Halloween costume chain Spirit used the pop-up model and won

Spirit Halloween pop-up costume shops are ubiquitous and, in some cities, practically synonymous with the October costume holiday.

Although the specialty retailer has no permanent storefronts, it opens more than 1,500 temporary brick-and-mortar locations each fall before disappearing after the holidays end. The business model has proven so successful that the retailer is planning to open 10 Spirit Christmas Shops this year for the first time.

“The real estate market is very impacted, so it's available, plus it's a really unique holiday,” retail analyst Oliver Chen said of Halloween and the company's success as a purely seasonal retail chain.

But stocking, staffing and opening stores quickly, only to close them again months later, is no easy task.

“It’s hard to walk,” Chen said. “Part of their core competency is really the logistics and the difficult nature of opening a store and then closing it.”

Disappearing shop windows

Real estate availability and affordability are critical to the profitability and success of any pop-up retailer.

“Site selection is really important and part of the equation depends on the deals you can get,” Chen said.

Halloween is also a unique holiday. Cultural trends play a large role in what types of costumes are sold. Therefore, companies must be flexible and be able to implement a topic quickly.

“It is a holiday designed for change. They make bets to balance what might be popular. It's about finding the right formula when you're not necessarily sure what will go viral and why,” Chen explained.

The impermanence of Spirit is so visible that even Saturday Night Live mocked its impermanence in a recent skit.

“Since 1983, Spirit Halloween has helped our struggling communities by setting up shop in every vacant building in the country for six weeks and then getting back on their feet,” a Spirit employee, played by Heidi Gardner, says in the parody.

She also jokes that the company offers its workers six-week jobs.

Spirit did not immediately respond to CBS MoneyWatch's request for comment. In an interview with NBC Philadelphia, the company's CEO Steven Silverstein explained that operating Halloween stores is a year-round endeavor.

“We are only physically there for three months. A tremendous amount of planning, preparation and background work goes into the other nine months,” Silverstein told NBC Philadelphia.

The journey of the spirit through Christmas

Spirit is opening holiday-themed stores in Connecticut, New York, New Jersey, Massachusetts and Pennsylvania this year.

“Spirit Christmas is a new concept for us and we hope it resonates with our customers. Our goal is to create a festive shopping experience that captures the spirit of the season, similar to what we do for Halloween,” Spirit said in a statement to CBS News Philadelphia.

According to the National Retail Federation (NRF), it is expected to capture an even larger share of consumer income considering that winter holiday spending reached a record $964 billion in 2023, up 4% from 2022 corresponds. According to NRF data, Americans spent $12.2 billion on Halloween costumes and decorations in 2023.

“They expand their purpose to another seasonal moment,” Chen said of the holiday store experiment.