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"The good [retailers] are aggressively trying to capture the business from those who are scaling back," said Arnold Menis, sales manager, Rubies Costume Co. He estimates that the adult portion of the business will be the hardest hit, likely running flat or decreasing up to 5%. To counter this, companies such as Rubies and Disguise Inc., the two largest suppliers to the national chains, are developing extended accessories lines and special merchandising initiatives for added sales.Look for retailers to display Halloween wares in more specialized boutique-like departments, according to Jeff Coppens, director of marketing and product development for Disguise Inc. By displaying accessories along with costumes, retailers can appeal not just to kids but adults as well. "This merchandising is going to be important," he said. "Costumes are selling that have more styling to them. Price is important, but not the determining factor. The smart retailers are offering more to their customers."

While price may be critical in attracting these holiday shoppers, it is often easier to capitalize on impulse buys and add-on purchases to build total sales. Target, for example, capitalized on the category last year with multiple aisles of costumes and accessories, makeup, candy, home decor and items that appealed both to kids and adults--all merchandised together in a cohesive manner. Retailers too often force the customer to walk the store looking for different Halloween products.Adult Halloween purchases have done much to grow this business. According to American Express, 28% of adults planned to dress up last year. NRF reports that more than half of U.S. workers are allowed to observe Halloween in the workplace, and 39% say they would consider wearing a costume to work.

THE ORANGE Halloween lights went up early this year. And in our neighborhood, there seemed to be a lot more of them--along with tiny ghost dolls hanging from trees, cobweb-like fabric stretched across porches, plastic spiders perched on roofs, and bloody plastic hands emerging from cardboard gravestones. For some reason, Halloween seems to have become a bigger deal than it used to be.It''s not just an impression. In 1999 Halloween became the second-biggest American holiday, based on the amount of money spent on decorations. According to Unity Marketing, Americans spent $659 million on Halloween stuff in 1999, pushing it ahead of Easter into the No. 2 spot. (Christmas is easily No. 1, with $1.9 billion spent on decorating.)

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