.png)
1 hour ago
1
Every year after Halloween, Spirit Halloween’s stores empty out and the signs come down. To shoppers, the chain disappears, until next September or so, when another store pops up somewhere in the neighborhood. But to Steven Silverstein, it never closes.
“There’s nothing temporary about a temporary store,” Silverstein, CEO of Spencer Spirit Holdings, told Fortune. “We are 24/7, 365 Halloween, and you just don’t see it.”
Its stores open for eight to 10 weeks a year, but planning for next Halloween starts before this year’s doors close. The rest of the year goes to signing leases, making and shipping millions of costumes, and lining up tens of thousands of seasonal workers.
When Silverstein joined parent company Spencer’s in 2003, there were only 130 Spirit stores nationwide. Now, there are roughly 1,600 locations a year. Moody’s estimated that Spencer’s and Spirit together made about $1.9 billion in 2023, and Spirit’s two-months of operations brings in more than Spencer’s. This year, the company completed its purchase of Hot Topic, BoxLunch and Her Universe from Sycamore Partners, giving it more than 3,000 stores across North America.
Spirit is the largest Halloween specialty chain in North America, and its biggest rival is gone. Party City, which sold costumes alongside party supplies, filed for bankruptcy for the second time in Dec. 2024 and closed its nearly 700 stores by the end of Feb. 2025. Now, folks can turn to Walmart, Target or Amazon—or go in person to catch a show at Spirit.
“We don’t sell anything anybody needs. We only sell things you have to have,” he said. “It’s based on wants, not needs.”
Are you not entertained?
Silverstein came to Spirit from Linens ‘n Things in 2003, well before its 2008 bankruptcy. But the lesson he brought with him came from earlier, at Bloomingdale’s, where he started in 1985 under CEO Marvin Traub, who Silverstein credits with bringing retail theater to the forefront. In those days, he said, Bloomingdale’s was famous for its country promotions.
“We are in an entertainment business,” Silverstein said of Traub’s lesson. “We need to use our stories to entertain and delight the customer.”
The first Spirit store he saw had none of the bells and whistles you expect of today’s modern-day equivalent. The fixtures were made from the very boxes that the costumes came in, simple merchandise boxes wrapped in black plastic, and the checkout counter was made of two-by-fours and cement blocks. Local Halloween shops were opening on every corner, and Party City was [at the time] the main destination.
He had one goal: turn Spirit into the destination. He wanted shoppers to say they were going to Spirit Halloween, not just to a Halloween store.
The idea kicked into high gear in 2005, when he walked into a Spirit store in Chicago where a store manager had built a pirate ship in the middle of the floor, with a skeleton at the wheel and fans blowing blue fabric around, complete with flickering lights. Silverstein, truly entertained, asked the manager if he could teach other store managers to do the same.
“We got to bring this guy back to New Jersey,” Silverstein recalled saying. “We have to do this in all of our stores.”
That became the In Store Experience, which fans call the ISE, according to the Spirit Halloween Fandom site. Each year comes with a new theme that fans try to guess. This year’s is a haunted summer camp called Camp Harbor Lake. Silverstein likens it to “five senses retail.”
Finding the building
It starts with real estate: the search for buildings runs in March and April, when Spirit lines up its locations and signs leases. The company is “opportunistic,” Silverstein said, and goes after vacant space. But it doesn’t pick buildings just because they’re empty.
“We want to be somewhere we’re going to be seen,” he said. “Because we’re not always in the same place, where we are is a critical question that we’re constantly thinking about.”
Spirit doesn’t pay market rent. It pays a lump sum for a space that would otherwise earn the landlord nothing. And the leases run for just as long as the store remains open: eight to 10 weeks.
“We’re the empty seat on the airplane,” he said. “If we don’t go in there, the landlord is not going to generate any revenue.”
Silverstein said the deal helps the other tenants too, because a Spirit brings shoppers to a shopping center that would otherwise have a dark storefront. Often, Spirit returns to the same buildings year after year.
The model works: this fall, about 100 Spirit Halloween stores are in former Party City buildings, according to an Axios analysis of Spirit’s store locator.
“Even though we are called pop-up, we really do look at ourselves as being permanently in these markets,” he said.
Building 1,600 stores at once
Once the leases are signed, Spirit has to fill them. About 75% to 80% of Spirit’s merchandise is designed, developed and sourced by the company, mostly in Asia. That means Spirit manages every step from factory to shelf.
Goods start shipping in April, but they can’t all arrive at once, Silverstein said, because there’s nowhere to put them. Shipping containers go to four or five distribution centers in North America, which sort the goods into store groups. Those groups go to 63 third-party logistics sites this year, and each site stages the boxes for 25 to 30 stores before loading them onto trucks.
“They’re literally virtually creating a store,” Silverstein said. “If you imagine 1,600 stores happening all at the same time, it’s like a web of activity.”
Training 52,000 workers
Spirit employs more than 52,000 people during the season, and many come back every year. Silverstein said some plan their year around working at Spirit.
The company describes its structure as an inverted pyramid, with store workers at the top.
“We know that our front line is the most important part of our business,” he said. “It’s not about a top-down driven organization.”
Much of the work behind the scenes goes into making a complex store setup simple enough for seasonal staff to carry out on time, he said, so that workers feel able to run it themselves.
Yes they’ve seen the meme
Spirit has become mononymous, and with that fame comes being in the cultural zeitgeist, namely, in memes from fake Spirit Halloween costume packages of public figures to a Saturday Night Live skit during the show’s 50th anniversary season. Asked about the memes, Silverstein deadpanned, “I don’t know what you’re talking about.”
Then he said the company has earned them.
“When SNL did the skit, hey, that’s the highest form of flattery,” he said. Spirit answered with a costume of a 50-year-old comedy show. Its only contribution to the meme packages was a costume of a Spirit Halloween store.
Spirit spends little on traditional advertising and that’s because Silverstein calls the company “alternative marketers,” letting its storefronts, the internet and brand tie-ins do the work. Spirit has partnered with Dunkin’, Butterfinger and Chipotle and makes a limited-edition costume for each. This year it partnered with Goodyear and sold a blimp costume. At the grand opening of a store, a man jumped out of a blimp into the parking lot.
Silverstein said the same idea runs through Spencer’s and Hot Topic.
Swallowing the mall
Spirit’s newest act is Hot Topic. In August, Spencer Spirit agreed to buy Hot Topic, BoxLunch and Her Universe from Sycamore Partners, which took Hot Topic private in 2013 for about $600 million. The deal closed in early September. Terms weren’t disclosed.
For a generation of mall rats, Hot Topic was the mall. Orv Madden opened the first store in Montclair, Calif., in 1989, and through the 2000s it was where teenagers went for band tees, spiky chokers and skinny jeans. Licensed band T-shirts made up about 40% of its revenue in 2007, according to that year’s annual report. Since then it has leaned into anime, gaming and fandom merch, and in 2015 it launched BoxLunch, a pop-culture gift chain.
Hot Topic has more than 615 stores and BoxLunch more than 280. Both keep their California headquarters and run independently, and Hot Topic CEO Steve Vranes, who has run the company for more than a decade, now reports to Silverstein.
““Hot Topic is the best at really talking to the fans of their properties. They are in the zeitgeist when it comes to talking about what’s going on in pop culture.” he said. “I’m entertaining you.”
This story was originally featured on Fortune.com
English (US) ·