Meet the man behind those sexy Halloween costumes

Halloween: Dressed for success

It happened almost by accident.

The year was 2005, and then 26-year-old Chad Horstman and his brother, Evan, had just launched online lingerie shop Halloween was on the way, and the two saw an opportunity to grab a piece of the $1.15 billion costume market.

Because Yandy already carried several lingerie brands that produced sexed-up Halloween costumes on the side, the brothers decided to offer roughly 60 of these styles to their customers.

They were so overwhelmed by demand that the duo had to elicit help from friends to ship orders out of Chad's Scottsale, Arizona, garage.

Fast forward 10 years, and now offers 4,000 costumes — including such headline grabbers as "sexy" Donald Trump and sexy corn on the cob. It also generates roughly 30 percent of its annual sales from the holiday.

"Halloween became a big part of our business that very first year," Chad said.

Chad Horstman, CEO of

Yandy has since moved its distribution into a 35,000-square-foot facility in Phoenix and employs more than 200 workers. Still, it remains a family-run business. Chad serves as CEO, and Evan — a former supply chain analyst at Boeing — as chief operating officer. Their father, Bob, an accountant, also joined the firm early on.

The company has also expanded its selection to include nearly 200 exclusive costumes, many of which are designed and made in the U.S.A.

These include what Chad considers the brand's first big hit, the Sexy Tootsie, which went on sale in 2010. Yandy rode this edible theme the following year with its Sexy Watermelon costume (including a suggestive bite taken out of the right side). From there, it crafted Sexy Hamburger, Sexy French Fries and Sexy Pizza.

"We just went crazy with food costumes," Chad said.

The bet paid off when the company's out-there outfits starting attracting the attention of "The Daily Show," "The Ellen DeGeneres Show" and "Jimmy Kimmel Live."

Chad said Yandy's best sellers—which generate between 1,000 to 2,000 transactions—tend to be its sexier outfits. He added that the company narrows down potential costume additions by using the same two-part test.

"The way we think about it is ... if a girl walks into a party, are people going to know what she is?" he said. "And step two ... if she enters a costume contest, does she have a chance at winning?"

Deciding on the perfect costume also requires a little bit of luck. Back in 2012, when presidential candidate Mitt Romney made headlines for remarks that he would cut funding to PBS and "Sesame Street," Yandy already had a yellow dress and licensed Big Bird mask.

"We always just happen to have the right one at the right time," Chad said.

Yandy's extensive inventory also makes it easy for the firm to make small tweaks to existing items, so it can capitalize on current trends. Its Donna T. Rumpshaker outfit, for example, uses an existing costume's suit as a template, but substitutes in a pair of booty shorts. By using this technique, some of its costumes can be put together in roughly a week's time.

Donna T. Rumpshaker costume

Not all of Yandy's costumes are runaway hits. Its sexy corn costume — which Chad envisioned being worn by a group of women (transforming them into a cornfield), or generating buzz among Nebraska Cornhusker fans — fell flat.

"I thought it was a cool idea but it definitely didn't pan out," he said. Still, he said the costume ended up being somewhat of a success, as it ended up being featured on Kimmel's show.

Donna T. Rumpshaker costume
'Sexy' Donald Trump costume for sale

Because Yandy is private, Chad declined to share the company's financials. He did, however, say that the team has set a goal to have its first $1 million sales day prior to Halloween, and that it's on pace to be a $100 million company within three years.

Although it's early in the season, Chad predicted Donna T. Rumpshaker will be among its top five best sellers for 2015. Joining it there, he said, will likely be the company's take on Internet sensation "The Dress," which is half blue and black and half white and gold.

"I feel like that's going to be the sleeper one," he said.