The Christmas Tree Hugger
NO DEAL
EPISODE SUMMARY
🕓 Air Date: December 3, 2017
Asking For:
$100,000 for 20%
Investor:
No Deal
Deal:
No Deal
PRODUCT SUMMARY
The Christmas Tree Hugger is a decorative cover for the base of artificial Christmas trees, transforming them into a more natural and festive appearance.
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Background Story
Ryan Kenny, an art director in advertising, identified the issue of the unattractive base of artificial Christmas trees and created The Christmas Tree Hugger as a solution. Upon buying his first artificial tree with his wife, they noticed the unsightly pole at the bottom, prompting Ryan to create a prototype to enhance its appearance.
Positive feedback from friends led him to sell the product online, and eventually, he secured a deal with QVC. Despite initial success, a Kroger order did not perform well in stores, but the experience taught valuable lessons. Ryan’s determination and hands-on approach, including making cold calls, brought The Christmas Tree Hugger to market.
The Product
The Christmas Tree Hugger is a decorative cover designed to conceal the unattractive base of artificial Christmas trees. Made of fabric, it easily wraps around the base, resembling the bark of a real tree.
The product comes in various designs, including classic brown bark and birch bark, and can be reversed to a candy cane pattern for a festive look.
Besides aesthetic improvement, The Christmas Tree Hugger offers practicality by allowing users to conceal messy cords by running them through the cover. The product is positioned as an easy and quick solution, comparable to putting on an ornament.
How It Went
The company’s position before Shark Tank
With a year and a half in operation, The Christmas Tree Hugger has generated $50,000 in sales, primarily through online channels and a successful appearance on QVC during the Christmas July sale, where 1,000 units were sold in 5 minutes. The product is priced at $17.95, with a production cost of $1.37, indicating healthy profit margins.
While a Kroger order for 130 stores and 1,500 units initially seemed promising, it only sold through 40%, prompting doubts about the product’s retail viability. The company has considered improvements and remains optimistic, projecting $220,000 in sales for the current year, with an estimated profit of $110,000.
The Negotiations:
The Sharks expressed skepticism about the product’s market appeal, with Kevin and Barbara opting out early in the pitch. Despite initial positive feedback from Robert and Lori, all Sharks ultimately declined to invest, citing concerns about the product’s scalability and market demand. Mark Cuban admired Ryan’s hustle but advised him to pivot, emphasizing the importance of responding to market signals.
The negotiation ended with no deal, but Ryan’s determination and positive attitude remained intact. The Sharks’ criticisms did not deter him, and he left the tank with a commitment to persevere and continue building his business.
