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What can a center manager do with vacant space? Think about a temporary lease for Halloween, Christmas and other holidays.

Even now, SPIRIT Halloween Superstores is brewing preparations for Halloween 2002. If you've never heard of SPIRIT, then you've blinked between August and November since 1984.

Last year, SPIRIT, a wholly owned subsidiary of Spencer Gifts Inc. of Egg Harbor Township, N.J., conjured up 144 new stores on Aug. 15, 2001. Ranging from 4,500 sq. ft. to 50,000 sq. ft., the stores operated under three-month leases through Nov. 15. On Nov. 16, they vanished.

According to Michael Olsen, a Seattle-based associate broker with Staubach Real Estate Services of Addison, Texas, retailers generate the lion's share of its annual revenues, approximately 65%, during the November-December holiday shopping season, but Halloween is now the second largest shopping season of the year. “This year was a particularly big year for SPIRIT,” Olsen says. “We put them in 30 locations up and down the western coast.”

Other brokers placed 114 more SPIRIT stores in community centers, and, for the first time, malls.

How much rent will SPIRIT pay? “The company bases its rent offers on a percentage of the business it expects from each location,” Olsen says. “Typically that ends up being less than the asking rent.”

The specialty retailer operates highly designed, expertly merchandised stores offering approximately 3,000 Halloween SKUs. “SPIRIT sells everything you need to decorate yourself or your house for Halloween,” says Olsen. “Merchandise includes costumes, props, party supplies — everything but candy, which they leave to conventional retailers.”

Because SPIRIT operates an efficient leasing machine it is possible for it to open 144 stores of different sizes and shapes on the same day every year, year in and year out. By January, the company begins searching for next year's locations, sorting through vacant space in centers across the country.

The store designs are basic and include pegboard wall fixtures and H-frame floor fixtures. They expect few tenant improvements but will occasionally pay for an enhancement if the space is particularly good. On Aug. 15, move-in day, the fixtures arrive at each store. Merchandise shows up shortly thereafter. Meanwhile, managers are hiring temporary staff.

“With a three month lease, SPIRIT generally has to take what it can get,” Olsen says. “But there are some requirements. The store must be in operating order. You have to be able to lock the doors, turn on the lights, and heat and air-condition the space. You can't sell anything in 80-degree Los Angeles weather without air-conditioning.”

On Sept. 1, SPIRIT Halloween Superstores open across the country. Customers jam the stores until Nov. 1, when the stores close and its interiors get torn down.

The result is business for SPIRIT and tenants for empty spaces — tenants that help maintain and perhaps even build traffic while introducing customers to retailers preparing for the primary holiday selling season that follows.

Stores of Dreams

Schostak Brothers & Co., a Southfield, Mich.-based shopping center owner with 50 properties, turned its vacant space into a community service during the second half of 2001, through a unique program called Stores of Dreams. The space dedicated to the program in each mall ranged from 1,200 sq. ft. to 1,500 sq. ft.

Despite the relatively high occupancy rates in its centers, Schostak donated space in five malls for five months, from September through December. The malls included Point Plaza Mall in Grosse Pointe, Mich.; Laurel Park Place in Livonia, Mich.; Macomb Mall in Roseville, Mich.; Rolling Acres Mall in Akron, Ohio; and Fair Oaks Mall in Columbus, Ind.

The company selected five non-profit organizations to occupy the allotted space over the five-month period. The Literacy Council of Michigan received the first nod and set up stores in each of the five malls during August. In September, The Capuchin Soup Kitchen, a food bank, replaced the Literacy Council in the five locations. The Michigan Humane Society moved into each mall for October. St. Vincent DePaul, an organization that distributes clothing to the poor, took its turn in November. Lastly, the Covenant House, a halfway house for troubled teens operated the spaces during December.

Schostak picked up the space costs and persuaded the local NBC affiliate in Detroit to promote the stores on the air during newscasts. The organizations sold merchandise to raise money, and their presence in the mall helped them generate public awareness of their missions.

According to Cindy Ciura, vice president for corporate marketing with Schostak, such a program creates some business issues for mall management. “You have to make sure the mall can handle the logistics of a charity,” Ciura says. “For example, I can't tell you how many tractor trailers of clothing were donated. You have to have a place to put the clothing and to get the trucks in and out.

“In addition, while we can offer the space and help make the programs succeed, the charities must staff the stores with their people. One of our requirements was that the stores remain open during mall hours. That meant each charity had to find between 25 and 50 volunteers to rotate through shifts.”

The charities found plenty of people to help. They also attracted plenty of people to the malls. While Ciura says she isn't sure about the future of this idea, she notes that one of the charities involved has been investigating the possibility of taking a permanent lease.

Screams and dreams: two specialty-leasing angles for retailers with vacant space to consider, particularly as the retailers' holiday-generated revenue continues to climb.

Michael Fickes is a Baltimore-based writer.

A recycling bin for carts & kiosks

A year ago, a mall manager phoned Barbara Evensizer, president of The Carriage Works, a major manufacturer of retailing carts and kiosks in Klamath Falls, Ore. The question posed was, might Evensizer want to buy some old carts?

At first Evensizer balked, but the price was right, and she decided to make a deal, paying between $500 and $2,500 per unit. She sent the units to be refurbished, and promoted them for sale on the company's web site:

As it turns out, many retailers want used carts, which sell for dramatically low prices. “Prices for used carts range from $1,900 to $5,800,” Evensizer says. “New carts can sell for as much as $15,000.”

The used cart and kiosk business is booming at The Carriage Works. Evensizer estimates the business ballooned to 350 units per year, which compares favorably to sales of about 700 new units per year.
— Michael Fickes

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