How Spirit Halloween Built a Billion-Dollar Empire from Empty Stores

Ajit Kushwaha

With a new way of doing things, Spirit Halloween has become a unique retail force by catering to a niche market.

As Halloween gets closer every year, Spirit Halloween moves into storefronts that weren’t there before, briefly turning them into Halloween wonderlands full of costumes, decorations, and themed goods.

Spirit Halloween has grown into a billion-dollar company with over 1,500 sites across North America thanks to smart real estate moves and perfect timing.

Here, we will talk about how Spirit Halloween has grown from a seasonal idea to a billion-dollar business, focusing on its business plan, timing, and unique customer appeal.

The Birth and Evolution of Spirit Halloween

Spencer’s, a store that sells unusual gifts, bought the Spirit Halloween chain in 1999 and helped it grow quickly. It had started out as a small, niche business.

As of 2003, the chain had 130 locations, and leaders like CEO Steven Silverstein saw a big opportunity for growth.

Spirit Halloween set out to open 400 stores, but they now have over 1,500 stores across North America, which is a huge increase from their original goal.

The Spencer’s purchase was a big part of Spirit Halloween’s growth. Spencer’s experience in novelty and seasonal retailing was useful for Spirit’s strategic growth.

Over the years, Spirit Halloween’s leaders have consistently set new standards, going above and beyond as they expanded their Halloween products across the country.

Real Estate Strategy: Pop-Up Power

One of the key factors in Spirit Halloween’s success is its unique real estate model. Spirit Halloween doesn’t operate year-round locations; instead, it specializes in short-term, seasonal leases, primarily in vacant storefronts of bankrupt or struggling retailers.

From former Kmarts to closed-down BuyBuy Baby locations, Spirit Halloween transforms empty spaces into temporary retail gold mines.

This approach minimizes overhead costs while maximizing exposure in high-traffic areas during peak Halloween shopping season.

For landlords, leasing out their vacant properties to Spirit Halloween is a win-win. Empty properties often attract vandalism and decrease the overall value of surrounding real estate, but Spirit Halloween revitalizes these spaces, bringing in foot traffic and potential new customers for neighboring businesses.

According to the CNBC video, Spirit’s seasonal presence allows landlords to secure revenue from otherwise empty spaces while they continue to search for long-term tenants.

In one example from New York City, Spirit Halloween opened a flagship store in a 21,000-square-foot space that had previously been a BuyBuy Baby.

With the property owner asking around $100 per square foot for the ground floor, Spirit’s temporary lease filled a gap and kept the property from sitting idle.

Spirit Halloween’s Revenue Model: They Make the Most in Just Four Weeks

Spirit Halloween works on a very tight schedule, while most stores depend on sales all year or during big shopping days like Black Friday.

The company makes most of its money in just four weeks before Halloween, which takes an incredible amount of accuracy and speed.

In the next few weeks, Spirit shops will open, stock their shelves, and serve a lot of people who want to get things they need for Halloween.

Even though Spirit Halloween only opens for a short time each year, it makes a lot of money. In the U.S., people spent about $11.6 billion on Halloween in 2024, up from $8.8 billion in 2019.

Spirit Halloween has grown very quickly, and now their sales have reached about $1 billion. This is because people are spending more money.

Because of the COVID-19 pandemic, people with extra money from stimulus checks started buying things for holiday celebrations, like Halloween outfits and decorations.

Experiential Retail: They Create an Immersive Halloween Experience

This ability to make buying at Spirit Halloween feel real and interesting is a big part of its success. Each Spirit Halloween store is more than just a place to buy things; it’s an experience.

With their moving robots, creepy displays, and fancy decorations, stores have a mood that you can’t get when you shop online.

People like families and Halloween fans who like to look at the displays and try on costumes in person are drawn to shops with this hands-on element.

Spirit Halloween does have a web store, but only a small portion of their sales come from there. Spirit Halloween’s business plan depends on the in-store experience, which makes people more likely to buy things on the spot and lets them see for themselves how good the products are.

As part of their holiday traditions, many customers look forward to Spirit Halloween shops opening every year.

For these customers, each visit to the store is a memorable experience that they look forward to every year.

The Seasonal Lease Advantage: Low Commitment, High Return

Short-term leases are a big part of Spirit Halloween’s business plan because they give the company flexibility and let it respond to changes in the market.

Most of the time, Spirit Halloween’s leases are only a few months long, from late summer to early November.

This plan keeps the business from having to sign long-term leases and pay high overhead costs, which would not be possible for a store that is only open for a short time each year.

Spirit Because Halloween only rents for a short time, the company can also get better terms from property owners, who want to fill empty spaces briefly rather than leaving them empty.

Spirit has to pay more for some high-traffic areas, like New York City. However, suburban rents are usually cheaper, ranging from $20,000 to $40,000 for the Halloween season.

Spirit Halloween has built trust with landlords as the business has grown, which lets it get great sites at low prices.

Larry Link, president of the New York real estate company Level Group, told CNBC that Spirit Halloween’s track record has made pop-up shops less risky, which makes it a good tenant for landlords who might not normally rent to seasonal stores.

Expansion Beyond Halloween: Spirit Christmas

By opening Spirit Christmas shops in 2024, Spirit Halloween made a smart move to grow its business beyond Halloween.

10 stores are part of this pilot program. After Halloween, eight of the stores will switch from Spirit Halloween to Spirit Christmas.

By extending existing leases for a longer time, Spirit Halloween can keep some shops open through the holidays, making even more money without having to negotiate new leases.

The fact that the company is willing to try new things and change its business plan to fit new markets shows that it is ready to innovate.

Spirit Halloween has been successful because it offers an interactive experience. Spirit Christmas could do the same for people who are looking for holiday decorations and goods with a holiday theme.

The Future of Spirit Halloween: A Model Built for Expansion

Spirit Halloween’s pop-up stores show us what stores will be like in the future as they continue to grow.

In a time when traditional stores are having a hard time, Spirit Halloween has shown that people still want to shop in person, especially when the shopping experience is unique and memorable.

The success of Spirit Halloween shows that pop-up stores can be a great way to run a business if they are done right.

But as Spirit Halloween grows, it also has to deal with problems. The company depends a lot on one holiday season, so it can lose money if people’s spending changes or if Halloween habits change.

Also, the rising costs of prime store spaces, especially in cities, could hurt the company’s ability to make money if it can’t get good lease terms.

These risks could be lessened by Spirit Halloween trying new things, like making Spirit Christmas bigger or trying out pop-up ideas for other holidays.

The company could also reach customers who prefer to shop online by making its online presence stronger.

However, it would need to find a way to digitally replicate the in-store experience to keep its unique draw.

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Ajit Kushwaha is a stock market investor and business owner of a chips manufacturing company in Hazaribagh, Jharkhand, India. He holds a Bsc. from Vinobha Bhave University and leverages over 5 years of stock market experience in managing investments and his snack food business.
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