As if by magic, new tenants are appearing at a slew of vacant stores that once housed outlets of Bed Bath & Beyond, Kmart, Sears, Lord & Taylor, Tuesday Morning, Big Lots, Christmas Tree Shops and A.C. Moore. That's because Spirit Halloween is once again popping up in towns across the United States and Canada.
The Egg Harbor Township, New Jersey-based specialty retailer this year plans to open a record number of pop-up stores, more than 1,500, compared with 1,450 last year, according to a company spokeswoman. The retailer, which is celebrating 40 years in business, temporarily leases storefronts that are typically 5,000 square feet to 50,000 square feet to build out a brick-and-mortar footprint for the Halloween season leading up to the spooky annual holiday celebrated on Oct. 31.
In what's become an annual tradition, Spirit Halloween fans swarmed the grand opening of the company's flagship store in Egg Harbor Township, even though it was only the last weekend of July, a full three months ahead of the holiday. Nearly 3,000 people from across the country attended, with hundreds lining up the day before to get in. In addition to getting a first peek at the store, shoppers could enjoy tarot card readings, graveyard bowling, face-painting and photo opportunities.
Halloween has been a growing category for retail with sales increasing annually, according to the National Retail Federation. Last year that trade group predicted a record $10.6 billion in spending overall for the holiday.
Spirit Halloween can generate rental income for a now-vacant store until a permanent tenant is found for the space by its landlord. Owners of vacant retail space get help paying their carrying costs, such as taxes and insurance, while the pop-ups help drive foot traffic.
Spirit Halloween in some cases is leasing former store sites of chains that have downsized or liquidated, such as Bed Bath & Beyond, Kmart, DressBarn, Sears, Pier 1, Tuesday Morning and CVS, among others. Those locations are in strip centers and malls strewn across North America.
Spirit Halloween, which calls itself the nation's largest Halloween retailer, has plenty of competition. Giant discount chains such as Walmart and Target sell all kinds of Halloween-related goods, as does Amazon.
The company also has a rival in Party City, which usually opens Halloween City stores for the season. But the Woodcliff Lake, New Jersey-based party-supply retailer filed for Chapter 11 bankruptcy protection early this year. Despite that proceeding, Party City will be opening Halloween City pop-ups this season, according to a company spokeswoman.
"We’ll have more details about openings over the next several weeks," the spokeswoman said in an email to CoStar News.
Back when Party City filed for bankruptcy protection, one retail analyst was critical of its performance in the Halloween sector compared to Spirit Halloween and discounters such as Target.
"On competition, much of this has come from an increasing number of occasion-based pop-up stores, such as Spirit Halloween," Neil Saunders, managing director of GlobalData, said in a note. "These have become destinations for key occasions such as Halloween, which have traditionally been very lucrative for Party City, which now struggles to match the ambiance and authority."
Spirit Halloween leasing officials weren't available to discuss their plans on Friday. But the company's website outlined in detail what it is seeking in terms of store location.
"Conjuring up a little Halloween magic, Spirit Halloween can take your vacant store and — presto! — make it 'So Much Fun, It’s Scary!" the site says. "Our stores are the most comprehensive one-stop shop for everything Halloween."
Spirit Halloween said it looks for temporary three-month leases that include a so-called "kick-out clause," allowing another tenant to lease the vacant store in the event the landlord secures a permanent deal for the space in question by June.
"Since Spirit locations open on or about Sept. 1 and remain open through Nov. 1, our ideal lease would run from mid-July through mid-November," according to the company website. "We like to locate our stores in power centers, strip centers, free-standing stores, major downtown retail locations and in major malls surrounded by a national retailer mix."
Spirit Halloween also aims to open stores in areas that have a population of 35,000 or more people living within a 3- to 5-mile radius, and with a car count of at least 25,000 vehicles a day.
The retailer is hiring 40,000 seasonal workers this year, the most ever for the season.