In short
David Littman, founder/CEO of Hudson Valley Lighting Group, explains how he built a lighting “empire,” why lighting manufacturing is leaving China, how to beat dupes with constant new product, and why he’s expanding beyond lighting into the whole home.
Guest backgrounds
David Littman grew up around lighting entrepreneurship (his grandfather helped develop fluorescent lighting; his father ran commercial lighting manufacturing). After grad school, he was steered away from investment banking into a struggling vertical lighting manufacturer (Active Specialty) in Newburgh, NY, where he learned manufacturing end-to-end (spinning, stamping, plating, painting, assembly, packaging). Over decades he built Hudson Valley Lighting Group, owning brands including Hudson Valley, CSL, Troy Lighting, Corbett, Mitzi, Sonnenmann, and Schoolhouse.
Key claims
China offshoring is declining as manufacturing shifts to Southeast Asia; “only weapon against dupes is new product” (they launch ~1,000 new products/year); success depends on brand voice and design trade focus, not price-point commodity; multi-brand overhead synergy enables profitable acquisitions; product success is learned within ~6–24 months; average product life is ~6–7 years.
Notable examples
Acquisition of LG Lighting (1995) to create Hudson Valley Lighting; buying Sonnenmann back from private equity after selling in 2018; acquiring Schoolhouse at auction to rebuild its team and “color story”; Mitzi launched to capture first-time homeowners; e-commerce channel origins via Lighting Universe; portables/rechargeables commoditizing, but they stay in their niche.
Written by AI. May contain mistakes. Listen to the episode to check what was said.
Chapters
Tap a time to open that second in VODavid Littman's Journey into Lighting
0:45 to 1:02
David Littman shares his early experiences in the lighting industry and family background.
“why the only weapon against dupes is new product, and why he's looking beyond lighting at the whole home.”
Learning from Struggles in Business
2:53 to 6:29
David discusses the challenges he faced in his first lighting business and the importance of manufacturing knowledge.
“around New York today, but it sounds like it made a big impression on your grandfather at the time.”
Transformation of the Lighting Industry
6:29 to 11:43
David elaborates on the shift from US manufacturing to overseas production and the implications for the industry.
“She's already got the bug at six months.”
Building a Lighting Empire
11:43 to 14:00
David recounts his significant business acquisitions and the growth of Hudson Valley Lighting.
“And so I grew up in a historic home with nice things.”
Building the Business from the Ground Up
14:00 to 20:42
Learn about the journey of building and evolving Sonomon and the insights on scaling a lighting company.
“They were a vertical manufacturer as well.”
The Value of Synergy in the Lighting Industry
21:26 to 28:00
Understanding the importance of brand synergy and the dynamics of the lighting market.
“The lighting industry, if I understand you correctly, is one of those industries where synergy really can work and multiple brands can benefit from the infrastructure that it sounds like you've built.”
Navigating the Lighting Industry Landscape
28:00 to 30:20
Learn about the different market segments and pricing strategies in the lighting industry.
“Or is it much more you got to move that product in volume to make it work?”
The Role of Showrooms and E-commerce
30:20 to 34:20
Discover the significance of retail showrooms and e-commerce in selling lighting products.
“So the design community helped to sort of push everything along in that direction.”
Consumer Preferences and Market Adaptation
34:20 to 37:00
Explore how consumer preferences are shaping showroom strategies and product offerings.
“I don't think it's the right fit for us.”
Launching Mitzi: Addressing Market Gaps
37:00 to 39:20
Understand the motivations behind launching the Mitzi brand to capture younger homeowners.
“And they put a whole book in front of me as to the look, the feel.”
Show all 17 chapters
Dealing with Duplication and Market Innovation
39:20 to 42:00
Learn how to cope with product knock-offs while maintaining innovation in the lighting industry.
“And we talk about the dupes and all these websites that help you just find an exact copy of the thing for less money.”
Understanding Product Lifecycle in Lighting
42:00 to 44:49
Learn about the typical lifecycle of lighting products and market dynamics.
“Is it quicker than that in the lighting industry or how long does it take?”
Market Trends in Portable Lighting
45:00 to 51:29
Explore the growth of portable lighting and its implications for the market.
“Is that one of the acquisitions you want to make?”
Acquisition Strategies and Market Positioning
51:29 to 56:00
Understand the acquisition strategies for home and lighting brands in the current market.
“I'm a much better buyer of things than a seller of things, much better.”
Navigating Infrastructure Challenges
56:00 to 58:59
Learn about the difficulties of building a lighting company from scratch without infrastructure.
“while we were building out the infrastructure.”
Impact of Tariffs and Currency in Business
59:00 to 1:02:52
Explore how tariffs and currency fluctuations affect pricing strategies in the lighting industry.
“But I imagine that it's been challenging for you this past year of figuring all of that out.”
Advice for Aspiring Entrepreneurs
1:02:53 to 1:06:36
Gain insights on the realities of building a business and the importance of resilience and financial prudence.
“So often people say, oh, what's the advice you'd give your younger self or what have you, what have you, so here you were, you really were 23, if I recall, right?”
Transcript
Automatic transcript. May contain errors.0:03This is Business of Home. I'm your host, Dennis Scully. Every week, I'll be speaking with leaders and innovators from all corners of the home industry. My guest this week is David Littman, the founder and CEO of Hudson Valley Lighting Group. David got into the lighting industry as a young man, acquiring a small manufacturing business that was on the rocks. Across the span of four decades, he's built an empire. Hudson Valley's portfolio now includes its namesake brand, plus CSL, Troy Lighting, Corbett, Mitzi, and more recently, Sonnenmann and Schoolhouse. I spoke with David about why the lighting business is leaving China, why the only weapon against dupes is new product, and why he's looking beyond lighting at the whole home.
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2:53around New York today, but it sounds like it made a big impression on your grandfather at the time. It did. My grandfather was with General Electric, and he was involved in the development of the fluorescent light. Then the bulb, which was introduced in the 1939 World's Fair for the first time, the first energy efficient light. And after the World Fair, he realized it was a business opportunity to develop the housings around these bulbs to actually create light fixtures with them. And so during the war, my grandfather developed a small lighting company called Lightron that my father took over in 1951, which became Lightron of Cornwall.
