What Dead Zone?

This story appears in the October 2009 issue of Entrepreneur. Subscribe »

We've all seen those costume megastores take over vacant buildings in September only to vanish like witches into the night a few days after Halloween. Where do they come from? Are they enchanted (or profitable)? And why are they always so freakin' big? We caught up with Joe Purifico, CEO and co-owner of Halloween Adventure, a Philadelphia-based chain of 150 seasonal costume superstores and 15 permanent shops. Now that Purifico is getting ready to spin off 50 franchises, he seemed the perfect person to explain the mysterious Halloween superstore phenomenon.

Is it really worth it to be open only two months a year? Can't people just get a Batman mask at Wal-Mart?
Halloween has really changed. It's not just a children's holiday--adults have parties, nightclubs have costume contests offering things like trips to Bermuda. And the manufacturers have changed too--gone are the days of the disposable plastic costume. We sell Broadway- and theatrical-quality costumes. Adults usually spend three or four times what they spend on their kids! Our goal is for each store to bring in $250,000 in revenue, though we've had some bring in upwards of $600,000 in those two months.

Why would a shopping center mess with a two-month lease?
Over the last decade, seasonal leasing in malls and major retail centers has become big-time business. Some of the world's biggest mall developers now draw 10 percent to 13 percent of their revenue from seasonal businesses, and Halloween holds a special place in their hearts: Except for Halloween shopping, September through Oct. 31 is a retail dead zone. Our stores bring a tremendous number of customers into the malls, and that has a great spinoff effect for the other tenants. It's a win/win for everybody, which is rare in the retail world.

Is there a reason the stores are always in massive, scary abandoned buildings?
We've gotten bigger over the years. In the beginning, our average store was 3,000 square feet, now it's 10,000. We may lease a 100,000-square-foot store but only use the front 10,000 square feet. If anyone can make more adults buy before Oct. 25, we could have smaller stores. But at the end, we need all that space in order to make our numbers and accommodate days with 100 people in line. If the store is too small, it becomes unshoppable, with people throwing half the product on the floor. Then you've got a nightmare on your hands.

Why are you franchising now, after 26 years in business?
A nice dream for us is 1,000 stores, but unless you have regional headquarter stores it's difficult to make sure people follow our procedures and mandates. We didn't start this 26 years ago to have a franchisee somewhere destroy it with an offensive display in their window. Being able to visit stores in a car ride rather than a plane ride gives you more physical control of the operation. We can't do that on our own--we need the right type of entrepreneurs and experienced retailers we can trust. To expand smartly we need to have a hand on the lid of the pot.

What's your favorite costume?
Maybe I'm showing my age, but every year, the ones that don't seem to lose steam are the "Wizard of Oz" costumes. Every year they're made better and better. But last year, I pulled out my old Austin Powers costume. That's another one that never goes out of style.

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Candy, Costumes and Cavities
From pumpkin farmers to confectioners to costume shops and beyond, Halloween is big business in the U.S.--generating nearly $6 billion annually in the retail sector alone. We dig into the numbers to show where the big money is spent, on everything from national charities to neighborhood dentists. --Jason Daley

36 million - Number of trick-or-treat-aged kids 5 to 13 in the U.S.¹

93% - Percentage of children who get to dress up and go door-to-door²

$5.77 billion - Total spent in 2008 on Halloween, including candy, parties and witches' brew³

$140 million - Money Trick-or-Treat for UNICEF has raised since 1950⁴

51.8 million - Number of adults who don their sexy nurse, pimp or pirate outfits on Halloween⁵

73.4% - Percentage of households that say they will dish out treats on Halloween (26.6%: Number of households just asking for a nasty trick)⁶

28% - Number of children, aged 2 to 5, who will get cavities⁷

1.1 billion - Pounds of pumpkins decorated, turned into pie and smashed in the U.S. each year⁸

1,8 Census Bureau; 2 National Confectioners Association; 3,5,6 National Retail Federation; 4 UNICEF USA; 7 Centers for Disease Control