In most remaining malls, there’s a Spencer’s. And it’s likely one of the most reliable tenants on the concourse.
The Irving Mall, a Texas shopping center that opened 53 years ago with wool carpeting and striped wallpaper, has seen better days.
The department store at the mall’s east entrance is a threadbare husk with a boarded-up door and faded gray lettering that once spelled out “Sears.” Many stores inside provide services like motorcycle safety training and income tax prep. Despite it being a weekday evening during the Christmas season, the crowds are sparse.
But around the corner from a shoe store, a familiar neon-lit sign pierces the gloom: Spencer’s.
A display on the front window advertises a doll of the rapper Snoop Dogg smoking a joint in a Santa outfit. Cheesy Christmas sweaters with slogans like “Merry Fucking Whatever” hang near the entrance. Rows of graphic t-shirts, featuring Korn, Mac Miller, and Aaliyah, adorn a side wall.
The other side features an assortment of retro, sexy, and gothic nic-nacs: an “Elvira, Mistress of the Dark” video collector’s set, lacey white lingerie, a miniature figurine of the “Scream” mask. And, of course, lava lamps.
“Lava lamps are iconic to us,” Steven Silverstein, CEO of Spencer’s, tells The Hustle. “There's something comforting about rolling wax blobs that somehow stand the test of time.”
You could say the same thing about the continued existence of Spencer’s. The irreverent gift shop has endured economic and cultural shifts that have hollowed out malls across the country, felling once-prominent stores like Brookstone, The Limited, Sam Goody, and countless others.
Spencer’s in one picture: random nic-nacs, over-the-top lingerie, and lava lamps in every possible color combination. (Mark Dent)
Spencer’s doesn’t share financial figures so it’s difficult to gauge its true health. But it also owns the Spirit Halloween brand and currently has more stores now than it did in the late 1980s, even though the number of malls has plummeted since then.
As they continue to struggle, Spencer’s wants to do more than be a rare popular destination at malls. It’s attempting to outlast them.
The birth of Spencer’s
The first generation of shoppers to get hooked on Spencer’s weren’t the mallrat slackers of Gen-X or even the forever youthful Baby Boomers. They were the selfless strivers of the Greatest Generation.
The company’s founder, Max Adler, served as an Air Force bomber in World War II and after being shot down over Hungary was imprisoned by the Nazis. Back in the US, he anticipated a postwar economic boom and sought funding for the ultimate discretionary spending vehicle: a gift shop.
Investors weren’t convinced, however, so Adler started his business solo in 1947, selling eight novelty gifts through a mail-order catalog because he couldn’t afford brick-and-mortar. He chose the name Spencer Gifts (which is now known as Spencer’s) because it “sounded good.”
For the first three years, Adler’s catalog earned less than $300k in sales. But by the late 1950s, Spencer’s had established itself as a mainstay — the Sears catalog’s cool younger brother. In 1958, the company mailed 12m catalogs, enough for about one of every four American households.
The catalogs featured 2k items — stuff like singing teacups, stuffed dog radios, expandable bookshelves, and mattress fresheners. They cost anywhere from 29 cents to $300, and the company notched sales of $7.5m (~$83m in today’s money).
A 1961 Spencer’s catalog. (Flickr via neshachan)
Most items were packaged at a 70k square-foot New Jersey warehouse — except for the live animals. Spencer’s sold a burro, imported from Mexico at a cost of $85 for a young male and $180 for a female foal. They sold several every day in the 1950s, Adler claimed.
In 1963, Spencer’s opened its first store at the Cherry Hill Mall in New Jersey, not far from the company’s headquarters. Its success prompted interest from the Music Corporation of America (MCA), which agreed to purchase Spencer’s from Adler in 1967 and took it from having 30 stores and $17m in sales (~$81m today) to around 550 stores and $300m (~$800m) in annual revenues in the late 1980s.
Spencer’s was later operated by Vivendi Universal and is now privately owned after a buyout led by a private equity firm. (The catalog was discontinued in 1990.) The store count has been reported as high as 700 in the early 2000s, and the most recent estimate Spencer’s provided for its annual revenues, combined with Spirit Halloween, was $500m in 2006.
Olivia Heller/The Hustle
Top sellers these days include the Christmas sweaters and rock band t-shirts. Silverstein, the company’s CEO, says that nostalgia has always been a theme behind its successful merchandise.
But the “back of Spencer’s” has perhaps most helped the store cultivate an enduring mystique.
Just past the lava lamps at the store in the Irving Mall, as in most stores, X-rated items abound: remote control strap-on dildos, gummy penises, penis lollipops. They’ve gotten Spencer’s into trouble over the years: South Dakota police once accused a store of operating an unlicensed adult-oriented business and seized 2k items.
Now, teenagers post TikToks and YouTube videos of their journeys to the back of Spencer’s. “Apparently those who go in never make it out,” joked one teen whose video has been viewed millions of times.
“There’s a coming of age story that’s part of [Spencer’s],” Silverstein says. It symbolizes that “time when you’ve arrived, and you can go to Spencer’s by yourself, without your parents.”