3:47And he built it, he sold it, he bought it back, and he sold it again. But that was over a long period of time. My father did that. That literally lasted his entire career, which was almost 50 years. He was also a lighting entrepreneur for sure, but very much in the commercial side of the business. He wasn't an aesthetic guy. He was more about quality of light, foot candles, engineering-based solutions for commercial lighting. Got it. Okay. And you grew up in the business, I take it, but tried to get away, David. You can tell me. I thought I was going to be able to get away. I was very unsuccessful at that.
4:36You were on your way to Wall Street. You thought, I'm out of here. Exactly. After grad school, I wanted to go into investment banking. Okay. And I was on my way and my father stopped me and said, David, I know you. And I just want to tell you that I think you'd be best served being your own boss. He said, I want you to look at a business that I think has potential. and I went to look this little, little, little, little lighting company called Active Specialty, which was in Newburgh, New York. And I was like, OMG, what am I getting involved with here? And I really, I thought about it for about three or four weeks, whether I was going to do banking or I was going to go into this little lighting company.
5:24Ultimately, I decided to go try it. Well, so was your father wise to spin it in such a way saying, oh, listen, I know you well enough to know you need to be your own boss? Was that the hook that made sense to you at the time? It did. It did. It made a lot of sense. And I'll tell you, my father was also very wise about something else. My dad did not want his kids in his business. He said, first of all, you won't develop working with me the way you develop working on your own. And secondly, one day we will sell these companies that he built, sold, and rebuilt. And he had set up great trust for everybody, nice trust for everybody.
6:10And he said, this will be a fabulous opportunity for the family. And I want to be able to sell the business when it's time. And I don't want a child in the business that would keep me from selling the business. So that's precisely what he did. it was helpful to all of us to do our own thing and build our own lives and build our own businesses i have a brother and two sisters my two sisters also are in lighting my brother's a doctor okay i'm telling you you know it's it's very hard to break away my poor daughter i have a 14 year old when she was about six months old she started pointing at lighting on ceilings and my wife said Oh my God.
6:49Yeah. She's already got the bug at six months. Yeah. Not good. So what was this little business that your dad wanted to show you? Very important to know. It was a vertical manufacturer of lighting. Why it's important is although I never made a dime in that business for a decade, I didn't. I mean, I literally struggled for a decade with that company. It taught me so much about manufacturing. We did our own spinning, our own stamping, our own bending, our own shearing, our own polishing, our own plating, our own painting, our own assembly, our own packaging. We did it all in that facility. So I learned a tremendous amount about manufacturing, which really set me up very well as I 10 years later realized that the opportunity in our industry was to get into much, much better merchandise and not focus on$19.95 builder chandeliers made in upstate New York.
7:52That you couldn't make a dime on, right? No, no. Yeah, right. Okay. Okay. So, and part of me wonders, was part of what you learned in that process that, yes, you needed to go higher end and have a more expensive product, but did you also reconsider controlling the manufacturing process? And did you think about, let's turn this over to someone else and focus more on the design or focus more on the collaborations? So from the mid 80s to the mid 90s, there was a huge transformation in our industry away from US manufacturing and toward production. Initially, while I was still producing in the New York, there was a movement to Taiwan.
8:38And then after Taiwan, there was a movement to China. I actually never did business in Taiwan. I went directly to China and started doing business in China in the mid 90s. and I just started using less and less of my facility as a manufacturing facility, and more and more of it for product development and warehousing, which is really where most of the industry is today, albeit there's been a movement lately from China to other parts of Asia. Still, there's not tremendous amounts of decorative lighting being produced in the US. And is that because just economically, it doesn't make sense? We don't have the abilities that Asia has to control costs and contain all of that.
9:24When I was in high school, we still had a very active BOCES program where some kids realized they weren't college material, but they were great with their hands. And I graduated, I'm 63 years old. I graduated high school in 1980. But shortly after that, I think it kind of became not such a fabulous thing to be working in factories in this country. So we lost a lot of skill. Right.
10:18to do it. Young people don't want to do it. So, you know, you end up going to parts of the world where young people still want to do that kind of work because they have to. And even in China, the young people don't want to do this kind of work anymore. It's hard work. They want, you know, they want to work in tech. Sure. So it's moving, it's moving to, you know, true third world countries that are still not developed. And that's Southeast Asia is where a lot of manufacturing is taking place now for our industry. It's kind of a transformation away from China as we speak. But there's still plenty going on in China, but I'd say at least 50 % less than what was going on there five or seven years ago.
11:01Interesting. Okay. So the move has been that dramatic. It's been pretty significant. Yeah. Okay. Okay. So I want to talk more about that, but let's come back to you and falling in love, I hope, with the lighting business, even though you struggled with this first acquisition for 10 years. Tell me, you said you learned a great deal from the whole process. I did. And what did you do with what you learned and how did you decide you wanted to move forward? What I learned was I wanted to start producing things that I actually enjoyed, that I liked, that I would use myself. I grew up in a house, My mother was from Austria, and she was an antique collector.
11:43And so I grew up in a historic home with nice things. I used to go to, I went to auctions with my parents. I grew up in a family of collectors. Even though I was a kid, I had a decent eye. So I knew the difference between beautiful and elegant and sophisticated and high quality. and I wanted to make beautiful things. And so we started working in probably around 1993, four, eight, nine years in, we started working toward developing much better products. In 1995, I bought a company that was twice the size of mine that was failing and added it to my business in my facility with my team. They also made some nicer things and we were starting to develop nicer things.
12:39It all kind of came together at the same time. It was like my aha moment. It was the one plus one equals three scenario. And I had a business three times the size that I had a year earlier. Then we just started building this business. That business was in 1995 when I bought a company called LG Lighting, added it to Active Specialty, we created a new corporation called Hudson Valley Lighting. Okay. That was really the beginning of the beginning for me. So I took 10 years of hard knocks. You went to lighting school for 10 years. I did. I was not a fast study. I would tell you, I almost gave up. You did?
