(evil laughter sounds) - [Narrator] It's that time of year, when vacant storefronts, temporarily transform
into SPIRIT HALLOWEEN, that spooky seasonal retailer, that's seemingly everywhere overnight. - For SPIRIT HALLOWEEN,
a POP-UP lease is ideal, because then they're
only paying for space, when they truly need it. - [Male Consumer] Guess
what's finally open, The Spirit Store, happy day, happy day. - [Narrator] And with
consumers expected to spend, a record amount for the HOLIDAY, SPIRIT HALLOWEEN has opened
more stores than ever this year. So how does SPIRIT HALLOWEEN capitalize, on abandoned spaces in local markets, and how does it manage to transform, those vacant storefronts so quickly? This is "The Economics
of SPIRIT HALLOWEEN." The first SPIRIT HALLOWEEN, popped up in 1983 in
Castro Valley, California. It was an extension of
founder Joe Marver's, women's clothing store. - Traditionally, October
is a very slow month, for retail general, and
there was a HALLOWEEN store, in the strip center that he operated and he saw that there were
lines coming out, so I said, that might be a good idea. And so with that, he turned his boutique, into a HALLOWEEN store and
kind of the rest is history. - [Narrator] In 1999,
Marver sold the company, to SPENCER GIFTS, that mall
store known for gag GIFTS. And it's built a reputation
among those who love HALLOWEEN. (kids shouting) So much so, that more than 2000 fans, showed up to the July grand opening, of the flagship store in New Jersey. But the retailer is hoping
last minute shoppers, come through the door too. - One of the advantages is
that they're everywhere. So if someone has
forgotten about HALLOWEEN and needs to get a last
minute costume and can't wait, for it to be delivered
after it was bought online, then they can just pop
into a SPIRIT HALLOWEEN. - [Narrator] While shoppers
can buy HALLOWEEN Fair, on the company's website at any time, none of its physical
locations operate year round. - SPIRIT HALLOWEEN
prefers a temporary lease, because it is not a year round business. So for them, they wanna save
as much money as possible, on real estate, and so
it makes much more sense, for them to take space temporarily. - [Narrator] SPIRIT HALLOWEEN says, convincing landlords wasn't easy at first. - Years ago when we sat down
with landlords and said, "hey, we've got this idea, we gotta popup HALLOWEEN store or we're gonna come for two months", we'd just get the look
of, you know, really what? You know, why would I bother with that? - [Narrator] Tough
landlords tend to prefer, long-term leases, POP-UPS can be an
alternative to empty space. - In the years following
the Great Recession, as retail vacancies increase, landlords found that POP-UPS, were an effective way of filling, space that had been
vacant for a long time, because of course, some revenue
is better than no revenue. - [Narrator] And to make temporary leases, more attractive to landlords, the company adds kick out clauses. - If they find a space
where they wanna open, but the landlord finds another tenant, who's willing to sign a long term lease, before a certain day, maybe it's middle of June, for example, then SPIRIT HALLOWEEN loses that space. (evil laughter sounds) - [Narrator] For SPIRIT HALLOWEEN, finding real estate is
a year round business. When stores shut down for one season, the company is already talking
to landlords about the next. Big spaces are key. Up to 50,000 square feet, often where big box
retailers used to live. Those storefronts are
often in shopping centers or strip malls, but
can also be standalone. And signing the lease
is just the beginning. The retailer says, setting up the stores, is another logistical challenge. - I mean, literally, we
are starting from scratch, in every single store. We inherit an empty location and we have to bring in not
only all the merchandise but all the fixturing. We have to hire the entire staff. - [Narrator] According to the
National Retail Federation, spending on HALLOWEEN is
expected to hit a record, $10.6 billion in 2022. On average, customers are
planning to spend $100 each, on COSTUMES, decor, candy
and cards this year. And 36% of customers plan
to shop at specialty stores, like SPIRIT HALLOWEEN. And with 1,450 stores
across the US and Canada, it's one of the most ubiquitous. - It's a sign of fall. It's kind of like you get
your pumpkin spice latte, you're back to school. You see SPIRIT HALLOWEEN open up, in shopping centers on your drive to work. - [Narrator] One of its
biggest competitors, Party City's Pop-Up
Branch, Halloween City, operated 275 stores in 2019 and scaled back during the pandemic. SPIRIT HALLOWEEN's POP-UP model, has become such a fixture of the season, that it's inspired a new movie. - POP-UP HALLOWEEN store
in a creepy lot, awesome. - [Narrator] And countless internet memes. People joke about how
quickly the company moves in, after something else shuts down. - We kind of enjoy the
meme value of spirit. We bring life and we bring
joy, we bring energy, we bring a whole, you know, new reason. And so the main value of spirit, is recognition of that value. - [Narrator] That's part of the reason, SPIRIT HALLOWEEN decided to open, all of its planned 1400 stores in 2020, while competitors opened fewer
during the Covid-19 pandemic. In 2021, the company said it
experienced product delays and increased shipping costs. - Last year, we didn't realize, the magnitude of the issue with
the supply chain until April and when suddenly everything dried up. By the end of the season, we had received all of our merchandise, but it was through some
really difficult cartwheels and somersaults. - [Narrator] The retailer says, all of its locations are
fully stocked this year. - [Creepy Toy] I can move
With HALLOWEEN spirit. - [Narrator] For fans of HALLOWEEN, the company wants to be the
beginning of the HOLIDAY. - Coming to a SPIRIT
HALLOWEEN is an event. It's something that the
fans really look forward to. It's almost like the new season. And when we come, that's
when HALLOWEEN starts. - [Narrator] And for landlords
with empty storefronts, SPIRIT HALLOWEEN continues to
temporarily bring life back, to those abandoned spaces. (cheerful upbeat music)