That reputation has made Spencer’s “a preferred choice” for malls according to Silverstein, giving it agreeable terms when it secures leases with mall ownership. But those relationships only work under a specific condition: The mall has to exist.
The American mall and Spencer’s: A symbiotic relationship
In 1982, decorated CBS News reporter Charles Kuralt rode an escalator to the top level of a Midwestern shopping center.
“Twenty-five years ago, they weren’t here. Today they’re everywhere,” Kuralt told the camera in a pitch-perfect newsman cadence. “What used to be farms or woods or country crossroads have become malls. They ring every city in the country in great concentric circles.”
He was at Oak Park Mall in Overland Park, Kan., which had a Gap, Radio Shack, a Waldenbooks, and, of course, a Spencer’s. But he could’ve been just about anywhere. At least 2k malls (defined as an enclosed shopping center with at least two anchor department stores), perhaps as many as 3k, existed in the 1980s, according to Nick Egelanian, founder of SiteWorks, a retail and mixed-use development consulting firm.
People visited them multiple times per week. As one teenager told Kuralt, “I spend more time at the mall than I do at my house.”
The Mall of America in 1992. (Bill Pugliano/Getty Images)
Yet even in this era of peak mall culture most of them had already entered terminal economic decline.
Until the 1960s, state-based fair trade laws largely barred retailers from selling below a minimum retail resale price set by manufacturers. But a decision in the 1960 Supreme Court case United States v. Parke, Davis & Co. helped quash those regulations, making it easier for retailers to offer sales and discounts, unencumbered by manufacturers.
Kmart opened its first store in 1962. Sam Walton opened his first official Walmart the same year.
“The genie was out of the bottle,” Egelanian says.
Department stores had previously sold almost everything: electronics, home goods, cosmetics. (When the Irving Mall’s Sears opened, it had an auto mechanic shop.) But the discount big box stores offered similar merchandise, lower prices, and a more convenient experience. The department stores couldn’t win.
Olivia Heller/The Hustle
Because most malls relied on these anchor tenants to draw customers, the rise of big box stores as a replacement for the department stores meant the malls — and the specialty retailers inside them — faced financial problems of their own.
“The model was none of the [specialty] retailers in there had enough drawing power on their own,” Egelanian says. “They relied on department stores to bring traffic.”
Egelanian estimates there are ~600-700 indoor malls left in the US, a decline of nearly 70% since the 1980s.
Olivia Heller/The Hustle
In addition to the growing irrelevance of department stores, so-called “category killers” like Best Buy, Barnes & Noble, and Home Depot also decimated specialty stores inside of malls.
At Oak Park Mall, just five of more than 100 specialty stores inside the mall in 1980 survive today, despite the mall outperforming its peers and holding onto anchors like Nordstrom, Macy’s, and JCPenney. Even since the early 2010s, nearly two-thirds of Oak Park’s specialty stores have turned over.
One reason why Spencer’s and other teen standbys like Hot Topic and Claire’s have lasted, Egelanian says, is that, in combination with the mall, they’re selling an experience for young people. It’s hard to develop a standalone category killer that does the same.
Still, every time a mall shuts down, there’s one fewer opportunity for a Spencer’s. At least six malls that closed this year had a Spencer’s that moved out.
“They can’t beat a trend,” Egelanian says, “that’s bigger than them.”
Staying alive
Not every mall is dying. The retail research firm Coresight found that, last year, traffic at malls was up above 2019 levels.
“It's tempting to focus on the doom and gloom, right?” says John Mercer, head of global research for Coresight. “And it's much more dramatic to be talking about mall closures, store closures, but that is only part of the story.”
The problem for Spencer’s is that high-end malls with affluent customers are having the most success and are likely to survive the longest. Those shopping centers lease to premium restaurants and retailers like Tiffany & Co. and Prada at prices far higher than stores pay at traditional malls. Some don’t want stores like Spencer’s.
“Even if they let you in and you paid the rent, you’re not going to do the volume because your customers aren’t there,” Egelanian says. “That's the dilemma for these guys because the mall was a perfect mouse trap for them.”
Olivia Heller/The Hustle
Although Silverstein believes malls’ struggles are overhyped, he didn’t downplay their importance to Spencer’s. Online sales comprise a minority of revenues for Spencer’s, and he says the true Spencer’s experience involves walking through the store.
“I often say we don't sell anything anybody needs. We only sell things people have to have, and that requires inspiration. And inspiration really happens most in the store environment.”
Spencer’s has begun to test non-mall stores in recent years and now has roughly 85 standalone stores. Silverstein wouldn’t say much about their success rate or whether efficiencies and relationships with sister brand Spirit Halloween have helped. But Spirit Halloween has thrived by finding cheap, vacant spaces, which is what Spencer’s has attempted.
Just last month, in fact, a standalone Spencer’s opened in Logan, Utah — across the street from a mall that closed earlier this year. The future of malls may be dark, but Spencer’s sees a lava light at the end of the tunnel.
