Retailers gathering for Halloween revenue

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Zeezo’s costume shop owners Mark and Jessica Modeer (center), their daughter Lillian (on lap) and Zeezo's employees are expecting a strong Halloween season. The National Retail Federation expects spending to exceed $6.8 billion.

Ghosts, witches and zombies are creeping into vacant retail spaces to take full advantage of the Halloween selling season.

Halloween is the nation’s second-biggest shopping holiday next to Christmas and is expected to rake in more than $6.8 billion in revenue this year, according to the National Retail Federation.

Six temporary Halloween shops popped up around the city last year.

“This year, we have those same six,” said Colorado Springs Sales Tax Manager Karen Garcia. “And we have applications for two more.”

Existing stores that file for initial permits can come back and apply for additional stores and that there is a chance the city could end up with more than eight stores this year.

Mark Modeer who owns Zeezo’s, a year-round downtown costume and magic shop, said Halloween typically accounts for 40 percent of his annual revenue.

He decided to go bigger than ever this year and rented out an empty space adjacent to the shop on Tejon Street for an overstock and discount costume outlet.

“If you ask me right now, just before Halloween, I want it to be huge,” he said. “I want that to be 60 percent this year. Of course, the rest of the year, for long-term business health, I want that 40 percent.”

Using the empty space was a “no-brainer,” he said. The existing shop is packed with new costumes and merchandise and new boxes of inventory arriving daily. The basement, which stretches beyond the front threshold of the store and under the sidewalk on Tejon Street, is stuffed with furry disembodied bunny heads, Darth Vader masks, pirate outfits, Santa Clause beards and puffy animal torsos. Most of it is rental costume inventory.

The additional space is full of items Modeer couldn’t sell.

“I have duck noses for 25 cents,” he said. “You want one? They were $5.”

While a sweater can still find a home in April, it’s a bit harder for duck noses in November, Modeer said. So he’s bringing out the duck noses and more in his first ever overflow shop, taking advantage of today’s weak retail real estate market to temporarily expand.

He’s not the only one taking advantage of cheap real estate. Halloween specialty shops have been popping up in the area for the last five or six years.

Lori Ondrick, a retail and investment specialist with Grubb & Ellis, said property owners are usually really open to renting temporary space to Halloween shops. Even those deeply discounted rents are welcome and it gives the property owner a few months of reprieve from paying the utilities.

It’s extremely unlikely a space would rent to a long-term tenant in the fall as most retailers are gearing up for the holidays, Ondrick said.

The country’s first Halloween City popped up in the Midwest in 1977, said company spokesman Don Rose. Halloween City is an offshoot of Party City.

“We’ve been in Colorado Springs at least the last several years,” Rose said. “We study the demographics of an area and the surrounding areas before we go into a market.”

He would not discuss revenue, but said the market was healthy enough to justify another year here.

The store went into the same space at the Citadel Crossing shopping center it had last year. It was, at one time, a Burlington Coat Factory.

The location has changed ownership, but the rent remained about even with last year, said Lauren Bottonari, an associate with SRS Real Estate in Denver who helped Halloween City find its spaces.

“We usually take the biggest space they have available if there is a lot of vacancy in a center,” Bottonali said.

The back and one side of the store in the Citadel Crossing are barricaded off to make the store seem smaller and more intimate. It also adds a spookiness, being able to see that there is dark empty space just beyond the vampire capes and witch hats on the back display. But that’s not why they take the big spaces, Bottonari said.

Big inside usually means big outside, which means there is more room for big splashy signs that will draw the eyes of mall and Target shoppers in nearby shopping centers.

“We stay away from the neighborhood centers,” Bottonali said. “We like the power centers. We find spaces that have more visibility.”

She said that Colorado Springs is a hard market. Most of the cheap available space is in nearly empty strip malls and dying neighborhood centers. There aren’t a lot of good premium spots. It’s a lot harder here than it is in Denver, she said.

That’s why Halloween City in Citadel Crossing ended up so close to competitor Spirit Halloween, which went into the old Circuit City building next to Target and just south of the Citadel mall on Academy. The two are practically neighbors.

Spirit has four stores in Colorado Springs this year, said regional manager Joann Creekmore. The newest is in the old Borders store at the Broadmoor Towne Center.

She said business is already starting to pick up at all four locations. She’s selling out of the store’s animated spiders.

“It jumps out and spooks people,” she said. “It’s fun.”

She said Smurfs are big for families this year, Marvel costumes are popular for boys, fairies for girls and gorillas for adults.

Creekmore’s four shops employ about 100 temporary workers, she said.

“And they all get to watch this empty box space turn into an amazing Halloween experience,” she said. “It’s great because the employees are able to step back and see what they’ve accomplished.”