How a family-owned costume shop is keeping tariffs from making Halloween
a nightmare
[October 10, 2025] By
ANNE D'INNOCENZIO
NEW YORK (AP) — With Halloween on the horizon, Chicago Costume is
stuffed. Packaged costumes, including superheros and Japanese animation
characters in both kid and adult sizes, dangle near colorful wigs and
bottles of fake blood. Downstairs, vintage clothes from the 1970s beg
for one more boogie night.
The frightening possibilities mask the work that’s gone on behind the
scenes to stock the family-owned shop and its sister store for the
spooky season. Owner Courtland Hickey said he ordered 40% fewer costumes
this year because of President Donald Trump's tariffs on products from
China.
To fill the gap, Hickey and his mother, Chicago Costume founder Mary
Hickey Panayotou, looked to their decade's worth of unsold costumes and
accessories to see what could be repackaged or repurposed. The tariffs
made new imports more expensive, and storewide price increases might
spook customers, he said.
“If people have less money in their pocket to spend, ... then costumes
are going to be lower on their list,” Hickey said. “So the more we have
to invest in new products, the riskier it is for the business because we
aren’t going to sell it.”
Tapping the old inventory required sorting through several thousand
items stored in backrooms and a warehouse. Vintage pieces once reserved
for rentals combined with fresh items became sets. A surplus of black
robes became the foundation for Halloween wizards, judges, choir members
and graduating students, Hickey said.
“They’re a staple piece that gets transformed by the accessories we pair
with them,” he said.
Some of Chicago Costume's 35 employees also got busy sewing fabric
scraps and foam material into imitations of the miter headdresses worn
by high-ranking Catholic clergy. Paired with a robe, the headwear would
let someone dress up as Pope Leo, a Chicago native.
Panayotou founded Chicago Costume in 1976 by custom-designing and
renting costumes for the Windy City’s theater companies. It fast became
a destination for non-actors looking for Halloween outfits.
Commercially made children’s costumes followed, and a stockpile of
capes, masquerade masks, “Star Wars” kits and other leftovers grew from
there.
“I’m kind of a hoarder,” Panayotou said. “I didn’t want to throw stuff
away. So there’s a lot of accessory items and pieces. Here’s the dress,
but we have only one glove.”
Having excess inventory typically is avoided in retail, but the practice
has given Chicago Costume a supply cushion during what has been an
unpredictable 2025 for import-reliant segments of the industry,
including toy manufacturers and stores.
Hickey said tariffs weren't on his radar until he and and other Chicago
Costume staff members met with suppliers at the Halloween & Party Expo
in January. Whether Trump would impose duties on Chinese goods after his
inauguration the following week was a big topic of conversation at the
Las Vegas event, he said.
On Feb. 1, the president signed the first tariff order of his second
term. Hickey already had ordered his usual number of new costumes but
put fulfillment and delivery on hold when the tariff rate on imports
from China ballooned to 145% in April. Nearly 90% of the costumes
Chicago Costume sells in stores and online are made in China, in line
with the costume industry average, he said.
Some suppliers already had products ready and said they would not charge
him extra, Hickey said. Others said he would have to pay more to cover
the cost of tariffs. “Take it or leave it,” he recalls being told. “I
pretty much left it.”
Other small businesses that rely on Halloween describe similar their own
tariff-related woes. Trick or Treat Studios, which designs masks based
on characters from popular horror movies as well as costumes and props,
laid off 15 employees, one-fourth of its staff, in May, co-founder
Christopher Zephro said.
[to top of second column] |
A variety of face masks line the shelves at the House of Humor
costume shop in Redwood City, Calif., Thursday, Sept. 18, 2025. (AP
Photo/Terry Chea)
 Zephro uses factories in China to
make plastic masks but said he is reducing the amount of work done
there and shifting it to Mexico, where his latex masks are
manufactured. In the meantime, he raised prices by 15%.
At Chicago Costume, which generates well under $1 million dollars in
annual sales, shoppers will see fewer sales promotions and
discounts, Hickey said. Children’s costumes of officially licensed
characters and bulky sets will cost at least 25% more, he said. A
lederhosen costume, for example, is priced at $49.99, or $10 more
that it did a year ago.
Hickey, who has served on the board of the National Costumers
Association for 20 years, initially saw a silver lining in Trump's
tariffs. Big retail chains have siphoned sales from independent
costume shops with the help of cheap costumes from China, he said.
In May, Hickey published a column on the National Costumers
Association's website that outlined Chicago Costume's can-do,
environmentally superior approach this year. He hoped it would
galvanize the trade group's 100 independent store members — a group
that numbered 220 a decade ago — to dust off old stock, reorganize
their shops and prepare for “a potentially great Halloween.”
Tariffs have “peeled back the curtain on just how deep our reliance
on cheap overseas manufacturing has become," he wrote. “If this
shift hurts Amazon dropshippers, Spirit Halloween, or Walmart’s
over-imported costume lines, I’m not going to mourn. In fact, I see
it as a chance for us to reclaim what made local retail special."
Some of Hickey's idealism has since faded. The impact of tariffs on
Halloween played out differently than he expected. The largest
retail chains doubled down, flooding the market with cheap costumes
and dropping prices to hold onto customers.
“It’s been a lot harder than I hoped, but I still believe that
optimism, adaptability, and differentiation are what will keep
independent costume shops like us alive,” he said.
Chicago Costume is used to embracing challenges. To keep revenue
flowing year-round, the stores cater to cosplay fans and themed
parties. The Hickey-Panayotou family has a separate business making
mascot costumes for the Chicago Bulls and other professional sports
teams, and acquired a theatrical services company founded in 1886
along with its collection of period pieces.
Diversifying made it easier to rotate and refurbish old stock
instead of slashing prices after Halloween or throwing pieces away,
he said.
For a customer who wanted to be a Hollywood diva, his wife, Erin,
who handles social media for Chicago Costume, paired a robe trimmed
with feather boas from the vintage collection with a new cigarette
holder, hat and pair of sunglasses. Total cost: $65.
Damien Johnson, 53, is a longtime Chicago Costume patron whose
birthday is Oct. 31. He has spent as much as $300 on his Halloween
getups and said he would never shop online or at discount stores.
Despite his loyalty, Johnson delayed his costume-buying by a month
this year. He also gave himself a spending cap. Transforming himself
into the clown-faced Pennywise character from Stephen King’s “It”
will come to $90, including hair and makeup.
“I always overbought.” he said. “This year, I am good.”
___
Terry Chea contributed from Santa Cruz, California.
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