Big chains dominate the Halloween pop-up scene in LA | Crain's Los Angeles

Big chains dominate the Halloween pop-up scene in LA

  • The Halloween "Boo-tique" at Goodwill Southern California's flagship store at Fletcher Square (3150 N. San Fernando Road) in LA. | Photo courtesy of Goodwill Southern California

    The Halloween "Boo-tique" at Goodwill Southern California's flagship store at Fletcher Square (3150 N. San Fernando Road) in LA. | Photo courtesy of Goodwill Southern California

  • The pop-up Halloween industry in North America generates on average about $1 billion in revenue per year. | Photo courtesy of Goodwill Southern California

    The pop-up Halloween industry in North America generates on average about $1 billion in revenue per year. | Photo courtesy of Goodwill Southern California

When he joined the corporate team at Goodwill Southern California a decade ago, Ray Tellez said he was surprised to learn that the weeks leading up to Halloween are the company’s biggest revenue generating time of the year.

Tellez, vice president of retail operations for the southern California division of the nonprofit, said the company’s stores have hosted annual Halloween pop-up displays for as long as he’s worked at the nonprofit. But, he said, the footprint of the pop-up “Halloween Boo-tiques” has grown in recent years and so has the buy-in from Goodwill’s employees, ranging from its cashiers to its corporate executives, he said.

The annual in-store Halloween pop-up boutique takes place in every southern California Goodwill brick and mortar, which includes 80 stores across San Bernardino, Los Angeles and Riverside counties.

The season “is our biggest month of the year … we have 10 percent more sales than any other month, it’s more traffic, it’s more revenue, it’s our busiest month,” Tellez said. "We look at ourselves as being the experts in creating costumes.”

Goodwill isn’t the only player in the pop-up Halloween industry. Businesses run the gamut from national chains to independent retailers. The pop-up Halloween industry in North America generates on average about $1 billion in revenue per year, according to Christopher Scharff, a member of the Halloween Industry Association board of directors.

While Halloween pop-ups have been around for a decade, Scharff said their popularity is increasing and they’ve become a model for retail operations “in an internet-driven world.”

But, he said, the pop-up industry has become increasingly dominated by large chains, like the novelty and gag gift mall retailer, Spencer’s, which is the parent company of a national Halloween pop-up chain dubbed Spirit Halloween.

Party supply chain Party City also hosts annual in-store “Halloween City” pop-ups.

“With over 18 million residents, greater LA is a terrific market for our Halloween City pop-up store model,” Dan Sullivan, executive vice president and chief financial officer for Party City wrote in an emailed statement. “The diversity and expanse of this market is well served by the full combination of our permanent brick and mortar stores, online platform and pop-up store format, which allow us to meet all our customer’s chopping needs.” The company operates six pop-up Halloween City stores in the greater LA area.

Spirit Halloween, however, doesn’t have a permanent year-round location—aside from its online presence. The company employs over 30,000 people to operate more than 1,300 retail locations throughout North America, according to Erin Springer, the company’s public and media relations manager. The national chain includes about 19 locations in the LA market.

“We offer an extensive array of goods—from costumes to accessories to décor, which includes exclusive items unique to Spirit Halloween stores. We pride ourselves of the immersive shopping experience we provide for our customers,” Springer said.

Spirit’s brick and mortar locations open in mid-August and remain operational through the beginning of November. Locations, however, vary, Springer said.

“As the economy continues to improve, retailers are beginning to expand their portfolios and vacant spaces are beginning to backfill,” she said. “We do face challenges securing the best locations.” Springer added that the company’s real estate team works throughout the year to maintain good relationships with its landlords.

But Scharff said the LA market has seen an increasing number of retail vacancies, “which tends to support in October an increasing number of pop-up stores.” He said the demise of major sporting goods retailers like Sports Chalet and Sports Authority have also increased the supply of vacant retail locations for large Halloween pop-up operations like Spirit. And the national chains can also have a detrimental effect on smaller year-round brick and mortar shops, he said.

-“These pop up stores tend to open up near existing costume or party stores and therefore divert sales and torpedo the profitability of brick and mortar retailers that rely on Halloween to support their year round expenses,” Scharff said.

Spring said Spirit’s operations constitute a year-round business despite their brief brick and mortar retail season.

“While Halloween may end on October 31, for Spirit Halloween, we sell costumes, décor and props online throughout the year. We also begin researching retail locations, partners and trends for the next year immediately,” she added.

Springer said the business employs a team dedicated to researching costume trends.

Classic costumes—like witches, pirates and vampires—are reliable standbys for Spirit, but pop-culture and contemporary influences play a large role in determining what costumes the pop-up stores will sell each year.

“What is most important to Spirit is emerging ideas—this can range from the new hot movies to mermaids or aliens,” Springer said.

At Goodwill’s southern California stores, the preparation for the Halloween season begins in January, Tellez said. He said the company hosts a big meeting for its district and store managers and provides training on how to create costumes from donated goods and how to price those employee-made creations.

Scharff calls the pop-up Halloween industry “a mixed blessing.” The industry has become increasingly dominated by large chains, like Goodwill, Halloween City and Spirit Halloween stores, he said. But, Scharff added, Halloween pop-ups are still lucrative operations that generate higher revenues per square foot than any other seasonal pop-up stores. He said their success is a testament to the tenacity of the brick and mortar retail experience—at least when it comes to the seasonal retail industry.

October 16, 2017 - 5:01pm