Lighting Margins Illuminate Potential Profitability of Category

Lighting Margins Illuminate Potential Profitability of Category

LOS ANGELES, CA — Once upon a time, chandeliers were considered the crowning touch of foyers and grand living rooms, but the attention on lighting has expanded beyond traditional boundaries of style and square footage. Now added into the design equation for bedrooms, kitchens and even bathrooms, chandeliers offer various style options for consumers and the potential for higher margins for designers and retailers.

"We tell our buyers to ask their customers, ‘Why don’t you have a chandelier in your bedroom?’" said Chuck Reilly, senior vice president at AICO/Amini Innovation Corp. "This kind of lighting can stimulate the consumer to react; it is a wow factor and allows retailers and designers with studios to utilize air space."

Reilly said that AICO has 50 SKUs in its line presently and plans to continue to grow the category in the future. Traditional styles make up the majority of the line, but AICO recently added 10 contemporary SKUS with LED lights, creating what Reilly calls "a pretty broad line" with retail prices between $249 and $3,000.

"Designers understand that lighting is the jewelry of a room," he said. "It creates the room environment. And it allows our company to present the comprehensive look that is Michael Amini."

In addition to the add-on product SKUs, lighting can also offer very good margins for designers and retailers, according to Reilly.

"I would say that price points are actually much higher than those of keystone mark-ups," Reilly noted. "There is definitely an opportunity to make more margin."

Going forward, AICO will continue to add new design elements to its lighting line. Reilly said the company will likely add floor and tabletop lighting in addition to expanded styles.

"Lighting in general is becoming more of a lifestyle product," he said. "Many people grew up with chandeliers in traditional homes, but now consumers are putting them into modern homes as well. They have transcended the traditional category and now more consumers are including them as design elements."

Prior to her role with Designers Today, Cindy attended markets as both a consumer home furnishings editor and interior design client. She has written about the design industry for more than 15 years and still finds editorial inspiration in every corner of the world, from Italian villas to Atlanta urban lofts to country escape tiny homes.