13:23I did. But then I took a look, you know, I'm not a quitter, you know, I'm a fighter. Yeah. My mom and dad always taught me, you know, you fight through the hard times. So I fought and it worked very, very well, very quickly after that. So we built this business from 1995 through 2001. In 2001, I acquired Troy Lighting and CSL, which were based on the West Coast. I started looking at it in the fall of 2000. It was a failed business. And I looked at it. They were a vertical manufacturer as well. It kind of was deja vu for me. Yeah. In a post-traumatic stress kind of way? or no no i i love by the way i love manufacturing okay i really do i love it right i love it you know so i really appreciate it most of our manufacturing that we do and factories we own are in asia but we feed them with great machinery and technology and support i'm a manufacturing junkie i i appreciate what good manufacturing can accomplish but i bought this so i bought the company in LA.
14:36I had a president out there, a great guy. His name was Steve Nadel, who was with me for over 20 years, like probably 22 years or so. And we built a really nice business out there. So we built Troy, we built CSL. I bought a company in 2004 in Dallas, Texas, and moved it to California. The name of that company was Corbett Lighting. In 2005, Robert Sodeman approached me. I'd known Robert from my earlier life in lighting, and he approached me to start a business with him based upon some of his designs. And we did that. We sold that business in 2018. And as you know, I just bought that business back about six months ago.
15:26Yes, which is so interesting to me that you sold that to private equity and then bought it back from the same private equity firm years later. So Robert Sonneman and our president, her name was Sunny Park, and myself, we built this business together. Robert on the PD product development side, engineering. Sunny in the day-to-day, she really drove sales, built this team out. And then I created the back office support, finance, warehousing. And so it was a really great dynamic between the three of us. We built that business from nothing and built a terrific business out of it. And in 2018, Robert approached me and said, I would like to sell the business.
16:19Robert's a bit older than me. And I said, fine. Good partners have to be good partners. So Robert and Sonny started a process to sell Sonomon, and we ended up selling it in 2018 to private equity. And they took it in a slightly different direction. It was, I think, a bold choice to go the route they wanted to go. And it didn't work for them, I think, the way that they wanted it to work. Well, so what was appealing to them in the first place about Sonomon? Why would a private equity firm want to buy a lighting company? Branding is everything in lighting. If you have a great brand, if you have a reason for being, if people know why they're buying from you, if people like buying from you, those are the reasons to own a lighting company.
17:11Sonneman had all that going for it. We built a very nice, very profitable business. It had a real perspective in modern and contemporary lighting. Yeah, so it was right. Right. It was a very modern brand. And it had, as you say, a clear point of view and a clear customer base. And Sonomon was a strong name to your point. And so it had what it sounds like are all the necessary elements. And so Doomspoint Capital thought, oh, we can we can grow the heck out of this. We can. Right. Right. Well, I think the reason they bought it was the right reason. I think that what needed to happen, listen, it's easy to look back on it, you know, later and say what should have happened.
17:52To do what? What were they, what was their idea of where they were going to take it? I believe their idea was to really scale the business. And that business could have been very scalable. Okay. If I were them, I would have gone out and done an add-on acquisition. So bring something, another brand on and grow it that way. Okay. The power of multiple companies in one overhead is pretty powerful. A single company, whether you're doing$20 million or$50 million, is one thing. Because you're going to have an overhead structure, right? You're going to have accounting and finance. You're going to have sales.
18:30You're going to have management. You're going to have operations. You're going to have warehousing. If you're going to have all those things, you may as well add on another 30 or$40 million of revenue into that same overhead structure. Now, all of a sudden, you've got a much better opportunity to build a really profitable business. That's how I view it. I wasn't around during those seven years, and I really wasn't in touch with the management team during those seven years. So they went off, they bought Sonomon, they did their own thing. You weren't involved. And then how does it come back to you?
19:08We actually contacted Dunes and told them we were very interested in reacquiring Sodom. And we worked with them and were able to come together with a deal that made sense for everybody. And we were very happy to get them back in our family. And it seems like it's a very different product than what I typically think of Hudson Valley Lighting. as being, or some of the other brands that you've mentioned? And is that part of the appeal? So when I sold the business, it wasn't as different as you would think. It was very modern. Right. And that's what differentiated it. But we still had a tremendous amount of decorative lighting.
19:53After our ownership, it transformed much more into a, let's call it architectural, almost commercial direction. and we're going to definitely refocus it on contemporary and modern decorative design again. Our channels of distribution, that direction is warranted for us. We have good penetration in commercial markets, but we've got even much better penetration in the decorative markets with With retailers, the design trade, contract and hospitality, those are our strongest markets. And that's where Sonnenmann shined. And that's where we'll make Sonnenmann shine again.
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21:25And now, back to the show.
21:32The lighting industry, if I understand you correctly, is one of those industries where synergy really can work and multiple brands can benefit from the infrastructure that it sounds like you've built. So you can make additional acquisitions and you know you're going to be able to enhance value almost immediately because of the structure you've got. Exactly. And also give the nourishment to a business necessary without bleeding to recreate or rebuild the foundation of the business so that we can grow it properly and in a healthy fashion. So we're six months into rebuilding Sodom. I think probably by the end of this year, early next year, so a year from now, we'll have definitely put our signature back on Sonnenman in the way we see the direction of Sonnenman moving going forward, which then, of course, brings up Schoolhouse.
22:32Yes. And we have the same viewpoint on Schoolhouse. We really like what Schoolhouse does for a living. We like the community it sells to. We like how they go to market. It was a very, very, very good brand. I don't really know all the details of the combination of Food 52 and Schoolhouse. Has you been following that drama at all? Not at all, actually. okay i just i just saw the opportunity to acquire uh schoolhouse and i thought it was a great opportunity for our companies i love the fact that school has positioned themselves it's got this kind of really cool portland vibe to it yes their team does color beautifully very thoughtfully they're also in other than lighting lighting is part of their business but they're also in many other categories.
