Scare Tactics: How Pop-Up Stores Like Spirit Halloween Find Spots Now

“I just looked up Halloween stores online,” she said. “That’s how I found it.”

According to commercial real estate brokers, Spirit Halloween is the 800-pound gorilla of the very niche asset class called pop-up stores: retailers who open a storefront to catch seasonal demand while it’s there, and then disappear when demand goes away. (In fact, you could probably get an 800-pound gorilla suit, made of polyester, from Spirit Halloween.) Spirit Halloween is by far the biggest, but not the only one, in the pop-up category, which enables landlords to monetize some vacant space that would otherwise sit empty and produce zero revenue. 

Seasonal and holiday concepts in general are the strongest category in the overall pop-up retail  field, said Rob Ruzza, a CBRE (CBRE) vice president for specialty leasing. That field can include stores that pop up for promotions or in conjunction with major sports or entertainment events, or open briefly simply to test consumer demand for a product or service. 

Halloween costume stores come in first in seasonal pop-up dominance, followed in order by stores selling games and toys, holiday décor (including Christmas ornaments), meat and cheese gift sets, and chocolates. These pop-ups tend to be stable and unchanging year after year, he said. Other, usually nonseasonal retail categories using pop-ups include cosmetics, fashion, athleisure, home goods, jewelry and footwear.

Spirit Halloween is marking its 40th anniversary this year, according to the Egg Harbor, N.J., company’s logo. Spirit says it has more than 1,500 locations across North America, and calls itself the largest Halloween retailer in the U.S. The East Brunswick store will stay open until Nov. 2, though it says on a sign on the door that visitors can shop “till the dead of night” on its website, which is up year-round.

In addition to Spirit, which sells costumes and lawn decorations, such as a low-lying fog machine which you can feed with “fog juice,” there are also pop-ups that specialize in Christmas decorations and other items to help buyers get into a holiday mood — whatever holiday it is. 

Spirit Halloween would not comment for this story. When contacted weeks ahead of Halloween, a spokesperson said the company was too busy this time of year to say much of anything about how it finds locations.

Its website does obligingly say what their various locations were at one time. For example, the East Brunswick outlet is in a former Loehmanns, a dress seller that closed its physical stores in 2014 and its online outlet in 2018. Their store in Allentown, Penn., is in a former Stein Mart department store, and the one at 225 East 57th Street in Midtown Manhattan is a former Waterworks store.

Spirit Halloween and other seasonal pop-up stores do have a tendency to feed on dislocations in the retail world — and there have been plenty of those the past few years due to the e-commerce boom during the pandemic. 

These include the bankruptcy travails of traditional department store chains such as Toys R Us, Sears and Bed Bath & Beyond. Rite Aid as recently as early October announced a Chapter 11 restructuring that could close hundreds of its locations out of approximately 2,000 outlets.

Despite e-commerce’s rise before and throughout the pandemic, the national vacancy rate for retail space has never been lower at 4.8 percent, at least on record, according to commercial real estate firm CBRE. Retail landlords have found unprecedented demand for top-quality space, especially, where consumers want to go for entertainment reasons, brokers say. This particularly includes space that real estate investment trusts such as Simon Property Group control: regional malls and premium outlets.

With about 8.1 billion square feet of retail space that CBRE tracks across 69 U.S. markets, that translates into 389 million square feet that’s vacant.

“E-commerce has not eliminated the need for brick-and-mortar retail,” said Brandon Isner, head of Americas Retail Research for CBRE, in an email. “In fact, pop-up stores are finding it tougher to get good temp space, especially in the strong trade areas where they actually want to be.”

Companies looking for pop-up space have to look “toward the assets which are experiencing a rise in availability, such as Class B or C malls, or older community and strip centers,” Isner said.

Part of the reason for this space crunch has to do with a slowdown in retail construction nationally in the wake of the 2008 financial crisis. In more recent years, the pandemic was bad for building, with 2020, 2021 and 2022 setting new annual construction lows, a trend that should continue into this year, which “has allowed space fundamentals to solidify,” according to Isner.

This stabilization affects pop-up stores such as Spirit Halloween, which seek to capitalize on temporary demand and go into a form of hibernation when the demand isn’t there, more than it affects the “experimental” types that want to test for demand before committing long-term to a location.

“Some luxury retailers will do pop-up shops in higher-end department stores, as a way to build [a] brand as a physical presence,” said Isner.

But pop-ups like Spirit Halloween typically prefer to take over vacant retail spaces that can accommodate their large inventories. Storefronts left empty by retailers that e-commerce displaced are often prime sites. 

“They’ve been impacted by people shopping online more and more often,” said Pat Slagle, a vice president for retail brokerage at Colliers (CIGI). “It has an effect on bigger-box stores like Bed Bath & Beyond in regional power centers, which have everything [pop-ups] need to go into locations. They have water, they have sewer, they have bathrooms, they have power, they have frontage. [Pop-ups] can take advantage of these existing conditions and do what they need to do.”

The stores bring people in, Slagle said “and that’s always been the name of the game,” drawing in bodies that make a shopping area look more appealing than if it were bereft of people.

For example, Spirit Halloween sought to put a store in space left vacant at 620 Avenue of Americas, an RXR property along a stretch of old Beaux Arts stores once known as Ladies’ Mile in Manhattan’s Midtown South. The store was to be a 10,000-square-foot, 60-day sublease inside a 92,000-square-foot location left behind in the Bed Bath & Beyond closure. The deal reportedly fell through in September.

Not to worry, though. Chelsea residents can buy their pepperoni pizza costumes nearby at 605 Avenue of Americas, a former Walgreens drugstore, according to the Spirit Halloween website.

Seasonal pop-up stores are not always welcome, said Brad Mendelson, a Manhattan-based vice chairman with Colliers focusing on retail. They brand a shopping district as a “B” market, Mendelson said, and you generally won’t see them in high-end luxury markets like Fifth Avenue from St. Patrick’s Cathedral to Central Park, where Gucci and Hermes and Tiffany live.

“Very few landlords that I know that have available space want to put a pop-up in it,” he said. “That could change in January if the space is still available, because there will probably be no one renting those spaces. There’s just not a lot of activity that time of year. Larger landlords don’t want a pop-up because it discourages someone from looking at a building and saying, ‘I want to rent this long-term.’ ”