Rising up from the graves of recently departed big-box stores, a wave of ghoulish retailers has descended upon the Chicago area.
Festooned with orange banners, animatronic monsters and neon spider webs, scores of makeshift Halloween stores are filling the void in recession-battered strip malls, at least for a few more weeks.
“We like the big boxes like the Circuit City stores or the Linens ‘n Things that may have gone out of business,” said Don Rose, director of marketing for Halloween USA, a Michigan-based company with more than 250 temporary Halloween stores in the U.S., including 30 in the Chicago area. “It just seems to fit our model pretty well.”
The fly-by-night costumers have proliferated over the past several years, driven in part by a glut of vacancies and a handful of aggressive national retailers. Popping up for about two months — usually from Labor Day through Nov. 1 — the low-rent, high-profile tenants have become an integral part of the holiday, which is taking a hit from the recession but is still expected to generate nearly $5 billion in nationwide sales for the season.
“It’s a growing business, and we don’t see it changing for quite some time,” said Rose, whose company has doubled its total store count this year.
“Pop-up” stores represent a big trend in retailing because they’re an efficient way to attract shoppers and attention, particularly when so many malls have vacancies. This Christmas season, Toys R Us plans to roll out about 340 temporary Holiday Express stores, about 80 of which will locate in malls.
For Halloween, three companies have more than 60 stores between them in the Chicago area, many competing block by block for the fleeting purchases. Almost nonexistent until about a decade ago, the trend picked up steam in 1999, when New Jersey-based Spencer Gifts acquired a regional player, Spirit Halloween with ambitions of going national.
Starting with about 60 locations, the company has grown into the largest seasonal Halloween retailer in the country, with 723 temporary stores this fall, including 28 outlets in the Chicago area.
“It’s hard for big-box stores to capitalize on that last 10 days before Halloween, when the consumer really wants to buy, because that space is too valuable for them and they need to start setting up for Christmas,” said Tony Detzi, vice president of Spirit Halloween. “That’s why the temporaries have been able to grow and flourish.”
Negotiating budget short-term leases that range from $15,000 to $30,000 for the season, Spirit’s 55 full-time employees spend much of the year lining up real estate. Beginning in August, about 12,000 temporary workers are hired to staff the stores, most of which are company-operated. While declining to disclose annual revenues, Detzi said low overhead makes the stores “quite successful.”
Spirit explores thousands of sites to secure its spaces, as not all landlords look favorably on temporary tenants.
“Believe it or not, you still get turned down by a lot of people,” Detzi said. “A lot of landlords still have a stigma against a temporary because they feel it brings the value down of their shopping center.”
Vying for the best vacant storefronts also makes the business rather cutthroat. On the border between Highland Park and Northbrook, for example, three Halloween stores have set up shop along a half-mile stretch of Skokie Boulevard.
At the Village Square in Northbrook, a Halloween Express outlet has a well-lit but cavernous space formerly occupied by Circuit City. It is the Kentucky-based franchiser’s fourth apparition in the last five years at the shopping center, albeit in shifting storefronts.
Nearby, at the Crossroads Shopping Center in Highland Park, a Halloween USA outlet is debuting in a vacant clothing store. A few doors down, year-round retailer Party City, which is owned by the same company, New York-based Amscan Holdings Inc., is also in full Halloween mode.
“We wanted to keep out the competition so that Spirit wouldn’t roll in and hurt us,” said Halloween USA’s Rose.
Inside, the spaces feel eerily similar, with a plethora of skeletons and bats dangling from the ceiling and an endless loop of Halloween music blaring. Costume selections are likewise comparable, with vampires running especially hot this year in the wake of such hits as “Twilight” and “True Blood.”
Each store also features a wall devoted entirely to “sexy” costumes. “That’s the most popular spot in the store,” said Alice McDonald, manager of the Halloween USA store in Highland Park. “Every female that comes in here, that’s the first place they’re going to go.”
Stores are plentiful, but locating familiar haunts can be a challenge. Judy Oppenheim and her 10-year-old daughter searched in vain for the Halloween store they patronized last year before landing a Mad Hatter costume at Halloween USA.
“We drove to where last year’s store was and it wasn’t there,” said Oppenheim, of Highland Park. “But I had seen this driving around earlier in the week, so we knew there was a backup.”
Giving it up to fate, Lindy Waldman of Glencoe hit the road with her daughter and two friends, who ended up with matching Strawberry Shortcake costumes from the Northbrook Halloween Express store.
“They move around, but there’s usually an empty store going up and down Skokie (Boulevard),” Waldman said. “So we look for them and then we go.”
While Halloween retailers have benefited from prime locations, the recession is expected to take a chunk out of revenues this year, reversing a six-year uptrend. Companies are reporting a slower September, and total sales could decline by $1 billion from last year’s record $5.77 billion, according to the National Retail Federation.
Undeterred, Detzi predicts expansion will continue, with about 100 additional Spirit Halloween stores planned for next year. In November, the company will also test-launch temporary Christmas toy stores, a market that seasonal retailers have yet to crack. Spurred by the recent bankruptcy of K-B Toys, 25 ToyZam stores will open nationally, including four in the Chicago area.
“Any retailer, you’re going to expand until you see that you’ve hit your saturation point, and we haven’t found what that is,” Detzi said.
