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A Dominant Specialty Retailer
by Beverly Dykes
At Halloween City, the second most important retail season of the year is their only business. The stores have been enticing customers with the sights and sounds of this unique holiday since 1977. During the course of its evolution, Halloween City has become a reputable retailer in the marketplace, and the fastest growing temporary retailer in the world. In 2012, the chain boasted operating over 400 stores in 23+ states. For 2013, it projects opening 500 temporary stores in 27 states. As a division of the Party City Retail Group, a successful national specialty retailer, the concept has formidable buying power and a significant edge over the competition. When combined with the company’s unparalleled merchandising abilities, this translates into increased traffic being generated for any location that Halloween City occupies.
How could anyone who is in the market for seasonal merchandise resist visiting a local destination store offering thousands of square feet of pure Halloween excitement? Halloween City stores take great pride in offering customers the best combination of value and selection, by stocking a complete selection of adult, children’s, toddler’s, baby’s and plus size costumes. The stores also sell all the accompanying detailed accessories (like jewelry, make-up, shoes, fangs, tattoos, chains, beards & mustaches, masks, wigs, etc.) to complete the look, as well as party goods and supplies, props and related decorations. Halloween City’s experienced team of specialists has been fully educated in the art of helping customers enjoy their visit and find just the right item or accessory that will make their Halloween special. Its broad assortment encompasses thousands of items to meet the needs of visitors of all ages, as well as meeting their budgets. Though many competing stores have cropped up in recent years in Halloween City’s various operating markets in an attempt to duplicate its success, few have as readily made their mark.
The company also takes pride in the appearance of the stores. Although only in operation from early September through October, there is typically behind-the-scenes work that takes place year-round to ensure the customer experience is the ultimate in destination shopping. The temporary tenant is adept at filling empty space in prime shopping center locations, as well as in high profile malls nationwide. The use allows an otherwise vacant space to earn cash, while at the same time generating increased traffic, which brings added life to the center.
In terms of being a desirable tenant, the stores are professionally merchandised, displayed and staffed to have maximum appeal for every member of the family and every demographic segment of the population. Halloween City employs a multi-tiered marketing program that focuses promotional efforts on promoting local stores in target market regions where the center co-tenants will benefit from the extra traffic generated by its presence. By targeting major markets throughout the U.S., the annual goal is to continually broaden its customer base. The company spends generously on advertising in order to drive traffic into the stores. Halloween City also utilizes state-of-the-art fixturing and a signage program that has the effect of making its temporary stores look permanent. The business generally operates from approximately late August to November first (corresponding to a lease term of August 1st through mid-November). It typically takes just two weeks to prepare a site for occupancy and another week at the tail end to dismantle and clean up, in order to leave the location in “broom clean” condition, with any fixed improvements left in place.
The added benefit with leasing to Halloween City is the potential for the site to become a subsequent Party City location after the season ends. Over the last three years, the chain has successfully converted over 40 temporary Halloween City sites to permanent Party City stores. When Halloween City administrators negotiate a short term lease to operate a store at a center, it is also “testing” the site for viability as a permanent Party City location. In either case, landlords agreeing to have Halloween City occupy dark, non-productive space are taking advantage of the opportunity to bring new life to the venue and add to their cash flow. The stores are all corporately owned and backed by sound financing through credit worthy Party City Holdings, Inc., which partners with some of the world’s largest and most established equity firms. With regard to Halloween City, the chain is adept at crafting short-tem leases that provide developers with the knowledge and security that includes a “kick-out” clause, in the event that a long-term, permanent tenant is found prior to the occupancy by Halloween City, but after a lease execution. The lease deal typically involves a four page, landlord friendly short term lease, with generous rent, utility coverage, a sign exhibit, aforementioned “kick out” clause, and the ability to possibly strike a temp to perm long term lease with national tenant Party City.
As long as it can obtain a valid occupancy permit, the concept is able to take buildings in as-is condition. Site selection efforts begin in February of each year, with lease negotiations taking place beginning in May/June, with all remaining leases being finalized as of early September. The site criteria for a Halloween City entails a minimum of 3,000 sq. ft. of space (ranging as high as 10,000 sq. ft.). The desired population is 100,000+ people within the general trade area (approx. 5 miles), reporting an average household income of $50,000+. The site must afford unobstructed visibility from the main thoroughfare. Ideal centers will feature such tenants as Target, Kohl’s, JCPenney, JoAnn’s, PetSmart, Petco and any of the TJX Brands as co-tenants. A minimum of 6-10 parking spaces is preferred, for every 1,000 sq. ft. of leased space. The company requires elevation signage that conforms to its spec sign package as well as requiring access to available pylon and monument panels.
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