Rob Stott: All right, we are back on the Connected Design Podcast and diving into the world of the I say I want to say luxury displays, but that doesn’t even begin to describe what’s going on. we really maybe should have a pronunciation lesson to start this this podcast here, Mr. Jeff Costello. brand Loewe. Is that right? Did I say that right? Or am I saying that like the Loewe? All right, I said it like the there’s I know there’s a brand out there, a luxury brand.
Jeff Costello: Close, close. It’s it’s luva. Yeah. Yeah.
Rob Stott: that they they have a whole I like Dan Levy and and Audrey Plaza for anyone that knows Schitt’s Creek and Parks and Rec, I think they did a whole thing on production so that’s making it worse for you. Gotcha.
Jeff Costello: It is. They’re a they’re a Spanish, I think that’s a Spanish company and it is and you did pronounce that one correctly. We are we are Gluva. It’s Germ it’s a German pronunciation of the word. It means lion in German.
Rob Stott: Yep.
Jeff Costello: But actually it’s a family name that we are named after the Loewes who founded the company back in nineteen twenty three. So I think we’ve been around longer than the Loewe company in Spain, but but still we do get confused with them. And it was kind of funny when I was when I first came on board to to for the task of launching the Loewe brand in the U.S. or l the Loewe company in the U.S., I had a lot of friends when I when I announced why I was going to work basically said, You’re gonna sell super expensive handbags and I’m like, do do I look like anybody would buy a very expensive handbag for me? I don’t think so. No, it’s a it’s a different company. Yeah.
Rob Stott: That’s awesome. That’s incredible. Well, two companies, it looks like it would be a very easy word to pronounce, two very different pronunciation, not super different, but you know, different pronunciation. So no, that’s awesome. Well, Jeff, I appreciate you jumping on and and wanting to do a podcast with us. And a a man that needs no introduction, but I want to give you that chance anyway. So for those that aren’t familiar, tell us a little bit about yourself, your background and path to Loewe.
Jeff Costello: Yeah, well I’ve been in the I’ve I’ve been in the technology product space for a long, long, long time. really in the high end residential AV kind of space, manufacturing space for like the last thirteen years and running the you know, running sales for Core Brands/Nortek Security & Control/Nice. so I’ve I’ve I sold a lot of really premium brands in the marketplace that you know from you know ELAN to SpeakerCraft to Niles and things like that, Panamax and Furman. So really a lot of experience in this industry and just kind of loved it and and kind of fell in love with everything about the industry and then was decided to try something new and kind of met Aslan Khabliev, the CEO of our company at CEDIA last fall and He said, What you want to do, Jeff? I said, I want to have some fun again. And he said, Well, let’s have some fun. Let’s let’s let’s launch Loewe in the U.S., which is kind of what we’ve done. So I was employee number one on October 6th. I’ve got a team of 12 people now. had to spin up a whole organization in in North America to be able to support the global vision for the Loewe brand. And really excited, really excited to do it. So it’s a fun challenge, and it is really it’s a blast being able to take you know a luxury product like this that is you know best in class in every aspect when you know when when we show that when we show it to people and be able to bring that to market and provide it to the luxury custom install dealers and luxury retailers so that they can show it to their customers. It really has been really has been a lot of fun being able to showcase that.
Rob Stott: Yeah. I and it is such a I there’s so many questions I have about it too, because it’s like for being a a brand that’s over a hundred years old now, I w do do you get a sense of from in talking with them like why the timing now for coming into this North American market? Like what made it right for them to feel like this is the time to sort of enter this market?
