Inside a cavernous North Mankato warehouse, thousands of get-ups for wannabe witches and dinosaurs, Hogwarts and Spider-Men, hippies and Ravishing Red Riding Hoods are tucked into cardboard boxes stacked nearly to the ceiling.
A woman dressed as an ostrich zooms around on a scooter-powered cart, piling it with costumes and spooky decor. Other workers look like they’re performing a choreographed dance as they rapidly reach into bins and pack sequined pumpkins or superhero capes into shipping bags and boxes as pop music blares.
In a few days, it will be witching hour: 5 p.m. on Oct. 30, the very last possible moment to place an order on HalloweenCostumes.com and receive it in time for the holiday.
If you’ve ever bought or rented a Halloween costume online, there’s a good chance it came from here.
But this large, globally reaching company tucked into a nondescript, southwest Minnesota warehouse park has nothing to do with Jeff Bezos. It’s owned and operated by four siblings who grew up nearby, with a mom who sewed all their Halloween costumes.
It’s been nearly 30 years since the Fallenstein family — siblings Tom, Heather, Lisa and Julie, who range in age from late 30s to late 40s, along with their parents, Jim and Jenice — got into the costume business.
Of the 10,000 styles the company sells today, the one most suited to the Fallensteins would probably be Hercules, for all the effort it’s taken to grow what started as a garage-based rental shop into one of the country’s largest online costume retailers.
Yet despite the company’s Amazonesque scale and sophistication (they employ 2,000 seasonal workers and have shipped millions of orders), it still has many hallmarks of an old-fashioned family business. When customers couldn’t find obscure costumes, the family decided to design them. When a teen left a $10 bill in the pants pocket of a rented prom tuxedo, the returns department mailed it back.
Part-timer Jenice Fallenstein, who is introduced even in professional contexts as “Mom,” can’t help but perform quality control as she walks the aisles, pulling an errant sailor suit from a box of Minecraft monsters.
“If a return comes in and it’s missing a button, she’ll fix the button so it can be sellable again,” explained Tom Fallenstein, the youngest of the siblings and CEO of the company, Fun.com.
The average American spends $86 on Halloween merchandise, making it a $9 billion-a-year industry.
The holiday wasn’t nearly such big business four decades ago, when the Fallenstein kids were growing up in Mankato. Commercial costumes were little more than flimsy Storm Trooper or Strawberry Shortcake smocks with brittle plastic masks. But Jenice was an excellent seamstress with the ability to transform her children into elaborate clowns, bunnies, toy soldiers and Super Marios.
“We always won every Halloween contest,” said Tom.
While Mom took care of costumes, Dad focused on decor.
“Our whole entire lawn was a graveyard,” Tom said. “There were witches with dry ice,” added Julie Fallenstein, the eldest. “And spider webs,” chimed in sister Lisa Holthaus.
On Halloween night, Dad would slip into the scarecrow costume that had been hanging out front all month and bring it to life, terrifying all the trick-or-treaters. “We would sit in the garage and watch and just laugh at people running down the driveway,” sister Heather Madison recalled.
When Julie and Lisa attended college in Mankato in the early 1990s, they got the idea to try to rent out the family’s large collection of costumes. Over the next several years, the rental business, called Costumes Galore, was so popular that they expanded their inventory and moved operations to their parents’ house.
In 2001, Tom, who was studying computer science at Minnesota State University, Mankato, wanted to get experience in e-commerce. Since flapper costumes rented well, and the URL flappercostumes.com was available, he bought $5,000 worth of 1920s-style sequined dresses, used his sisters as photography models, and sold the costumes out of his bedroom closet.
By the time Tom graduated in 2004, he’d added other costumes and was grossing $40,000 a year. He decided to pursue the business full time, based at his parents’ house, where operations soon subsumed residential living. The living room and hallways were stacked with shipping boxes. The kitchen: boxes.
Not that there was time for cooking or eating.
In the weeks before Halloween, Tom begged his sisters to assist him before and after their full-time jobs. In the final days, the family was pulling all-nighters.
“I’m calling up my friends at 2 a.m. after bar close to be like, ‘Hey can you come help me pack?’ ” Tom recalled. “We had to unplug the phones.”
“If you picked up the phone to call somebody,” added Heather, “there’d be a customer on the line.”
When the season was over, they’d done $250,000 worth of sales. The sisters quit their other jobs and joined their brother in renting and selling costumes full-time.
Big risk, bigger reward
The Fallenstein parents, who owned and operated a garbage and recycling business, had taught their kids the value of hard work and efficient systems.
For example: Labor Days were spent cleaning their parents’ warehouse. At an early age, the siblings were tasked with billing customers, and they quickly learned to fan several envelopes out on a table and wet them with a sponge, to seal them more expediently.
Applying those skills to the costume business, the siblings automated the costume company’s websites and inventory management to increase capacity, and moved operations into a commercial building downtown.
By 2008, the siblings knew the next stage of growth hinged on acquiring a broad, overarching domain that would drive more traffic and encourage customers to return. They crunched a few numbers and offered the owner of HalloweenCostumes.com $1 million in cash.
“Our parents were like, ‘We’re going to do what?’ ” Lisa said.
That year, sales hit $10 million.
Tom credits the company’s exponential growth to his family’s dedication in those early years.
“We’d have 80 hours in by Wednesday,” Julie said.
“No employee would commit to that,” added Tom.
Fortunately, the Fallensteins have had plenty of practice turning a job that needs to get done into family bonding.
“We make it fun,” Lisa explained of their many years of working together. “It’s not like it’s not stressful, but when we’re out there together at 4 a.m. and we’re laughing … ”
“And having competitions,” Heather interjected. “Like, ‘How many can you pack in an hour?’ ”
Ironically, when the seasonal crush subsides and the siblings dress up for their own Halloween revelry, including the company’s annual party, they usually create their own outfits.
“When you own a Halloween company, you can’t show up with the same costume as three other people,” Tom said.
Rachel Hutton • 612-673-4569