Mankato-based Halloween Outfitter Looks to Bolster Workforce Ahead of Holiday Rush
Nothing stops Halloween, apparently. Not even a pandemic. For Tom Fallenstein, the weeks leading up to the spookiest time of the year are also the most important — and lucrative — time of the year. As president and CEO of Mankato-based HalloweenCostumes.com and Fun.com, he oversees one of the nation’s largest online costume retailers. During September and October, his company generates about 80 percent of its entire annual revenue, he says.
“During those last two weeks before Halloween, we do in a single day what we do in June,” he says. “We’re a completely different company come September and October.”
Despite the pandemic, Fallenstein is still expecting a big uptick in orders over the coming weeks. So much so that he’s willing to foot the bill for hotel stays for seasonal workers coming in from outside the Mankato area. He’ll also provide meal vouchers for workers.
If anything, this year could even be more lucrative than the past. In September, sales for HalloweenCostumes.com and Fun.com were up 15 percent year over year, Fallenstein says.
During September and October, the company’s 200,000-square-foot warehouse begins humming with activity and an influx of temporary workers. In the weeks leading up to Halloween, the company’s headcount grows from 180 to about 2,000. So far, the company has already brought in more than 500 temp workers, Fallenstein says. The hotel deal, formally announced on Tuesday, is already attracting more applications.
We check in with Fallenstein to learn how his seasonal business is adjusting to uncertain times.
TCB: How have you adjusted your operations due to Covid-19?
Fallenstein: When the pandemic hit in March, we sent all our office staff home and started figuring out how to work remotely. For our warehouse staff, we’ve added temperature checks for people entering the building. We’ve got facemask requirements. We’ve also got face shields for everyone. And there’s hand sanitizer everywhere. Plus, we’re doing extra cleaning. All the break rooms are set six-feet apart. We kind of had to rearrange a lot of the office and put up a whole bunch of plexiglass everywhere to separate packing stations in our warehouse.
The warehouse is pretty big, and we’ve got high ceilings, so there’s good airflow. But with some positions, it’s tough to not be near someone a little bit. We’ve got people working on different aisles, and they need to pass each other every once in a while. So, we’ve got to make sure people are safe. It’s a big initiative, with a lot of expenses around it.
Q | How have you been staying afloat over the last few months?
A | We did take advantage of a [Paycheck Protection Program] loan, so we didn’t have to furlough any of our permanent staff, even though sales were down 80 percent at the end of March, April, and May. Luckily, we’re starting to see things come back. And actually, September was up 15 percent over last year.
Q | I would not have expected that. Any idea why that might be?
A | I think people are a little more afraid to go to Party City or the pop-up stores like Spirit Halloween. Last year, Party City actually did 275 pop-up stores, and this year, they only did 25. So more people are shifting to online, and we’re the largest online player. We’re obviously getting a benefit just because of where the traffic is going.
Q | In the age of Amazon, why do you think people go to your website?
A | We make and manufacture about 30 percent of our inventory, so we do have a lot of unique products. We’ve got license agreements with a lot of the big studios. For instance, we’ve got the Karate Kid license, and everyone’s watching Cobra Kai on Netflix. We’re making that stuff exclusively. We’ve also got things like Back to the Future or Grease … I could name off 100 licenses we make and manufacture products for. So, for one, we just have a unique product selection. And two, we carry a lot more sizes and options than most places, and for sure any retail store. And of course, we actually do sell a lot of our product on Amazon, as well. So, some of those sales that someone might be buying on Amazon end up coming to us as well.
Q | Are any of the workplace changes affecting operations?
A | Our whole training and application process is different. In the past, we’d have people come in for big orientation groups, but clearly, we can’t do that anymore. So, it’s smaller groups of people, which does take a little bit more manpower. The temperature checks before do slow us down a little bit, but obviously, we’re doing everything we can to make sure we’re keeping everybody in the building safe.
Q | How many people do you have working on the floor at once?
A | Depending on the time of day, it could be a couple hundred in the warehouse. We’ve got 70 different picking aisles and 50 different packing stations. We’ve also got “order pickers” in the back getting products down. For the most part, though, you’re just within 1 or 2 people for most of the day.
Q | What does your company do for the rest of the year?
A | Though the bulk of our business is still Halloween stuff, we also do a lot of historical figures, which kids might use for book reports and stuff. All of those sales have still been happening outside the holiday. And we did see a weird spike in Easter Bunny costumes in spring. I think because everybody decided the Easter Bunny needed to come to their house. It’s kind of odd seeing how demand changes really quickly. … But normally, we’ll do a couple million dollars a month in the off-season.
Q | Aside from the workplace changes, is there anything else you’re doing differently this year? Any new major products rolling out?
A | Well, it’s kind of the opposite, actually. Halloween costumes are typically based on all the big movies that are coming out. But, due to Covid, we had to make some adjustments … The Wonder Woman movie gets pushed, and we have to cancel our Wonder Woman order. Ghostbusters gets pushed, so we reduce or cancel that. But, we have found an uptick in demand for all of this nostalgic stuff like Harry Potter and Scooby-Doo. It’s stuff people are clearly rewatching stuff on Netflix. We’re seeing a lot of nostalgic products sell, instead the new movie stuff.
Q | Any other thoughts on getting through a pandemic Halloween?
A | Halloween is on Saturday this year, and usually Saturday Halloweens are big for us. It’s often an all-day event, and the kids aren’t in school. But this year, obviously, it’s very different. Typically, this would be a really good year for a Halloween company, but I’m sure most will not agree.