23:27They're in textiles, they're in hardware. And they had some very good people, very talented people. And, you know, people always make a business. So we're slowly putting their team back together. Many of them were terminated from their jobs. Most all of them were terminated from their jobs. And we've been rehiring some of them. We'll probably bring some on as consultants as well and see how that goes. But it's a brand that's supposed to be alive. It's not a brand that was supposed to go away. And we have a pretty good idea what we want to do with it. I think similar timeframe a year from now, you should see a new and improved schoolhouse, one with a little more love than it's had in the last couple of years and with a lot of the same talent, you know, helping us continue their story because that color story that they tell is just fabulous.
24:23Their textiles are amazing. Their rugs. I mean, I'd own their rugs. I love their rugs. Oh yeah. And I had had the head of the company on the show multiple times and was very impressed with that operation. And as you say, the Portland voice that it had and the kind of cool kids vibe that it gave. And I think, as it sounds like you do, I think there's a lot of opportunity to expand on that. And candidly, the Food 52 acquisition never really made sense to me. I guess they had a lot of money and so they were expanding in all sorts of different directions. Food 52 was a brand I loved in a separate way, but they seemed to go off in other directions and well we know what ultimately happened as a result of of that yeah that didn't work well that didn't work out well but but you know it seems like there's still demand for food 52 i think both brands will live i absolutely and i'm i'm delighted and and you know america's test kitchen is a great place for food 52 to go and and and thrive and i i wish them well with that yeah and i don't know how schoolhouse i don't know who presented it to you or who brought you the deal, but it seems like it was priced to move.
25:38So good for you on that end, right? It was active. There was a lot of interested parties to buy that business, more than we thought, actually. But I pretty much told my team, we're going to buy this company. And so we just buried our head and said, guys, let's go. And we bought it at auction and we were just going to keep bidding until we owned it. And did it turn out to be more of a bidding war than you had thought originally? Yeah, there was another bidder that pushed us further than we thought we would need to go. But I just said, keep going. You just saw the value in it and you said, we got to have this.
26:15Yeah, I know what we could do with it. And I also, you know, it's also good for us because it gives us an opportunity now, once we've got that right, which will be, let's say a year from now, it gives us an opportunity to do other acquisitions away from lighting. and I am still having a lot of fun doing this. You know, I'm at a stage in my career where I want to do the things I like to do. And I have found that I really, I love doing acquisitions. I love product development. And I just, I'm a finance guy kind of by nature. And those are the three areas that I really want to spend my time. I've got an incredibly capable team led by a very capable president.
26:55They do a great job. They do a better job at it than I can do. So, you know, you have to recognize your strengths and weaknesses. Absolutely. Absolutely. So tell me, again, helping to educate me about what makes a lighting line successful. I mean, you talked earlier about Sonomon. It built a great name. It knew its voice in much the same way that I think Schoolhouse understands its voice. And if well stewarded, it will grow in that direction. And there's lots of opportunity there. With a lot of the lighting brands, and I think of Visual Comfort, I don't know if you're familiar with this company, but it seems to be a big player in the space.
27:35They seem to focus a lot on their collaborations, Thomas O 'Brien, Alexa Hampton, lots of big name designers. That seems to drive a lot of attention and focus. Is that an important element? What does a lighting line need to find great success? And is it a good margin business? Can lighting be a high margin business? Or is it much more you got to move that product in volume to make it work? So there's a lot of different ways to be successful in the lighting industry. To kind of walk you through it, you've got your commodity guys. and the guys that produce, let's say, the everyday goods, they're large suppliers to home centers.
28:22They supply the foundational products for lighting showrooms all at a price. So it's more building a company around hitting very, very important price points. So price sensitive. and that's not really how we're wired as a company, but there's a real place for them in the market. Then you have a much smaller handful of companies that are good at creating value-add products, really high design. As you go up the ladder from medium to medium high to high price, the air gets more and more rarefied. It gets harder. Collaborations can help in this digital world we're in, you know, because known names help draw attention, right?
29:14We have some collaborations. I would say our collaborations are maybe they're 10 % of our overall product development, 10 to 15%. The other 85%, 90%, let's say 85 % is our own. So we develop, I would say, from mid-price points all the way to the highest high. We focus on the design community with our product development, the design trade, and how they decide to buy it, whether it be through retail lighting showrooms, third-party e-commerce, in some cases, direct with the design trade, how they decide to buy it. it's really up to them. But the design community is definitely our largest end user, and they want typically better goods, identifiable brands, high quality.
30:10They're not as price sensitive with the projects they're working on. And that's really our strength. That's our strength. And that sounds like where you wanted to go anyway, yourself, right? So the design community helped to sort of push everything along in that direction. I feel like it was, you don't remind me, but was it eight years, nine years ago when you first opened a big showroom in High Point? That's right. Yeah, it was nine years ago. High Point and I think maybe the year after that, Las Vegas. Right. We've always been in Dallas. Retail lighting showrooms were our, and still are our bread and butter.
30:47We do a lot of business with our retail lighting partners. They're very meaningful to us. But we also have third-party e-commerce. I remember, I think his name was Gary Rubin. Gary came into our showroom in Dallas in roughly 2000, and he was pitching this new idea. The name of the company was Lighting Universe, and it was the first e-commerce lighting website. He's like, this is going to be big. Exactly. And Gary had to explain to everybody what he was trying to accomplish. you know so many people didn't open him for a long time yeah i think we maybe his first year so didn't open him and ultimately we saw that that was the you know definitely one of the channels future channels of distribution for our products and so we we did start selling lighting universe he built a very nice business and then you know many others came into the space as well lamps plus came in and you know you know all the names that came sure sure sure sure and lumens and everybody, right.
31:52They all came along. Yeah. Wayfair. Right. Right. And Wayfair, which I'm sure is a huge distribution channel for you. And in a way, are you grateful that all those players came along and so they can do the e-commerce side of it and you don't have to build all of that and do all of that? Or are you thinking, oh, maybe I do need to control some of that distribution? I think that them coming along was really good for the consumer. I think our lighting retailers stepped up their game, which ultimately was good for them. The ones that followed us on our journey of product development, and there are many, realized that it wasn't only about price all the time.
