LLC, Halloween can begin as early as January — and it starts like a horror movie, in an abandoned lot. That’s when the business starts looking for unoccupied retail space that could host a store.
In today’s retail climate, it’s not hard to find sites suitable for a Spirit Halloween. The brand is open to spaces of any size, and it doesn’t shy away from the fact that it possesses unoccupied lots. If you go to the store locator, locations often identify the site’s former occupants to help customers find stores.
Spirit signs temporary leases to make use of spaces that would otherwise be unused. For landlords, it’s an opportunity to make some profit without serious commitment. Generally, popups open in September, but if another business wants to sign a lease, it’s no problem. Spirit Halloween will vanish in November.
But, if there’s a lot of retail space because brick-and-mortar stores are closing, why is Spirit Halloween opening so many physical locations? Halloween is a special time of year when people actually want to leave the house. Before they go out to have fun, they need to head to the store for a costume. Spirit is a one-stop shop, and it tends to have suitable options for people who wait until the very last minute to get their costumes.
For the folks who didn’t wait, the stores also helped to fulfill online orders. Weeks before the trick-or-treaters march down the street, Spirit Halloween locations are masquerading as warehouses and helping to put costumes in motion.
Is Spirit Halloween here to stay?
Most likely, Spirit Halloween isn’t going to have the same address next year, but you also won’t have a hard time finding one. The brand will be back to its same ol’ tricks — finding vacant retail space, selling costumes, and then disappearing. And so long as Halloween remains popular, there will be demand for Spirit Halloween’s services.
Perhaps the only thing that could end Spirt Halloween’s run would be the lack of available retail space. At this pace, that seems very unlikely because stores are expected to close at a faster rate in the years to come. Some of these areas might be transformed into offices or housing complexes, but those conversions won’t outpace the number of retail closures.
More likely, Spirit Halloween’s business model is going to be replicated for other occasions. You may have seen other seasonal stores follow Spirit’s blueprint (think, Christmas shops), but we’ve yet to see a chain copy this model on a massive scale.
Spirit Halloween found opportunities where other businesses are struggling, but it makes sense that Spencer Gifts would be the brand to see the potential. The idea of stores temporarily filling spaces is more common in shopping malls, and the business expanded that idea to a larger scale. You can bet Spirit Halloween will have no trouble crawling back in the future. Retail stores are temporary, but Halloween always has a sequel.
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