Nowhere is Halloween more revered than at Spirit Halloween, the largest seasonal Halloween retailer in the country. Each year around Labor Day, these stores pop up in shopping centers and malls to help trick-or-treaters with their costumed revelry and provide home décor to trick out Halloween houses. For the sake of one special day, Spirit Halloween hires 12,000 employees to man over 700 stores.
Spirit Halloween is owned by the iconic Spencer Gifts, an NRF member with over 600 stores. Spencer is unique – they’ve managed to find the “secret sauce” to fun at the mall, and they’re Halloween fanatics.
At an NRF Networking Nights dinner in Philadelphia recently, I had the pleasure of chatting with Steven Silverstein, the CEO of Spencer Gifts and the driving force behind Spirit Halloween’s expansion and national presence. I reached out to him later to get more information about their “Spirit of Children” program, how Spencer Gifts has managed to survive and thrive through several tight credit environments, and what they think the holiday season will bring for them over the months ahead. Read on:
Last year, Spencer Gifts raised over $625,000 to fund child-life programs in hospitals all over the US through your “Spirit of Children” program. How did this program start?
It began in 2006 as a small way to thank local communities who supported our Spirit stores. We simply hosted Halloween parties in 11 hospitals, with events hosted by volunteer Spirit employees. Pediatric wards were treated to pumpkin painting, games, and costumes. The next year we added collecting donations at our store registers to further support the child life department in those hospitals and expanded to over 30 hospitals. It has been an astonishing success.
Today, we’ve built a strong partnership between our customers and our local hospital partners to support this worthy initiative, bringing Halloween to kids who may not otherwise have a chance to celebrate. Now we host our “Spirit of Children” parties at over 50 hospitals and we are raising money for more than 70 nationwide. This year we’re hoping to raise $1 million to support these children. This is where you find the “heart” of our company.
You’ve recently advocated moving Halloween to the last Saturday in October – or, as you call it, “HalloWeekend.” Why?
Halloween gets lost when it falls during the week. Trick-or-treating in the dark, on a school night, has its problems for safety and homework. It’s also better for our industry and the economy to have Halloween on Saturday – revenues have ticked up by as much as 30% when the holiday falls on a weekend versus a weekday. And we’ve moved holidays before – I believe it was Franklin Delano Roosevelt who decided to make Thanksgiving the fourth Thursday of November, at the request of the retail industry. Even though the states rebelled at first, eventually the holiday was changed. Regarding “HalloWeekend,” obviously we’re having some fun here, but it does make sense from many perspectives.
How have consumers reacted to this idea?
For the most part, we’ve gotten a lot of support. The first reaction from most is to laugh, and then once they think about it, shrug and say, yeah that makes sense. Then again, there are others who think, it is dumb, self-serving and heretical. That’s okay, too. We’re not new to criticism at Spencer’s. If you’re dealing with new ideas, you’re bound to make waves. We think Halloween has just become overwhelmingly popular – a “national party” – and it’s all about the fun and fantasy of being whomever you want to be for a day. Why not give folks more time to enjoy it by moving it to the last Saturday in October?
You were previously the President of Linens ‘n Things, spending 11 years there up until 2003. You became CEO of Spencer in 2003, and you’ve also spent time with Bloomingdale’s as a merchandising VP. How did you get into the retail business?
By accident, of course, like so many others before me. My family was in the motel business in Daytona Beach, Florida, and every summer I’d work at the motel. This taught me a lot about the attitude you have to have to be a great retailer. When I graduated from college (Cornell University, Class of 1981), I was preparing for a career with Merrill Lynch. I set up a “practice” interview with a recruiter named David Kanal from Macy’s. He hit all my buttons – how store management is the equivalent of running your own business, how retailing is results-oriented…It was just one of those fateful moments in life where you really connect. Retailing from Day One got in my veins.
How did you move up to CEO?
Back then Macy’s had a 13-week training program. I joined 25 other recent college grads (we were called “The Training Squad”) on the same day in the classroom. One of those trainees is my closest friend in life to this day. We learned retail math, we learned about all parts of the organization. I was assigned as a “white flower” (designating me a department manager) at Roosevelt Field Mall in sportswear. I started out on the sales floor, which is the only way you really understand what’s happening in stores. I moved up from there, over the years. Today I still take two trips a month visiting stores.
You’re on the advisory council for the Jay H. Baker Retailing Initiative for the Wharton School of Business. What do you look for in new hires right out of college, and what advice do you have for today’s graduates?
A: I recently spoke about that very subject. We’re looking for people who can articulate why retailing is for them – people who are targeted, who’ve done their homework. With today’s economy, students can start before they graduate and find creative ways to figure out if retailing is a good fit. For instance, Spencer Gifts offers internships. Becoming an intern is a great way to get your foot in the door. Use your network—family, friends, schools. If all else fails, if you really want to be considered for a career at a particular organization, write a letter to the CEO of the company and express your interest. What’s the worst that can happen? The NRF Foundation is also a great place to research the industry.
Spencer Gifts has managed to secure funding in very creative ways over the years. In fact, you’ve “risen from the ashes” a couple of times in your history. Spencer has survived several acquisitions (MCA in 1964; Seagram’s/Universal Studios in 1995; Vivendi in 2001; GB Palladin in 2003, and most recently ACON Investments in 2007). What advice do you have for a CEO facing today’s tight credit market?
Leverage is a very dangerous thing. Be as conservative as possible. Be realistic. Do not get overextended. Make sure that you have enough room in your liquidity. You can’t be in a situation where the first air pocket you hit is going to cause a crisis. Retailers have enough leverage on their books already through their leases; debt is debt. I suspect that many retailers will be re-engineering their balance sheets in the coming months.
Are you concerned about what’s going on at CIT?
We’ve worked with CIT since 2007; they have continued to support us and we hope that they will find our way out of their current situation. However, we aren’t solely dependent on them and we can manage through it either way. It’s more of an issue for companies that aren’t financially viable.
In your opinion, what is the most powerful characteristic that a retail CEO should possess to survive this environment?
Employees are looking to their leaders to provide a clear way forward in these unprecedented economic times – to help them understand and navigate what they are doing and why they are doing it. It’s more important than ever to demonstrate leadership: communicate clearly what you expect and be open about your company’s performance. Even if it’s tough news, it has to be delivered, told in an honest and open fashion. You have to lead the way.
How do you think Spencer Gifts will do this season?
We’re hopeful that we’ll do better than NRF’s Halloween prediction, but we know that with seasonal businesses, we have to play it all the way through. Halloween falls on a Saturday this year, so there’s a lot of opportunity for consumers to participate in several different ways.
Spencer Gifts has recently announced a new concept, seasonal toy stores to be open from November to mid-January, called “ToyZam.” We’re planning to open 25 mall-based locations this season, taking advantage of the void in the retail toy market. The first one opened on October 16, as a matter of fact. So, happy Halloween rotates directly into happy holidays!