Jeff Costello: Yeah, you do get that. a little bit you get it, but you kinda it goes back to starting with for a lot of for a lot of people just wondering who Loewe is. And and then when you explain to them that we’ve been in business since nineteen twenty-three and really started making radio components back in nineteen twenty-three and really help with the With the technology advancement and the proliferation of re the radio throughout all of Europe. and at the same time in 1931, made the first commercially available TV ever made. And since then we’ve did a lot of other cool things, the first stereo television, the first internet inside of TV, things like that that we’ve done for years and years and years. Really kind of plant the flag that we we’ve we’ve been, you know, a leader in this space for a long, long time. And then you get you do get to the question of why come to the U.S. right why now? Well, Loewe is a very well-known luxury brand throughout Europe. But the goal for our company really is to be a global luxury brand, the global luxury brand in consumer electronics. When people hear the Loewe name, no matter what it’s on, whether it’s on TVs or whether it’s on you know over-ear headphones or whether it may be on a coffee maker or whatever it is, that they know it is a best in class experience, luxury experience that’s being provided. And if your goal is to have that, you know, globally, you have to be in the U.S. So that was why the company wanted to come to the U.S. they wanted to make sure that we that we had the product portfolio and wanted to come to the U.S. in the right way. So that’s why Aslan Khabliev, who bought the product back b bought the company back in 2019, was really focused more on Europe and getting getting the company, you know, get getting getting the product mix correct and getting all everything working well over there, and then decided to bring it to the U.S. last fall. And so that’s kind of we’re ready to come to the U.S. now. We have the product line for it.
Jeff Costello: We’re launching with the high-end TV line Stellar, which is which is the premium line that launched in Europe middle of last year. And that’s what launched to be launched here at the beginning of this year. and with our Loewe leo headphones, which are some really, really best in class over-ear audiophile headphones that are fantastic that launch next month in the U.S. And so that’s kind of what we’re leading with, the right type of luxury, luxury products and luxury experience. So that’s why the timing was we’ve got, you know, it fits with the global vision and it is and we’ve got the products to support it to come to the U.S. now.
Rob Stott: Yeah. And it and the cool thing too is you have this perspective of this channel and like the history of it and kind of where it or how it’s come to market or gone to market from a product perspective. And now you’re I like the design centric approach is just so different from what I think we’re traditionally used to. We’re seeing more of it, right? Like it’s I think as you know, CD as a channel understands the importance of building those relationships and we’ve seen them evolve and materialize with builders, designers, and architects and understanding that you know, the different languages that they speak. Now you’re coming from a brand where like that seems to be the prevailing language, you know, understanding design. so talk about that a little bit. Is it is it very how different is it?
Jeff Costello: Right. Yes. Yeah. J yeah, just because it just because the product works incredibly well doesn’t mean it can’t look beautiful too. You know, and that’s the thing, especially in the back. You know, you know, the just the attention to detail, the German craftsmanship that goes into the to our products. I mean, the thing that’s interesting, it kind of starts with everything is designed in Germany, engineered in Germany, and manufactured in Germany, all at the same facility. That’s kind of very, very unique. And they’re all distinctly different things. So you have a you have an incredibly talented group of people that are sitting around saying, This is what I want this product to do. This is the experience. They start with the customer and the experience the customer has at the end. This is what I want them to experience when using this product. And then the engineering team is it’s their job to figure out how to make that happen. And then once that once that’s all aligned, then it’s the you know the manufacturing’s team to figure out how to make it. And they’re all together in the same facility, which is really kind of cool. but everything about the product is is it’s It’s not just about the luxury experience you get on you know from the TVs from viewing the TV, it’s also every aspect of it. The front to back craftsmanship on it. there’s no plastic on the TV, it’s all brushed aluminum in the back and the sides, and it just everything about the TV just looks gorgeous. It’s not just a great-looking picture, and then everything around it is as cheap as possible. The back of the TV has hidden cable channels. So if you’re looking, if you see the back of the TV, you can’t even see any cables. Cables are all hidden there and they come down the stand, which is which is really cool. on some of the smaller size TVs, like the like our 65 inch and smaller TV, we have a bespoke. back, which is cool, which is which is made of either black lava stone or concrete stone. If it’s silver in the front, a silver bezel has a concrete back. If it’s black in the front, it has black lava stone. And what’s cool about that is it first of all, it looks amazing. It looks everybody looks at it and they have to put their hand up and run the hand up and down to like this looks so cool. But every one is is basically unique because it’s not a stamped pattern. It’s all it’s applied at the factory. So it’s like a fingerprint. No two TVs are the same.
Rob Stott: Yeah.
