How does Spirit Halloween make money?

We’re bAaAaCk! But unlike a poltergeist, you want us around. Especially after we left you alone for so long. But, rest assured, in order to show how sorry we are... we’re all treats, no tricks as we get back into the podcast swing of things talking about the true spirit of the spooky season: Spirit Halloween.

Forbes.com - "Spirit Halloween's Scary-Good Strategy"

TheList.com - "The Untold Truth Of Spirit Halloween"

Indeed.com - "What does everyone do for a job after Halloween?"

Transcript

Ask a Question (explain why we chose topic)

• What’s the deal with Spirit Halloween? How do they make money 12 months of the year? How are they so successful? Do employees work just for the season and get laid off? Is there a CEO? Do they just spring into action October 1st? Is there a larger entity owning this whole shebang? Do they employees get benefits? What’s the TEA

Research Background Info (present data and articles)

• Forbes’ article “Spirit Halloween’s Scary-Good Strategy
• The List Article “The Untold Truth of Spirit Halloween”
• Indeed Forum for Spirit Halloween Employees

Hypothesis / Unique Angle (state our angle on the topic/data)

• Spirit Halloween has to be owned by a larger corporation in order to maintain profit outside of the Halloween season. 

Analyze Data (deep dive into data)

The Untold Truth of Spirit Halloween

• First lets get into some unknown facts about Spirit Halloween:
• The infamous seasonal retailer first opened its doors back in 1983 after its founder, Joe Marver, realized how big the demand was for seasonal items.
• Since then, the company has significantly expanded and now has over 1,400 locations throughout the United States and Canada
• There are a few untold facts about this organization that some Halloween fans would be shocked to learn!
  • Lovers of Spirit Halloween don't need to wait for the pop-up shops to open their doors (between mid-August to 3 days after Halloween) to snag some good Halloween merchandise. Instead, anyone that needs a dash of holiday delight can head over to the Spirit Halloween website and purchase an abundance of spooky products all year.
• The retailer has a charity called Spirit of Children. In 2006, Spirit Halloween launched a program called Spirit of Children. Every October, the group brings the holiday spirit to children's hospitals throughout the United States and Canada. According to Spirit Halloween, the group is partnered with 147 hospitals to bring "the magic of Halloween" to children's hospitals and "make hospitals less scary for kids and their families." The company provides over $400k a year to fund this organization.
• Spirit Halloween doesn’t just sell Halloween items. Some customers might be surprised to learn that Spirit Halloween doesn't just limit itself to one holiday. Those looking to get apparel, decorations, and other novelty items can check out their available products for Thanksgiving, Christmas, and Easter. The company's choice to branch out and sell merchandise for more than just Halloween means that shoppers can find plenty of goods to meet their needs for most major holidays.
• Spirit Halloween was founded by Joe Marver in 1983. Before opening up his first Halloween shop in 1983, Joe Marver ran a clothing store. He noticed that a Halloween costume shop across the street was flourishing during the fall season despite his own struggle to make sales. The realization that Halloween items were in high demand during October gave him the idea to start selling his own holiday merchandise. The plan was a success, and the following year he expanded to a nearby mall and temporarily took over a second space for fall. According to The Seattle Times, Marver's second location brought in $100,000 from its sales in about one month. Eventually, this thriving seasonal shop led to the infamous brand fans and shoppers know today. "I didn't invent temporary sales," Marver told The Seattle Times. "But I feel like I invented temporary Halloween."
• The original store sold woman’s clothes. Originally called Spirit Women's Discount Apparel, Marver's first business sold women's clothing, according to Bloomberg, and its single location was in California, a far cry from Spirit Halloween's current ever-growing company.
• Spirit Halloween was purchased by Spencer’s gifts
• Though Joe Marver was responsible for starting Spirit Halloween, the store's ownership has changed since it first opened its doors in 1983 in Castro Valley, California (via Market Realist). The retailer's positive reception for selling all things Halloween naturally led to expansion, which had grown to 60 stores by 1999. That same year, the business was purchased from its founder by the well-known novelty franchise Spencer's Gifts. As a result, the seasonal company now has more than 1,400 seasonal shops throughout the United States and Canada. According to Forbes, in 2013, around half of Spencer's Gifts yearly earnings (approximately $250 million) came from Spirit Halloween. Additionally, and to no one’s surprise, around 90% of Spirit's online revenue comes in as the fall season approaches, even though the company's website is year-round. 
• The majority of Spirit Halloween’s business comes from last minute shoppers. Despite the retailer opening its doors in early August, Spirit Halloween customers don't come rushing in. In 2018, more than half of the location's business would happen within the last two weeks of October. 
• The Flagship Store is in Egg Harbor Township, NJ. As a special treat for the holiday season, the flagship location opened for the season on July 31, 2021, with a "special event," according to PR Newswire. The spooky season festivities included gift bags for the first 100 customers, "live music, food trucks, and a coffin full of surprises." Additionally, the opening had an early morning "ribbon-cutting ceremony" and special guests like the Egg Harbor Township mayor and social media influencers.  
• Their teams start looking for next year's locations right after Halloween. The beginning of November might mark the end of spooky season for some, but the work is just beginning for the Spirit Halloween team. According to Vox, in 2012, the retailer's senior director of real estate Frank Pacera stated during a podcast interview, "The minute our door is closed, we are — or actually, before our doors close — we are prepping for the next season." In terms of staying one step ahead, Spirit Halloween's employees are definitely going the extra mile spending almost the entire year prepping for next Halloween
• First, workers begin by finding the perfect place to set up shop. The retailer's general measurements are considered to be anywhere from 7,000 to 10,000 square feet, though the company is willing to take smaller or bigger locations depending on the situation. Spirit Halloween's preference, if available, is to take over empty spaces near large businesses such as "Best Buy, Target, or Walmart." Next are arrangements with landlords, which typically take "months" to negotiate. The final step is getting the shop's seasonal employees ready to open with district managers attending "a week-long training meeting" in New Jersey. Soon after, Spirit Halloween pop-ups are open for business.
• Spirit Halloween took over NYC’s coveted Barney’s location in 2021. According to CNN Business, for 2021's spookiest season, one of Spirit Halloween's many retail stores will temporarily take over the space that housed the original Barney's department store in New York City. The department store, which sold luxury clothing, first opened its doors in 1923 and became a well-known American retail icon. Unfortunately, Barney's filed for bankruptcy in 2019, as CNN Business reported, before the high-end retailer officially closed its doors in 2020.

