Olivia Asher is a reporter at the New Herald Tribune covering breaking news for the Digital Trends Desk. Before joining the newsroom in 2022, she covered criminal justice issues at the Orlando Plain Dealer.
April 21 , 2024
Los Angeles — The iconic Halloween retailer Spirit Halloween has acquired the 99 Cents Stores chain after the discount store operator filed for Chapter 11 bankruptcy protection. Spirit Halloween plans to convert the 99 Cents Stores locations into year-round destinations for Halloween merchandise and supplies.
The $1.2 billion all-cash deal comes just months after 99 Cents Stores, which operated 390 stores across California, Texas, Arizona and Nevada, succumbed to the intense competition and economic pressures facing the discount retail sector. The acquisition will give Spirit Halloween a permanent physical footprint to sell its popular Halloween products beyond the traditional fall season.
"This is a transformative moment for our company as we expand our seasonal Halloween business into a year-round retail operation," said Steven Silverstein, CEO of Spirit Halloween. "The 99 Cents Stores locations provide the perfect foundation for us to bring the Spirit Halloween experience to customers whenever the Halloween spirit strikes.
"Under the terms of the acquisition, all 99 Cents Stores locations will be rebranded and converted to offer Spirit Halloween's full assortment of costumes, decor, animatronics and other Halloween merchandise. The stores will continue to sell the discount goods that 99 Cents Stores was known for, but with a prominent Halloween section occupying a significant portion of the retail space.
Spirit Halloween also plans to open new combination 99 Cents Stores/Spirit Halloween hybrid locations, blending the discount retail model with a year-round Halloween shopping destination.
"This is a bold and innovative move by Spirit Halloween to cement their position as the premier Halloween retailer in the country," said Neil Saunders, managing director of GlobalData Retail. "Acquiring an existing chain of physical stores gives them an immediate nationwide footprint to sell Halloween products 365 days a year.
"The acquisition comes as a surprise, as 99 Cents Stores had been struggling for years against intense competition from dollar store giants like Dollar General and Dollar Tree. The chain filed for Chapter 11 bankruptcy protection in February 2024, citing unsustainable debt levels and an inability to keep up with changing consumer preferences.
Spirit Halloween, which is owned by Sealed Air Corp's Diversey Holdings subsidiary, sees the 99 Cents Stores acquisition as a strategic opportunity to expand beyond its traditional pop-up store model. The company operates over 1,400 temporary Halloween locations across the U.S. and Canada each fall, but has long sought a way to maintain a year-round retail presence.
"This deal allows us to take the magic of Halloween and make it accessible to our customers whenever they want it," Silverstein said. "We're excited to transform these 99 Cents Stores locations into true Halloween wonderlands.
"The transaction, which is subject to regulatory approval, is expected to close by the end of the third quarter of 2024. Spirit Halloween says it will fund the acquisition through a combination of cash on hand and new debt financing.
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