Jeff Costello: And that really resonates well with designers and with with dealers that want to explain that to their customers. It really is kind of cool. It is a unique experience. And the reason we do that is because we want the back of the TV to look just as beautiful as the front. And there’s a lot of instances where you might see the back of the TV. Now a lot of them are going to be mounted. You’ll never see the back, but In Europe, it’s it’s kind of common to use a TV as a room divider, a smaller size TV, 65 inches smaller, where you are gonna see the back of the TV and where you might see it, you know. And so that’s something that that we kind of brought that over to the U.S. with this product line. And been talking to a lot of our our our integrators about it and they’re showing it to customers and they they in many cases they want to be able to see the back of the TV. They don’t want it mounted. They want to be able to see because it’s beautiful, it really looks cool. And there are some cases where you’re challenging to where you can’t mount it. Maybe it may be up against a glass you know a glass wall or maybe against something where you’re gonna be able to to see in a window and see the back of the TV and it really has really kind of captivated designers when they see this TV they’re like that’s what I’m looking for that looks beautiful so that that that is that is really cool on how we pay attention to absolutely everything the manual the manual itself is like is is like it’s four color it’s beautiful it’s gorgeous
Rob Stott: Yeah. Yeah.
Rob Stott: It’s a book. Wow.
Jeff Costello: The remote is gorgeous on it. The pat the way it’s packaged is great. So everything about this TV just screams luxury from the moment the you know, from the moment you get the box.
Rob Stott: Yeah. Now I as you’re getting familiar with the brand and out there having conversations and introducing it to our channel, to other channels and and you know, the designers that are out there, like how different is it from you know, the way you have conversations about the brand? You know, th just how you’re talking about it is very different, I think, than when you you’re typically at a CD and and talking to a brand and how things go. So like what are those conversations like and and do they get it?
Jeff Costello: Yeah. Well it depends on who I’m talking to. You know, basically if it’s if if I’m talking to a if I’m talking to an end user. It’s basically just talking about the quality of the product, the craftsmanship, the German craftsmanship that goes into it and how it is the most luxury product in the marketplace. And that basically that there’s no plastic on the TV, that tends to resonate with people as well because everything else, every other TV out there is, you know, is loaded with plastic all over it. So it’s just basically it it’s just a better overall luxury experience. And I’m at events where I do talk to a lot of end users. And that seems to resonate for the for the same people that’ll have an affinity for, you know, a luxury automobile or, you know, have their own private plane. And don’t fly commercial, that type of stuff. That’s speaking their language. That’s going to resonate with them, right? if I’m talking to a dealer about it, one who is whose job it is to specify all these products for that individual that I just described, what I like to explain to them is that that this is something that’s actually just providing like a new category to them because because right now that they really don’t have the ability to sell TVs in the same way that they that they sell. or offer lighting solutions or shade solutions or even audio solutions. If you you look at the look at the look at the audio solutions that are available for a high-end residential AV install. You can go from you know way down here low to unbelievably expensive and everything in between. And depending on what that customer wants or needs, depending on where that customer’s you know brand preference is and everything, they’ve got plenty of stuff to show them. That’s not really the case on the TV front. The TV front it has been so price sensitive, and there really hasn’t been the ability to have something where you could differentiate and offer a luxury experience to them, top to bottom, front to back, everything luxury. And so that’s where we are now, which I think is something that it is resonating. And a lot of the dealers that we partnered with are super excited to be able to have that to showcase to their to their to their clients because it does differentiate them, quite honestly. It’s their job to show their clients what’s possible. This is what great. looks like here’s what good looks like and if you’re really econom here’s what here’s what okay looks like right you know, and they really haven’t been able to do that on the TV side.
Rob Stott: Yeah. I I’m glad, you know, we spent a lot of time talking about the TV. I think rightfully so, right? That’s what’s coming to market and how how you’re launching here in the North American market. But I know too, as we’re sitting here, it was just recently announced some new initiatives for the brand, you know, around sort of a a whole I’m gonna give you the chance to describe it, but it’s more of a whole home or not whole home, but a whole system package, I guess is how it’s being presented. So talk about that a little bit.
