Icicle-Light Sensation
Left Inventors in the Cold
NEW CASTLE, Ind. -- To decorate their gift shop here, Juanita Donica and Dianne Syme devised a string of showy Christmas lights six years ago that went on to become one of the hottest new holiday decorations in three decades.
Their invention, known as icicle lights, became an instant hit and might have made the mother-and-daughter team very, very rich one day. After customers of their store fell in love with the drippy-looking luminaries, the women began marketing the lights nationally and were overwhelmed with orders -- some $5 million the first year. Not since so-called chasing lights were introduced in 1986 had so many American homes been decked out in a similar Christmas lighting fad.
But the holidays didn't stay so happy for Ms. Donica and Mrs. Syme. As it turned out, the patent they obtained wasn't enough to prevent large competitors from copying and raking in most of the profits from their invention. Rivals stole their secrets; one even copied their special packaging. "We were absolutely shocked that Christmas was such a cut-throat business," says Mrs. Syme, 35, the daughter of 51-year-old Ms. Donica.
The saga of the icicle light illuminates how Christmas decorations have become a kind of trendy fashion, subject to the same laws of competition as any other mass-market product. Consumers used to buy new Christmas lights only when their existing sets malfunctioned. But now many people are leaving their old set in the attic in favor of the latest design or color.
Such fadish behavior has brought some cheer to the industry. Retail sales of Christmas lights doubled to $1.2 billion between 1997 and 1999, though the boom has slowed a bit in the current sluggish economy. "We've tripled in size in the last three years," says Nori Juba, president of Minami International Corp., a big supplier in the highly fragmented industry.
But like apparel designers, Christmas-decoration makers are discovering that concocting the next hot thing is only half the battle. The other half is capitalizing on it before the competition can follow suit. "Once somebody sees something that's hot, it's a very competitive business," says Robert Braasch, executive vice president of Inliten LLC, a long-time supplier based in Northfield, Ill.
Newcomers to this holiday industry can make the wrong assumption that it operates according to the sentiments of Christmas -- peace on earth, good will to men. Not so. Certainly, Ms. Donica and her daughter didn't appreciate what a tough market they were entering. Ms. Donica was a long-time postal worker who in 1993 quit to open a gift shop and gourmet food store in this rural Indiana town, population 21,000. Her daughter, a housewife and mother of three, joined her.
Looking for a way to set the store apart at the holidays, the women decided to decorate it with lights. After they devised the notion of lights strung to look like icicles, it took them six hours and some staples and nails to put together such an arrangement by draping and hanging multiple cords of lights together. Then an odd thing began to happen: Designed to draw customers into the store, the lights garnered more customer interest than most of the products inside.
After two years of watching neighbors mimic their makeshift design, Ms. Donica and Mrs. Syme hired a welder to make a device, called a Quick-Strip, to facilitate fashioning lights into icicle shapes. Despite their lack of experience as entrepreneurs, they tried to be savvy, hiring a lawyer and securing a patent and trademarks, and Mrs. Syme's husband, a graphics designer, made a special cover for the package. In 1996, they displayed their creation -- named Light Cicles -- at a February Christmas trade show in New Orleans.
Retailers overwhelmed them with orders. "We had planned on selling a few truckloads, but these people wanted huge containers," says Mrs. Syme, who was virtually speechless when buyers asked about warehousing facilities. At the time, the women were planning to run the light business out of the back of their gift shop. By scrambling, they were able to supply a few catalogs in time for Christmas that year and get a factory in China to make the product. Their sales, limited tremendously by capacity, nevertheless reached a respectable $5 million.
But even at that first trade show, competitive trouble was in the air. "We had people stealing the boxes at night," recalls Mrs. Syme. Why didn't she lock them up? "Here we are, New Castle, Indiana, people," Ms. Donica says. "We had no idea." And unidentified camera wielders walked up to their booth to snap pictures of their display, something the women found suspicious. An industry trade group called National Ornament and Electric Lights Christmas Association gave the women its Best Product award for 1996, sealing their arrival as major players on the Christmas decoration scene.
Just one year later, at the trade show for Christmas 1997, other vendors offered icicle lights too. And several suppliers, including Minami, sold their versions to retailers that year. Minami's Mr. Juba makes no apology for copying the idea, which he says his company improved upon by making the lights easier to install. Meanwhile, Ms. Donica and Mrs. Syme's patent is just for the Quick-Strip, which the lights are hung from. Minami and others came up with other devices that could be used to hang the lights, or they made lights with cords that already hang down.
But it wasn't just the idea that competitors aped, the women say, it was packaging too. In an industry that mostly sold lights in green-and-red cardboard boxes, Light Cicles stood out for its blue package featuring a house decked with lights. "They came out with such an incredibly beautiful package, and after that the packaging from other companies started to move to their colorations and their designs," says Gabriele Edgell, president of NOEL and publisher of Selling Christmas Decorations, an industry magazine.
At the 1997 convention, a rival named H.S. Craft Manufacturing Co., based in Taiwan, mimicked Light Cicles both in idea and packaging by superimposing an "S" onto the product name and calling their's Light Sicles. This time, Mrs. Syme took pictures and called a lawyer. H.S. Craft couldn't be reached for comment, but last year, the women won a court battle ordering the company to recall its lights and pay the women profits from 1999 icicle lights sales, according to a judge's ruling in U.S. District Court, Southern District of Indiana. But by then, so many other versions of icicle lights were on the market the women couldn't afford to go after them. "If we had the money, I would have taken every single one of them to court," Ms. Donica says.
In 1997, sales of Light Cicles jumped dramatically -- the women won't say how much -- from the previous year's $5 million. But after that, competitors stole the show. Icicle-light sales this Christmas accounted for nearly 40%, or $80 million, of Minami's $200 million in sales. Meanwhile, sales of Light Cicles at Ms. Donica and her daughter's company, Tisket-A-Tasket, have fallen back to less than $5 million, with the women investing most revenue back into the business, they say.
Although different color schemes prove popular each year -- clear lights have been the rage in recent seasons -- icicle lights were a definitive variation on basic light sets, much like their predecessor, chasing lights. The chasing design, which employed timing technology that makes the lights on a cord appear to follow each other, was invented by Minami, based in Yonkers, N.Y. Without a patent on the design, Minami's chasing lights were widely copied and no one brand stood out. Other developments in Christmas-light strings, which date back to 1903, include the water-filled bubble lights of the 1940s and flashing lights in the 1960s.
Now, the icicle-light craze is fading. Mr. Juba figures 100 million units of icicle lights were imported into the U.S. this year, down from 120 million in 1999, when consumers bought $480 million worth.
So Ms. Donica and Mrs. Syme are plotting their next creation. Having closed their store to focus full-time on decorations, they believe they have hit on a notion that will be as big as icicle lights. For fear of copycats, they won't divulge specifics other than to say the product, trademarked as Frosties, will debut in time for Christmas 2001. And this time, they skipped the tradeshows and went directly to retailers. Already, they say, two big chains have placed orders, for a total of $5 million.
The women figure it will take a year or two before other suppliers find a way to copy it. By then, they expect to have moved on to a new idea. Mrs. Syme says, "Now we know how to get in and get the money made before competitors come in."
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