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06
Oct
Harrogate companies team up to create innovative hybrid product
With Halloween just around the corner and Christmas on the horizon, Lights4fun is working flat out. This is the busiest time of year for the Harrogate company, which sells just about every kind of festive light you've ever heard of, as well as quite a few you probably haven’t, such as its thigh-high illuminated Christmas alpaca.
Gary Favell doesn’t recall which novelty light first grabbed his attention, but he does remember why he wanted to be the company’s chief executive, a post he’s held since March 2023.
He told the Stray Ferret:
I saw it was a very nice brand, all online, well established, with a very good, enthusiastic team selling quality goods. I saw opportunities in it.
It already sold to affluent customers like the ones you get in Harrogate, but I thought there were opportunities to sell to other demographics.
Lights4fun, which is based at Hornbeam Park, is one of Harrogate’s most conspicuous business success stories. Set up by Tim and Jo Naughton around their kitchen table in 2003, it was incorporated in 2007 and less than a decade later was turning over more than £11 million.
But then came the Brexit referendum, and the resulting turmoil and fall in the pound pushed the company to adopt a more international approach, spreading the risk across markets. It set up a German subsidiary, Lights4fun GmbH, and a US company, Lights4fun Inc, in 2017, with mixed results: the German company is thriving but the US operation is not.
Gary Favell, CEO of Lights4fun, with some of the 'tablescaping' products that are proving popular this autumn
Mr Favell said:
We’re coming out of the US – we've been exiting for the last year. The US is a huge market, but it’s very well established, and there’s a lot of competition there.
I believe in the potential of our locale. We have a huge market right here on our doorstep – the market in Germany is potentially bigger than the UK’s.
We want to concentrate on the ‘home markets’, where there aren’t any time difference issues. We’re not thinking of going back into the US.
The Naughtons went out on a high, selling the business to a management buyout backed by Manchester-based NorthEdge Capital, just as profits were accelerating before covid hit. But then the pandemic sent business growth into overdrive as more people started shopping online, and its new owners ended 2020 toasting a 35% increase in sales.
After a couple more years of steady trade, the cost-of-living crisis led to an 18% drop in turnover last year to £23.7 million, and a drop in pre-tax profits to £3.1 million.
There are early signs that economic conditions are improving, and Mr Favell is hoping that his strategy of investing in new product lines and seeking out new customers will pay dividends.
He said:
We’ve introduced a ‘good, better, best’ proposition – in other words, a wider range of similar products at different price points, so the price goes up in relation to what the products can do.
What we’re not prepared to do is compromise on quality, so all our products come with a two-year warranty. One year is the norm in this industry.
But the company is not resting on its laurels – or rather, plastic eucalyptus and laurel Christmas garlands, which it also sells. It’s teamed up with DOME, formerly the Harrogate Candle Company, to create a new hybrid candle/scent diffuser product that they’re hoping will do very well this winter.
The firm already sells huge numbers of its TruGlow candle range, which look like real candles, complete with flickering flame, but are actually plastic and turned on and off with the flick of a switch or the nod of a remote control.
The TruGlow Air portable candle diffuser combines this technology with a diffuser that can be loaded with different scented oils, depending on the season.
The TruGlow Air diffuser candle uses a patented design
Mr Favell said:
We wanted to see how we could bring a new candle solution into the home. Plug-in diffusers are not very aesthetically pleasing, so we designed a candle-shaped diffuser that intermittently gives out a scent.
DOME’s input was the development of the fragrance and the technical aspect of how to insert the scent into the product, making sure it’s very simple for the customer. They’ve done a great job.
We’ve got the patent on the design too, which means we have a window of opportunity now before it’s copied.
Lights4fun has also partnered with some big hitters further afield, and has more tie-ups in the pipeline. For Christmas 2022, the company was licensed by animation firm Aardman to produce and sell an illuminated Shaun the Sheep lighting display, and last year that was joined by a Gromit product, to coincide with the 30th anniversary of the Oscar-winning short film The Wrong Trousers.
Shoppers can also now find 25 of the company’s products in the home section of Marks & Spencer.
Two of those products are from its Elf on the Shelf range, which it makes under an agreement with the phenomenally successful Atlanta-based company Lumistella.
Mr Favell said:
I can see Lights4fun products being sold in every M&S home store. That venture has been quite a courtship – they’re a great partner.
The people who originated the Elf on the Shelf asked us to create the lighting version. People are queueing up to ask us to do lighting solutions for their brands. We’re in talks with a couple of household brands.
They’re looking for quality and expertise. With Lights4fun they get to go to market with an expert with a proven track record.
An Elf on the Shelf LED bauble
Lights4fun is not the only company on Hornbeam Park to be making waves internationally by innovating. Hairstyling product firm Cloud Nine has wrestled its way into the top tier of its industry with its patented technology, and EnviroVent – which grew into one of the UK’s ventilation giants when it was still based on the park – has become the go-to company for hundreds of social housing providers wanting to install its patented filterless fans.
Mr Favell said:
There’s a lot of innovation that goes on here, and I don’t think a lot of people realise that. People should be proud of what’s coming out of this town.
Who’d have thought that a little company like ours would be breaking new ground with M&S?
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