Jeff Costello: Yeah, we j we just announced a new group that we’re doing. And what’s cool about that is is that that You know, Loewe is all about luxury experience. Every aspect of it’s a luxury experience. But that luxury experience is despite the fact we started really with radio technology in the early 20s, that luxury experience has really been focused mostly on TVs going f you know, going forward the last, you know, 70 years or whatever. And so and most of the audio products that Loewe had had had released had really been to support the extension of the TV audio. And that’s what it basically is how can we how can we make this TV the overall experience of the TV better. It these are this is some audio products that have been made specifically to improve the TV experience. And so with the purchase of Cabasse you know, a 76 year old French company that’s a hundred percent audio and has a very similar story to Loewe, you know, rich history in France, a lot of lot of super-luxury product, a lot of first that they’ve done, a lot of technological innovation and design and everything is good. So, with that, there’s been more of a move towards towards now luxury audio as well. And I think you’ll see more of that from our company as we move forward, including this new group that’s been. setup that will really be to pursue you know luxury audio and other places like planes and yachts and super-high-end residential. And it’s just a natural extension of what we’re doing, which is expand extending the Loewe luxury experience in places where it makes sense to be. And certainly a yacht is a place where it absolutely makes sense for the Loewe experience to be. That’s a hundred percent in line with our brand positioning and the type of experience that we provide. And and the fact that that we’re doing this now, that we’re we’re able to now do this because of setting this company up and the Cabasse acquisition and everything, we’re able to to take what we’ve been doing on the TV side and also just do it exclusively on the audio side, or in some cases when it’s right, marry the two together and have a video audio solution that’s just unmatched by anybody else.
Rob Stott: Yeah, I’m glad you brought up that positioning too, ’cause I I think that’s a an important distinction or something we can even dive into. Like it is Loewe a brand, you know, when when you think about the dealer like is there a type of dealer that makes sense or a home builder that like when you’re talking about working with certain you know, a a certain profile or or right that like that end client, like, you know, who is Loewe right for?
Jeff Costello: Yeah, when when we’re dealing with resellers of Loewe, there’s really two types of resellers we’re dealing with. We’re dealing with luxury retail and luxury custom install dealers. And for luxury retail, it’s gonna be a lot of the the retailers that specify in selling the high-end stuff in the U.S. market. It’s not gonna be, you know, some of the mass-merchant people, it’s not gonna be the online guys, it’s not gonna be you know, Costco, people like that. That that’s not our brand is not going to be in those places, right? So it’s gonna be super high in luxury retail where you can go in and buy, you know, a hundred and fifty thousand dollar pair of speakers down to, you know, less expensive stuff and then have a trained professional that can explain the differences between all of it and help you pick what’s right for you. from a luxury custom install dealer, we’re really looking for people that that cater to the right type of jobs. It’s more expensive houses, obviously. we’re not Going to do a custom home or mass-market homes, those type of things. We’re really looking more at the super-luxury home market. The people that are that are already aligned from a product standpoint, the people that are selling luxury lighting, luxury audio products. I mean, if they’re selling, you know, McIntosh amps and Ketra lighting and that type of stuff, then they’ve already got the clientele to present the Loewe TVs to. If they’re selling, you know, lower end speakers and lower lower in lighting solutions and things like that, then they’re not are they’re not the right fit for us. So we are somewhat selective. We want the, you know, because because again, we are bringing the Loewe brand to the U.S. So unlike in Europe where we’ve been around for over a hundred years, a lot of times the first time somebody buys a Loewe product in the U.S. will be their first experience with the brand. And we need to make sure it’s in line with the branding that we want and the experience we want them to have. So from that standpoint, we have to make sure we’ve got the right partners on board and we’re fairly selective on who we’re bringing in.
Rob Stott: Yeah. It’s a unique opportunity. I d for a brand that’s been around so long, you kind of get to, you know, introduce it to a market and introduce it the way you want and sort of set the stage for how it’s presented here. So that’s a really cool opportunity for you guys. And I think it makes sense too, because for the dealers that do have the opportunity to, you know, specify this or or you know put this in projects, it it kind of gives them an edge, I I would think, in developing those partnerships that they want on the higher end. you know, designer and builder side of the business, to be able to say, Hey, like, hey, you know, look like we’ve got the trust of a partner that is at this caliber and and, you know, aiming to be a a certain level of luxury type brand, that you’re only gonna be able to get it through us. I I have to imagine.
