Why a giant NC costume business sold much of its company to Warren Buffett’s subsidiary

A Charlotte company that bills itself as the world’s largest costume distributor has sold much of its business to another party retailer.

Morris Costumes, the three-generation family business that carries over $50 million of inventory, recently sold its e-commerce and wholesale divisions to Oriental Trading Co., co-owner Scott Morris confirmed to the Observer on Monday. Terms of the deal were not disclosed.

Morris Costumes ships about 20,000 packages a day worldwide, from Australia to Saudi Arabia, the Observer previously reported.

Oriental Trading Co., based in Omaha, Nebraska, is a wholesale supplier of novelties and party and holiday supplies through its catalogs and website. In 2012, Warren Buffett’s Berkshire Hathaway purchased Oriental Trading Co., with some news outlets reporting the sale at $500 million.

Morris said the decision to sell the divisions was not related to pandemic or financial concerns. Morris Costumes’ sales last year were 10% higher compared to 2019, he said, despite COVID-19 shutdowns. It’s part of the company’s “succession plan.”

“The business has grown so much that we felt that there’s an opportunity to continue to grow,” Morris said. “It’s a large entity that can reach where we never could before.”

‘Continuing the business as is’

Morris, who turns 62 this month, said he will continue to manage and operate the distribution center for Oriental for at least three years.

Neither Morris nor his sister Terri Bate, who runs the costume company with Scott, intends to retire anytime soon. Bate’s sons, Sean and Brandon, also are part of the business.

“I’m hoping it means we will continue to have the creativity and investment to develop even more products,” Morris said of the sale to Oriental. The Morris family will continue to operate the retail stores.

Morris doesn’t expect the sale to affect the company’s 40 full-time employees that swells to around 300 during Halloween season.

Berkshire Hathaway referred comment to Oriental Trading Co. Oriental Trading Co. CEO Steve Mendlik said there will be no employment impact on either company.

“Morris Costumes’ large assortment of costumes, accessories and décor is a perfect complementary addition to our product line,” Mendlik said.

Customers won’t notice any changes, either, because Oriental has carried some of Morris Costumes products for more than a decade

“We’re just continuing the business as is,” Morris said of the March transaction that was first reported by the Charlotte Ledger newsletter. “This will give us some opportunity to look at other opportunities for the future.”

Mendlik said the two companies are already gearing up in anticipation of a busy Halloween season. “We will soon be hiring 250 to 300 seasonal employees in Charlotte,” he said.

Wholesale to retail stores

The sale also won’t affect Morris Costumes retail shops.

The year-round store on Monroe Road is run by Morris’ mother, Amy, who started the company with her late husband Philip over 50 years ago.

“The business started in the basement of our home when I was a kid,” Scott Morris said. He joined the business in 1997, and it has grown from a 25,000-square-foot building to the current 300,000-square-foot distribution center in north Charlotte on Morris Estate Drive.

Morris Costumes also is a franchiser of the seasonal pop-up stores Halloween Express with five locations in Charlotte and more than 100 stores across the country.

Morris Costumes has also acquired other companies in recent years, including Foothills Creations, which makes vampire fangs, and also Lacey Wigs, which specializes in theatrical costume wigs.

And, it’s not all costumes. During the coronavirus pandemic last year, Morris said sales for Halloween costumes started in August but home and yard decorations blasted past previous years, more than doubling typical sales numbers. He said sales were good for other holidays, too, like Christmas, Easter and July 4th.

“What people were buying was quite different,” he said, “but we had a very good year.”

Morris expects big things this year, too, with parties resuming as more people get vaccinated.

“Everyone is getting ready to get out and party, and be with people again,” he said.