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32:38So a lot of our retailers realized that, hey, we've got to make our showrooms nicer. We need our salespeople to be very professional and well-trained and articulate. it. We also need our sales groups to go in and educate them properly on a consistent basis. And I think that the lighting showrooms today that are healthy know how to sell much better lighting goods than they used to sell 25, 30 years ago. It's a different environment. And then, of course, the other channel I talked about was the design trade, which they like to do business many different ways. We just want to make our product available to the design trade in any which way that they see fit to want to buy.
33:22And they do it, like I said, through retail showrooms. Lots of retail showroom business goes through. The designers go through retail lighting showrooms. That's their comfort zone. Some go to the pro sites in e-com. And some have storefronts of their own. And so they want to set up their own accounts. So those are the three ways in which they buy their products for their customers. And does any part of all of that make you feel like you need to have, beyond being in Vegas and High Point and Dallas, as we were talking about, do you feel the need to set up a bunch of your own locations around the country and build that out?
34:03I think that possibly over the next few years, we would open up just a few, but it's more for look and feel and touch than anything else. In major markets, where there's a heavy population of them, we have no interest in opening up 50, 60, 70, 80, 90 showrooms around the country. That's not in our model. I don't think it's the right fit for us. I just want, you know, where our products are not necessarily properly displayed. I want to make sure that the design trade can go in and touch it. We don't currently have any spaces. We've talked about it. We loosely talked about it. We have nothing in the works as of right now.
34:49I can't tell you that in six months we'll have our first one open. It's not like that. But it would make sense for us to open a few around the country. Right. Right. It does seem, to your point, from a marketing brand awareness perspective, physical locations help with that and giving clients the ability to touch and feel and really better understand the product. Yes. I mean, you know, there's kind of a divide at like roughly 45 years old. If you're under 45, I don't think you even need to see it. You trust your eyes, you trust what you see online, and you go for it. and you know that if it's not, if it doesn't live off to its billing, you can return it.
35:31People my age like to go see things, you know? So that's why for better goods, lots of the consumers for better goods are 45 and above. Yes. You need to set up some shops for people of a certain age. I get it. And listen, they still have all the money. So I think you want to cater to them for a bit longer. I understand the big wealth transfer is coming, but it hasn't happened yet. Exactly. Exactly. So you still got to take care of the boomers for a while. And I think the industry gets that. So build out some places where people can come and turn the lights on and off so they can see how it works.
36:10No doubt. Right. And and listen, I mean, I think Schoolhouse is going to help you with it with the younger demographic and all of that. And I think that's part of the appeal, I would imagine for you with that. Yeah. I mean, we have, we have a, you know, Sodom has a younger consumer. Mitzi has a younger consumer. Right. Another brand we didn't mention, Mitzi, which has a younger consumer and has a lot of collabs that I've seen. It does. It's got some really fun collaborations. Yeah. And that was a, that was a startup. We started Mitzi eight or nine years ago. My management team said, there's an opportunity in the market.
36:49and for two years prior to that, they were telling me, we need to do this kind of thing. We need to do that. Yeah, yeah, yeah, yeah, yeah. I was doing, so unbeknownst to me, a few of them got together and knew that they were going to have to basically put a pitch book in front of me. And they put a whole book in front of me as to the look, the feel. They didn't know the name, but they knew what they wanted to do with the product, the price point and all. And they were smart to do it that way. Well, so how did they articulate what was missing in your current lineup prior to the Mitzi? What was the opportunity that they saw within the offering that Mitzi could represent?
37:29So in thinking about the journey of a lighting consumer, we were not capturing the young, the first-time homeowners. Our price points were precluding most first-time homeowners from sinking their teeth into our brands. and the team pitched it to me. And after three hours, I was sold. They took you through the pitch book and they convinced you to launch it. And so then what does that even take? So you green light the launch of a new brand. What happens next? Well, the first thing it required was a name. And finally, the president of our business, Milena Matthews, said to me, what were your grandmother's names?
38:14and i said well helen and mitzi she said mitzi mitzi how can you not done told me that well what were you holding out of me with that one for exactly so after after like 500 ideas of names it ended up being my grandmother uh mitzi so from there launching the brand was product development which already some of the ideas were baked into that pitch book We tweaked it, but we did our first launch. It was extremely well-received. We did our second launch. It was even better received. And then launch after launch after launch, this brand just took off. It's been highly copied in our industry. Yes. But we just keep moving.
39:05We don't focus too much on yesterday's news. We focus on tomorrow, not yesterday. I'm so glad that you mentioned that because the lighting industry, I feel, more than any other category, is knocked off so often and so quickly. And we talk about the dupes and all these websites that help you just find an exact copy of the thing for less money. And even Tom Dixon came out and said, listen, you know, I'm a lighting designer and I'm actually introducing a low-end version of one of my lights that just gets knocked off all the time, right, in a way to kind of combat this whole thing. But how do you think about the dupe culture that we live in today and how do you deal with it, to your point, from a business standpoint?
39:54Sure, you say, oh, yeah, we're moving on. We've got the next design coming. But, like, they knock off Mitzi pretty quickly. With our seven brands, we launch about 1 ,000 new products a year. And I would say that we've got a pretty high hit rate of bringing freshness into the industry. You're never the most respected business in any industry when you're a follower. Leaders always get recognized. People want to do business with leaders. People want to do business with the innovators. and the guys who come in and, you know, make a 90 % replica of an item that we launched three years ago, honestly, isn't that interesting to most people?
40:41And, you know, our dealers have been very loyal to us. Our customers have been very loyal to us in general. And we just continue building through fresh development. You know, we've got a pretty unlimited product development funnel. It's big. We're, oh my God, right now we're launching. I'm a little woozy still. I just got back from a trip from Asia. And we just, I think right now we're working on fall 27. So to be working on fall 27, think about it. We launch a thousand products a year. We have about 1 ,500 products already in the cycle being developed. So we just bombard our customers with fresh ideas all the time, and they love it.