Jeff Costello: That is d and and and that is exactly took the words right out of my that’s exactly the message that we tell them when they’re when we’re when we’re when we’re trying to partner with the right people and and to bring them on board is to is to basically tell that that’s part of their message to their customer is that that you know that I I only carry a few lines of TVs. The best one I carry is Loewe. They’re highly selective on who they on who they bring in as a dealer and and they’ve selected me to carry the product line because I cater to customers like you who are right for the product. And then they can showcase those customers stuff that you just can’t see somewhere else. And that makes them look better to their end users. I’m showing you something, whether it’s not, maybe it may not be right for you, whatever we think it would be. But if it’s not right for you, because you want to go, you want to do something else, you never want to spend a lot of money on TVs, you’d rather spend it on something else. That that’s okay. There’s clients like that. But but the fact that our integrators can showcase something that to their end user clients that you can’t see at other places is something that makes them look better in the client. And that’s really where the client comes to them is to see what’s possible, especially when they’re high-net-worth people. They want to see not only what’s pop they want to see what’s best, what’s the best in what’s best look like, because that’s more than likely what I want.
Rob Stott: Yeah. I it the time I to bring it back to the timing question too, like right now it seems like there’s so much going on in the display market, we’ll we’ll call it like there’s you know video walls going on. I know there’s been introductions of new like R RGB and all this sort of stuff. So like the timing of how like does that present any challenges at all to of trying to find your niche or anything like that? And then and you know, do you guys even consider that when you talk think about marketing or anything like that?
Jeff Costello: No, I mean, obviously right now the you know the micro LED TV walls are like an ex an unbelievable category right now. That category is exploding more than anything else. but it’s really not coming at the expense of luxury TVs. A luxury luxury TV category is projected to grow, you know, mid-single digits for the next five years. So that that category is still pretty strong. and the it I think I think, you know, the projector category is one I think that maybe taken a bit of a hit on what’s happening with micro LEDs, but it really hasn’t affected the TV category. And what we’re seeing in general overall is that you know maybe you’ve seen this or talked to other folks that have shared this but the luxury end of the market you know continues to thrive and get stronger in the middle tier of the market tends to get weaker right now. And I think that you’ve seen that as is I like to to to as I I tell people that you know the The luxury end of the market is really, really healthy and anything mid tier or below, it’s a knife fight to get a sale. I mean it’s a back alley knife fight to get a sale.
Rob Stott: Yes. It’s like the Sopranos over here.
Jeff Costello: Everybody’s discounting, everybody’s doing whatever they can or whatever. And that’s not a mark that’s a market that’s real that’s a market I came from. I had I had a bunch of product lines and I had some high ones and I had some mid tier and low end ones and it was and we were seeing this happen the last couple of years and it is super aggressive. There’s less business in there, everybody’s more aggressive going for it. It is just really hard to sustain and make money at that mid tier and mass-market kind of kind of home value. And it’s it but the luxury market just seems to be where it’s at. And and I I tell you that I I remember talking to a lot of dealers last year from my prior gig and I and I would ask them you know how much were your business was your business up last year? What are you projecting this year or whatever? And they were all going to be up, they were all up double digits and gonna be up double digits the this year. And then I a then I would always ask the next question, which is how many pro how many more projects are you going to do this year than last year? And usually the answer was I’m gonna do less projects. The answer is I I went from twenty-eight projects to twenty-two projects or whatever it may be, but they’re all such higher dollar value. And what I’m putting in there is more premium luxury stuff and I’m making more money off of it, which was great unless you’re the person that sold, you know, controllers to them.
That’s a man that all of a sudden, you because you you didn’t sell twenty-eight controllers next year, you sold them twenty-two controllers, right? ‘Cause your business didn’t go up, but everything around it went everything you’re controlling went up. And so that was that was a challenge that was that was happening. But that’s something that we’ve seen is that dealer, especially the smart dealers, they’re probably doing less projects and the ones they’re doing are much better projects for them, much higher dollar value and and much more premium stuff going into them. So that’s just that market just keeps pushing up and up and up. And we’re in a really good spot for that right now, the way we’re positioned. We’re not not only to ride that wave, but to help facilitate that wave. Because it’s not like we’re asking them to not sell somebody else’s $15,000 TV and sell ours. We’re basically saying that you can get $15,000 for a 77-inch TV if it is a you know, if if you’re really selling the luxury story of what it is and what it provides. And right now you’re not even getting close to that. So we’re actually accelerating that wave.
Rob Stott: Yeah. And and then also being able to expand that into, you know, with the the audio story that you’ll be able to tell so how quickly do you guys see that, you know, being coming over to North America?
