Spirit Halloween bet on the pop-up model and won

Spirit Halloween pop-up costume shops have become ubiquitous and virtually synonymous with the October dress-up holiday in some cities. 

While the specialty retailer has no permanent physical store fronts, it opens more than 1,500 temporary brick-and-mortar locations each fall, before disappearing once the holiday concludes. Its business model has proved so successful that the retailer plans to open 10 Spirit Christmas stores for the first time this year. 

“Real estate has been severely disrupted, so it is available, plus it is a really unique holiday,” retail analyst Oliver Chen said of Halloween, and the business’s success as a seasonal retail chain only. 

But quickly stocking, staffing and opening up stores, only to close them down months later is no easy feat.  

“Running these is hard,” Chen said. “Part of their core competency is truly logistics and the difficult nature of setting up a store and then closing it.”

Disappearing storefronts

Real estate availability — and affordability — are essential to any pop-up retailer’s viability and success. 

“Site selection is really important and part of the equation depends on the deals you can get,” Chen said.

Halloween is also a unique holiday. Cultural trends play a huge part in determining what kinds of costumes will sell. As a result, businesses must be nimble, and able to quickly execute on a theme. 

“It is a holiday that’s built for change. They take bets on balancing what might be popular. It’s about trying for the right formula when you aren’t necessarily sure what will go viral and why,” Chen explained. 

Spirit’s ephemerality is so visible that even Saturday Night Live poked fun at its transience in a recent sketch.

“Since 1983, Spirit Halloween has been helping our struggling communities by setting up shop in every vacant building in the country for six weeks and then bouncing,” a Spirit employee played by Heidi Gardner says in the parody. 

She also jokes about the company providing workers with six-week-long jobs. 

Spirit did not immediately respond to CBS MoneyWatch’s request for comment. In an interview with NBC Philadelphia, the company’s CEO, Steven Silverstein, explained that operating Halloween stores is a year-round endeavor. 

“We are just physically there for three months. The other nine months there is a tremendous amount of planning and preparation and background work that’s being done,” Silverstein told NBC Philadelphia. 

Spirit’s foray into Christmas

Spirit this year is opening Christmas-themed stores in Connecticut, New York, New Jersey, Massachusetts and Pennsylvania.

“Spirit Christmas is a new concept for us, and we’re hopeful it will resonate with our customers. Our goal is to create a festive retail experience that captures the spirit of the season, much like we do for Halloween,” Spirit said in a statement to CBS News Philadelphia.

The company stands to capture an even larger share of consumers’ income, given that winter holiday spending reached a record $964 billion in 2023, a 4% increase from 2022, according to the National Retail Federation (NRF). Americans spent $12.2 billion on Halloween costumes and decor in 2023, according to NRF data. 

“They are extending their purpose to another seasonal moment,” Chen said of the Christmas stores experiment.