41:30They like seeing newness. Newness is what keeps things exciting. And designers are always saying, what's new? Show me what the latest thing is. Of course, right? And so that helps with that. Also helps, I'm sure, if you've got people on the road who are trying to get in to see people, you got to have newness. You got to have new things to show, how long does it take for a product to show its success? So one of the things in the fabric industry that's so challenging is often it can take a year and a half before you can really decide, oh, is this pattern working? Is it quicker than that in the lighting industry or how long does it take?
42:05Not really. So if you've got a runaway success, you learn it very quickly. You know, I would say in the first six months, if you've got a really solid A performer, you learn that in the first 18 months. If you have a, let's say a B plus, you learn that in the first 24 to 30 months. So it's, it's similar to any, any other industry, I think in home, lighting is not fast fashion at all because of the nature of what it is other than portables, other than lamps, you have to hire an electrician and people live with their lights for a long time. So it's, it's something people are thoughtful about their lighting choices before they aren't quick and random about it.
42:53People are very thoughtful about their lighting choices because they know it's going to be part of their home decor for quite a while. And so I, you know, in average, on average though, to answer your question, I would say it's about two years. Okay. Okay. So that, that takes that long for you to really know this is, this is a winner. And when you've got a thousand new products in development, are you simultaneously thinking, okay, we gotta, we gotta get rid of a bunch of things that aren't performing in order to make room? Yeah. I mean, our, our line is constantly getting larger, but we're always weeding.
43:23And of course, over time, an A item becomes a B item, a B item becomes a C item. Some A items stay at A items for 15 years. So yeah, you just have to follow the life cycle of every product and you have to manage them out of your inventory to the best of your ability over time. I would say the average length of a product for us is between six and seven years that it lasts in our line. An item that never gets beyond a B, let's say, and I'm just using this as a very simple methodology of A, B, C, D, F, but an item that never gets better, than a B, will probably last in our line about six years. And we'll slowly get phased out.
44:08A items can last a very, very long time.
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45:07You know, it's interesting you mentioned portables, and this just seems to be a category that's exploded, whether it's Pookie or all these other lines that have come along with rechargeable, and it just seems like that's really caught on. What's your sense of that whole market? Do you want to buy Pookie Lighting? Is that one of the acquisitions you want to make? David, feel free to break some news right here, please. So Pookie has a unique perspective. I think they caught the print moment. They were early and they pushed it hard. And they've done a great job. It's the right product at the right moment.
45:46Portables in general, rechargeables, we have a bunch of rechargeables. The rechargeable market is a good market. It's quickly getting to be a price point market. So, you know, it's commoditizing itself very quickly, which is unfortunate, but we'll just stay the course with the way we do things. Okay. Yeah, because Sonomon's got a bunch of cool portable rechargeable lights and lots of restaurants in New York have some cool Sonomon lights on the tables and yeah. And Hudson has some cool portables. Troy has some cool portables. But so the price point's being pulled down, you mean? It's becoming just very price competitive?
46:27At the lower end of the market, yes. Yeah, yeah. It's getting very price sensitive. But we just know who we are and we stay true to who we are. And we know who our customers. We don't feel the need to go respond to the$188,$99 retail rechargeable. That's not who we are. That's not what we do. Yeah. No, no, that makes sense. But I think your point, though, about the moment that Pookie caught this print market and the fun shades and the color and that make people sort of think about that whole category. Yeah. I mean, you know, it's a British company and they, you know, they're pretty true to the roots of being a British brand.
47:12You know, in Britain, they love their prints. Yeah. And the U.S., this is definitely a print moment. People are enjoying color and they, I think their timing was great. A lot of designers love the British aesthetic and they love seeing that sort of country home look. Right? Exactly. And you see so many parts of the market that really blew up during COVID and then post-COVID. So many Southern markets suddenly got to be so hot with largely that aesthetic. And painted finishes. Yes. And printed shades. Yeah, for sure. Yes. It's beautiful. I love it. I bet you do. But it does seem like you're thinking about acquisitions more.
47:57Sonneman and Schoolhouse seem to have perhaps revved up an engine for you. And from when I talk to the mergers and acquisitions guys, it seems like there's a lot of brands out there up for sale that could use some help. There are. So we're very selective with who we would allow into our family. If there's not a real reason for being, and the reason can't be price point, You know, we have no interest in being linked with commodity brands. It's just not, it's not what we do. It's not how we think. It's not how we operate. I don't think we'd be, I don't think we'd do it very well. It would have to be a company with a real perspective that's respected by the design trade that has been either poorly managed or under managed or under levered that we see an opportunity to build on.
48:54And it doesn't, it doesn't have to be a lighting company. You know, as we're now we're entering the home space in a more significant way and we haven't really started taking a good hard look at home companies yet. I'm quite confident that we'll do acquisitions in that space as well. You know, a full build out for the home is the ultimate opportunity for us. I think that's how to think about it. It's it goes beyond lighting. So is there a category within what you're describing that seems most appealing to you or where you imagine there's opportunity? Well, I think there's some categories that we really like that schoolhouses in.
49:34Love textiles, rugs, things like that. Love hardware. They're in the hardware business. They're in the mirror business. We love that business. I mean, these aren't spaces we've been in before, but there's places that we think we should be considering going. Okay. I can't tell you that I envision myself being a supplier of dining room tables. I don't see that. I'm not sure I see our companies being vendors of bedroom sets. I don't see that. Not from what I've seen so far in that space. And we're learning as we go here. Remember, we're letting guys enter new categories. But we're pretty good studies.
50:15We learn pretty quickly. We do want to control more of the home. We want to give our design community and our retailers an opportunity to buy more from us than just lighting if they want to. Yeah, well, it sounds like Schoolhouse is going to teach you a great deal and you'll see where the opportunities are. I certainly get the sense that we're still in a very challenging time for a lot of particularly lower and middle level brands to navigate. And so I know that many are still looking for a partner or an acquirer. Yeah. And I think I probably see a deal a day. You know? Yeah. Yeah. Most of them just don't fit the way I described to you, the way we would be thinking about an acquisition.