Jeff Costello: So, absolutely, you know, we’ll probably have product in North America that we’ll be that we’ll be sharing with folks and everything. We’ll be it we’ll be doing some off some some little mini events and stuff that we’re doing in July on it. I think we’re probably looking at maybe CEDIA being more of our coming out party. We’ve got a we’ve got a really nice room at CEDIA, demo room that other we’re gonna have all the all the luva and all the Cabasse stuff in there will be able to showcase a lot of really cool stuff there. So I think that’s where it’ll kind start. But we see we’re already talking to customers about it. Excuse me. We we see we see a lot of similarities in the business and in where the product’s gonna be sold. I mean I think a lot of the dealers that we’ve already currently brought on board the first six months of this year for Loewe are perfect Cabasse partners. Same thing, a lot of the luxury retail, every luxury retail that we’re selling Loewe TVs in is is perfect for the Cabasse product line as well. So I think that there’s a lot of crossover. So the work we’ve already done and building relationship and everything, I think it’s gonna connect really nicely with where we’re headed as a company.
Rob Stott: Yeah, that’s awesome. I and it’s a cool story. Like again, the just the kind of blank canvas that you have coming into this market and and you know, a a blank canvas but one that’s supported by a hundred year history of success, you know, overseas. So it’s it’s it’s cool to be able to see that come here. And I I even think back to just knowing our own you know, connected designs history of being over in in Berlin and getting to see some of these brands. You’re like, Man, I wish they could come to the North American market and see it or, just I wish some, you know, Americans could get over there and see what they’ve got ’cause there’s some really cool stuff. So to see that actually play out is is pretty cool for us. And you know, I I know we’re we’re excited to continue to follow your story and everything that you guys have going on.
Jeff Costello: Yeah. we’re excited. And and honestly, I mean the I think the important thing, I think I said it early, but just just to maybe elaborate a little bit more on it is that, you know, I’m not building an infrastructure in, you know, in North America to go sell TVs. I’m building an infrastructure to ex it basically extend the Loewe global brand vision on what we’re trying to do, which is which right now is TVs and next month we’ll add in the headphones. but next year we’re also going to have a coffee maker that we have coming to the U.S., which is a really super premium coffee maker. I think it launches in Europe by the end of this summer. So we’re we’re very, very excited about that. And there’ll be other categories we’re looking at as well. So we really want we want the Loewe name to be known as like when you th when you hear the Loewe name, we want you to to immediately think of you know the the pre you know the luxury electronics company out there that basically the number one luxury electronics company out there that when you hear Loewe, you know that it’s luxury and you know it’s a best in class experience for whatever electronics product we’re bringing out. And and there’ll be more stuff that’s coming. I mean, I know other things they’re working on, but you know, within five years, there’ll be even more cool stuff that’s coming out. And there’s also a lot of really cool development that’s happening on the Cabasse stuff. So there’ll be more, there’ll be there’s there’s neat product that was that was just recently developed by Cabasse before we bought, but there’s more neat stuff that’s coming out that I think will be really game changing for what we’re able to do for for the target customers we’re bringing on board now. So this is all stuff we’re looking forward to sharing with partners when we get to when we get to have those conversations here in a couple of months.
Rob Stott: Yeah, it’s I mean it’s it’s cool too. I I’m glad you brought that up because it’s it’s a you know, an important point to make for those listening is that, you know, yes, that’s it’s a display story right now, but this is this is really just the beginning. And it and it shows c sort of I I I hope the connotation doesn’t come off as wrong, but like it’s a calculated approach, right? And how you’re coming into this market and you know, you’re doing it at a a paced sort of way so that it that you’re not oversaturating and and really telling like a a mumble jumbled story as opposed to like s taking those baby steps into what you know this North American market will be, you know, over the next coming years. So I I mean, case and but it’s gonna be a great story to follow and and we’re excited to to be along for the ride. So Jeff, this was awesome. I I really appreciate you taking the time and and sharing the start of your story, the preamble maybe of of what Loewe is gonna be here in the U.S.
Jeff Costello: I appreciate it too. It’s been a lot of fun. It’s great, great getting to talk to you about it and love to do it again sometime soon.
Rob Stott: Absolutely.
