Ah yes, Spirit Halloween; the pop-up Halloween shop that makes you wonder how it survives the other 11 months out of the year. Particularly this year, the pandemic has created an uneasy attitude towards trick-or-treating which raises concerns for the Halloween retailer, who is already deep into their biggest time of the year. How exactly do they stay alive, both with and even without the threat of a pandemic?

Spirit Halloween Business Model

Let’s get a better understanding of exactly how Spirit Halloween operates year after year. Forbes caught up with Spirit’s COO and found that each year they quite literally build their business from scratch. Even before those doors close on November 2^nd, they’re prepping for next season. They scout and acquire temporary locations (which number 1,366 this year) and then hire and train 15,000 employees to operate their stores. The downfall of so many physical retailers has been a positive thing for Spirit stores, giving them plenty of options when searching for short-term leases.

The beauty of only operating a few months out of the year is having the opportunity to acquire as much feedback as possible, and then having a decent amount of time to alter the game plan for next season. They also operate a year-round online store, although it’s unclear as to how much these sales account for. Interestingly, their online store also features products for other holidays of the year but with a Halloween twist, of course. Who wouldn’t want a giant inflatable Jack Skellington dressed as Santa on their front lawn for Christmas? Back in 2015, Spirit Halloween sales brought in close to $400 million.

In addition to on and off season sales, Spirit Halloween also operates Spirit of Children, which is a non-profit organization that donates funds, costumes, decorations and more to the Child Life department of local hospitals with the goal of making the hospital environment “less scary” for kids (Seems a bit ironic). Interestingly, Forbes notes that this actually boosts business. A couple in Maryland will quit their day jobs just to work for Spirit Halloween and then at the end of the season, they donate all of their income from the job to Spirit Halloween to support the organization.

So off and on season sales and donations to Spirit of Children boost business, but what about all that merchandise that goes unsold? Luckily, most Halloween costumes don’t go out of style. Each Spirit franchisee puts a deposit of $25,000 down to cover interior design and merchandise. Spirit then takes a percentage of the items sold and whatever does not sell from these stores comes back to them for next year, keeping production costs down.

Adapting During a Pandemic

With trick-or-treating being such a controversial tradition amidst the pandemic, this year has been a unique challenge for the pop-up who probably did not consider COVID-19 in their plans last November. Nevertheless, they are encouraging consumers to consider celebrating in other ways and purchasing their products to help them do so. CEO Steven Silverstein commented on how Spirit Halloween is adapting, saying “We’re stocked with everything for themed video parties, decked out family dinner parties, costumed movie marathons and décor that lets all the neighbors know who loves Halloween the most on the block!” Despite assumptions of slower sales, he also mentioned that they are “seeing encouraging initial results and are anticipating a Halloween on par with last year.”

Even if consumers are not planning to go out for Halloween this year, they can still hop over to Spirit for a fun, interactive experience. Spirit prides themselves on the consumer experience that their stores provide and this year is no different. Each store stages “five or six haunted houses within the retail environment. Lighting, music, sound effects, and even life-sized animatronics separate Spirit Halloween from the competitive set.” Why not take a trip to your nearest Spirit shop to simply roam the aisles? Who knows, you may buy something you definitely don’t need (which is exactly what they’re counting on). Spirit hopes these in-store experiences will keep consumers coming back each year.

However, they recognize that especially this year many consumers may still be weary of shopping in store. For those consumers who still want to get in the spirit (HA!) of Halloween but don’t want to risk in store, Spirit Halloween has partnered with Instacart this year to deliver costumes, decorations and more to consumers’ front steps.

63% of American consumers say they are celebrating Halloween in some way this year, which means that Spirit Halloween stores are still hoping to take your money- we mean, they hope consumers still remember them when they go searching for all their Halloween needs.

 Have you visited your local Spirit Halloween this year yet? Let us know in the comments!

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