51:02but as we get going into the home space more beyond lighting and into other areas of the home we'll learn more about categories that we that we want to get more aggressive in in trying to do acquisitions in you know as long as it's fun for me i'm 63 and as long as it's fun and my my team really keeps it fun for me as long as it's fun for me i'll just keep doing this i have you Why not? Why not just keep building? I'm a much better buyer of things than a seller of things, much better. Tell me more. I like to acquire, whether it be companies, real estate. It has to be the right time for me to be a seller.
51:43And right now, my head is very much in acquisition mode, buying. And does this seem to be, I don't know what your sense is of where we are in the economy, in the business cycle. We all realize, again, in hindsight, that we pulled years worth of business forward during COVID with the incredible spike in sales that so many companies, and I'm assuming your own included, experienced in the COVID days. and then a bumpier ride coming out of it for the last several years, a frozen housing market, mortgage rates higher than people had gotten used to. And suddenly a war in Iran has sent rates back up, sent oil prices back up, where that dreaded word stagflation is coming back into the lexicon again.
52:36How are you thinking about this time that we're in? And is it a time to be acquiring a bunch of brands perhaps on the on the cheap getting ready for whenever we might come out of this cycle we worry only about the things we can control i mean that's the reality i mean you know i i can't worry i listen wars i worry i worry for our service members in the front in the us of course but i don't control it i can only worry about the things i can control i do think that that there are opportunities to buy things, but you have to buy the things that fit what you want to accomplish. So you have to, you know, we have a larger notion of what we want to accomplish as a business.
53:22We know where we want to go. I would never buy something just to buy something because it's cheap. You know, that's, that's not a good, that's not nearly a good enough reason to make an acquisition. And something else I learned over my years of making acquisitions is it pretty much is the same amount of work to buy a small company as to buy a larger company. So better to buy a business that has some scale, you're going to put the same amount of work into it. Whether the company does$8 million a year in revenue or$50 or$80 million a year in revenue, it's the same amount of work to get it integrated into your system and fit it into your ecosystem.
54:00So we're not looking at small businesses anymore. A couple of the companies I bought in the past were smaller, Corbett when I bought them was a smaller business and you know it's just it's a lot of work it's a lot of work to build them so you know now we're looking you know Schoolhouse was a larger company Sonnen was a larger business probably the next acquisition we do would I'd want it to be larger even than the last two we've done as in terms of revenue but also in reason for being They have to be important to the marketplace. People have to know why that company exists, how it fits into the world of whatever they do, and they care about it.
54:45So in other words, it's not a struggling brand. What you're saying is you're not looking to buy companies that are down and out or have fallen on hard times, it sounds. We are looking for companies that are under levered. Okay. You know, they don't have the right sales effort or they're struggling with supply chain. Their gross, you know, their margins are not in line. So they may not be making money, but they have, you know, a bunch of revenue. And a reason for being, I think we're very strong with supply chain. We are in a multitude of countries today. So we've got deep reach in that sense. You know, we were early to exit, start exiting China.
55:28We were one of the first, I believe. we started producing away from China in 2002 in the Philippines. It's ultimately a factory that I bought from our vendor in 2011. But I felt all along that you need a multi-country approach to supply. You know, putting all your eggs in one basket was, it never made sense to me. So even when we lost a fortune in the first 10 years of owning that facility in the Philippines while we were building out the infrastructure. You lost a fortune because? There was no infrastructure. You know, we had to build it. Right. They had nothing. There was no subcontractor universe.
56:12There was no anything. So it took us a lot of time, you know, to get it right. But we're in, you know, we're in many countries now in Southeast Asia. We can build way beyond lighting in those countries, way beyond lighting. And have you started telling them that you want to build way beyond lighting there? Have you given everyone the heads up? Hey, listen, I got schoolhouse now. We're going to be start, we're going to be going in a bunch of different directions. They gave me the heads up. They knew it before. They knew I bought schoolhouse, I think, within an hour of me knowing I bought schoolhouse.
56:45Okay. So they knew what that meant. They knew what that meant. Yeah. Interesting. Listen, we have great relationships. In all of our facilities, we either own them, we own the production of them. There's only a couple of facilities that we don't either own them outright or own the production of. You know, 85 % or 90 % of the factories we do business in produce only for us and or we we own them or we've helped finance them to build just for our companies because these factories all have a dna to them and they they needed to understand our dna and produced our dna so and and how is the whole tariff issue impacted you and and are you are you going to sue for a great big refund are you hoping you got a bunch of money coming back to you what do you we'll see how that plays we'll see how all that plays out i mean i actually I have, um, I also own a commercial lighting company with my sister and we were talking called USAI and we were, we were talking about that yesterday and I don't think you're gonna have to, I'm not sure you're gonna have to sue.
57:52I think there's going to be a refund program. And I mean, I'm probably going to say something very unpopular, but I think that for me, I I don't think the refunds are necessarily in the best interest of the government. I think they should, you know, if they want to change the policy, change the policy. If they want to do away with the tariffs, do away with the tariffs. But the rebates, you know, we have a big enough debt in this country. We don't need a bigger debt in this country. You know, in reality, I think that the refunds are going to go to the companies, but the companies in many cases have already passed those price increases onto the consumer.
58:32Sure. And that is part of the big challenge in the whole thing, right? Because consumers already paid that money and now the companies get the money back. Yeah. To me, it's counterintuitive. But like I said, I can only control what I can control. These decisions have made it a much higher level than mine. But I think that it's good news for the industry that the tariffs will be a bit lower. I don't know how long they're going to last for. It seems like things move very quickly these days. So you have to be very nimble. But I imagine that it's been challenging for you this past year of figuring all of that out.
59:11I mean, I speak to a lot of companies figuring out what do we do with prices? We keep raising them. How do we? And you do have to make an adjustment if your factory's in the Philippines or wherever. You've got to go and be realistic about it. I mean, you have enough factors when you're producing overseas. Take tariffs out of the formula for a moment. You've got currency. And currency moves around an awful lot. So you've got that risk, currency risk. Now you have tariff risk. And managing all of that, I guess we're kind of, I don't want to say numb to it, but we're used to it. We know how to manage through it.