Forbes’ article “Spirit Halloween’s Scary-Good Strategy

• So first we’re going to dive into an article with the COO of Spirit Halloween to get a little insight on their business model. The purpose of the article is a little preachy, but there were some fun facts in there I thought we could all appreciate
• In this article the writer sits down with the COO Stephen Silverstein to discuss their business model & how they got to where they are & what sets them apart
• Each year, the business literally needs to re-find and rent temporary locations
•  They have to find and manage a temporary 15,000 person work force
• The COO shares 5 keys to success in their business model

1. Craft a rich, emotional experience

• They purposely come up with a rich, over the top experience instead of just being a “halloween store”. 
• Most stores have haunted houses incorporated in the store, and big, interactive decorations to make the consumers feel more emotionally connected with the store

1. Leverage Systems and Processes to do the impossible

• They are one of the only companies on the planet that literally builds their 1400+ stores each year
• Spirit Halloween relies on tightly engineered systems and processes to manage the incredible logistical complexities required to pull off each annual cycle
• Leaders design highly scalable processes for everything from color-coding display equipment to crafting system-wide training videos.

1. Get Great at Adapting

• Too often, companies grow stagnant and cling to what’s comfortable. The beauty of building from scratch each year is that Spirit Halloween gets the opportunity to reinvent, retool, and reengineer
• Each year, detailed feedback pours into headquarters so leaders can conduct the granddaddy of post-mortems.  They explore every functional area of the business, both what went right and what went wrong.  The result, according to Silvera, is a “list as long as my arm” of items to change and adapt as they head into the next season.

1. Harness Courage and Creativity

•  A blunder in a normal retail environment could impact results for a month or two, but with only a single selling season each year, the stakes are incredibly high for Spirit Halloween.
• While many tighten up in the face of such risk, these leaders realize the risk of standing still and clinging to the past is far greater.  Accordingly, they challenge their teams to take responsible risks and push the creative boundaries.

1. Pursue Passion and Impact

• Spirit Halloween launched Spirit of Children, a non-profit organization that helps sick kids in hospitals.  Since inception, they’ve raised over $16 million and contribute to over 100 hospitals.
• In your organization, you can only fire up people to a certain degree with material rewards.  Having a purpose greater than your balance sheet is the rocket fuel that motivates peak performance.

Indeed Forum for Spirit Halloween Employees

• So the point of this forum, was basically that someone asked what do Spirit Halloween employees do after the season is over, employment wise. So we’re just going to review a few answers to bring light to the employment situation:
  • Most people either had another job they worked along with the seasonal position at Spirit, or they had another seasonal position lined up for winter. And then some people started looking for another position elsewhere towards the mid part of October. The great thing is the experience you gain. You could go into sales, cashiering, merchandising, a stocker, key holder or even loss prevention position.
  • After Halloween, we close up the store then we part ways and maybe get call backs next season.
  • Many people take job transfers over to Spirit Halloween's sister company, Spencers, which is year round so no need to worry about what season it is.
    
    
    

Conclusions on Data (our opinion on what data says)

• So basically Spirit Hal.
•  loween is owned by Spencer’s and that answered all of our questions
• We stan unique business model though so peace & love to Spirit Halloween lovers / employees
• They do really have the best decorations (as noted by Noreen’s recent experience) so makes sense they’re so successful