59:50And there's more profitable years and less profitable years based upon what's going on. But, you know, slowly, if we have to pass it along, we try and pass some of it along. We try and eat some of it. We try and run a cleaner operation to be more efficient. We try and pass some along to our vendors as best we can. It's not easy, you know, because we need our vendors to also stay healthy so they can produce for us. You know, our relationships with our vendors are long and deep. If we don't own the factories, they're still our partners because they produce, most of them produce only for us. you know so i have the responsibility to make sure they stay healthy they have the make they have the responsibility to make sure we stay healthy you know we all we we get into our war room together and figure it out yeah no no it it makes sense and as you say you can't just pound pound the money out of your partners and and say you guys got to pay this because that doesn't work right that only works so long and then they're out of business and then exactly oh boy and then and then what yeah yeah is artificial intelligence showing up in the lighting industry in a meaningful way?
1:00:56Is it showing up at Hudson Valley Lighting in a way that you can imagine it having a big impact? So the answer is yes. Much more on the sales and marketing side. It has not found its way into our product development at all. You know, it's funny because we've played around with it a little bit just to see where it's at, the stage it's at. And you'll put in this description of a lighting product and what you want it to look like. And it starts kicking back stuff that looks like ours. And you go, no, we've already got that. Thanks. That's been there, done that. Yeah. I mean, you know, so AI is grabbing its ideas from man.
1:01:36Right. And so, you know, it's an accumulator of ideas. And I guess if you could be descriptive enough and you know precisely what you're looking for, maybe on a development side, it can be helpful. We don't use it at all for product development though. But for sales and marketing, it sounds like. So how's it helping you there? Well, that's when you'd have to get another person from our company on the call. Okay. Okay. Well, I'd be curious about that because what I am interested in and what I see a lot more, it seems like back of house, it is helping. I mean, a lot of companies are telling me, yes, it turns out we can put a lot of our finances in there and it tells us, hey, you've got an opportunity here, you've got an opportunity there.
1:02:20It does seem like people are putting CRM in there and getting some opportunities and seeing what customers are doing in a much more granular way than they were able to see before. Yeah. And I think that's what we're doing in our company, but I'm honestly not that close to it. No, no, no. I understand. I mean, it seems like it's here in a big way and something that we'll all be talking about much more as we go forward. I think that's right. Yeah. Right? Yeah. You know, it's funny. So often people say, oh, what's the advice you'd give your younger self or what have you, what have you, so here you were, you really were 23, if I recall, right?
1:03:05I was. When your father was saying, no, no, no, just come look at this, come look at this lighting brand and see what you can do with it. You learned so much in those first 10 years with all of that and since then have learned a great deal more. Could somebody come into this business in that way and do what you did? And how would you advise them if they were thinking about doing that today? So I think if I were going to go to a broader, a little bit broader picture of business advice, you're going to have hard times. whether they're self-inflicted or having nothing to do with you but having to do with just the world and the in the economy and you have to you have to be ready to fight through those hard times as frustrating as they can be and sometimes hard decisions have to be made we've had over my career i think twice we've had small layoffs in my companies but you have to be prepared to do the toughest of tough things.
1:04:11You have to be prepared to fight. And when things are really good, and things seem like they're rolling along, and things are easier, always be ready for the other shoe to drop and stay focused. And don't be wasteful in your business. I find a lot of businesses get wasteful when things are rolling along. They start drinking their own juice. and all of a sudden unimportant things start becoming, you know, very important. They do, you know, crazy build outs of spaces that aren't going to make a big difference in their business or they, you know, start making bets in categories that they don't know much about.
1:04:57Be wise in the way you spend money when things are really good, because when things are really good. And that's, it's, that's some of the time. It's definitely not all the time when things are really, really good. Just know that around the corner, there's another difficult time coming regarding, you know, trying to build what I've built, man, it took me a whole career, you know, and the first 10 years were tortured, very difficult. The last 30 years have been really, really good generally, but, you know, building, you know, building what we've built, I don't know how to do it quickly. I think you have to have a really unique perspective.
1:05:37If you, if you have a unique perspective or unique talent, you bring that to an industry that used to be more about sameness. I think there's more innovation going on now than there used to be. But if you have a unique perspective and talent, bring it in, you know, and the industry will welcome you you know run a good business be reliable and do what you say say what you do and i think there's room for you you know that that's all i can say how you build a large business i don't know i mean quickly it's almost impossible it's hard it's hard in in this space we're not in the technology and you know we're not in the tech business we're you know we're in brand building It just takes time and consistency.
1:06:21You know, you've got to be meaningful over a period of many, many, many years. You've got reliable, meaningful, and, you know, over that time, you can really build a really nice business. Which it seems like you have. We've done okay. I'm so grateful to you for making this time, and I'm delighted to learn so much more about your company and about you, and I've thoroughly enjoyed it. So thank you. It's my pleasure. I look forward to doing this again sometime.
1:06:55Thanks for listening. If you'd like to keep up with the latest design industry news, visit us online at businessofhome.com, where you can sign up for our newsletter, browse job listings, and join our BOH Insider Community for access to online workshops, a free print subscription, and much more. If you have a note for the podcast, drop us a line at podcast at businessofhome.com. If you're enjoying these conversations, please leave us a review on Apple Podcasts. It helps others to discover the show. This show was produced by Fred Nikolaos and edited by Michael Castaneda. I'm Dan of Scully. Thanks again for listening, and I'll see you next week.
From the publisher
David Littman got into the lighting industry as a young man, acquiring a small, struggling manufacturing business. Across the span of four decades, he’s built an empire. Hudson Valley’s portfolio now includes its namesake brand plus CSL, Troy Lighting, Corbett, Mitzi, and, more recently, Sonneman and Schoolhouse.
On this episode of the podcast Littman tells host Dennis Scully about why the lighting business is leaving China, why the only weapon against dupes is new product, and why he’s looking beyond lighting at the whole home.
This episode is sponsored by Ernesta and Resource Furniture
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Hudson Valley Lighting Group
Dennis Scully
Business of Home