Shaun Pennington talks about possible acquisitions for his company in the D2C space and shares his philosophy on the power of gratitude.
Transcript
Dave Perry
Look to side camera. We’re in and out of A. B is on you the whole time. But when you and I talk, we should just kind of talk like this. Hey, it’s Dave Perry. And welcome to another “Take 5 With Dave” ISPA EXPO Show addition. Sean Pennington, welcome to the show.
Shaun Pennington
Good to see you, Dave.
Dave Perry
Great seeing you. And there is a really exciting word that we’re going to talk about and the word is acquisitions. Take it away.
Shaun Pennington
Yeah, you were asking me about what we’re looking to do over the next 18 to 24 months. We’re going to be looking at some acquisitions. Both in the direct consumer space as well as potential wholesale opportunities, manufacturing opportunities. So that’s one of our growth strategies is to partner with great people and look for some opportunities for acquisition.
Dave Perry
Now, I got to ask you, the D2C space, why would you want to acquire? I mean, I kind of know, but why would you want to acquire D2C company?
Shaun Pennington
For me, you know, we’ve tried to create our own D2C brands and it’s been a challenge. I mean, it’s a different market, it’s a different segment, different skill set. And so if we can find somebody that’s already successful, that’s looking to partner with a great manufacturer to create vertical integration and opportunities, it’s a great opportunity for us. You know, whether that’s a minority opportunity, a minority share opportunity or a majority share opportunity, we’re open to both.
Dave Perry
Valuations in the D2C space right now are favorable for an acquisition, do you think?
Shaun Pennington
I think so. I mean, I think when you see what’s happened with Casper and Purple, you know, they haven’t performed quite as well in the markets as I think they would have liked. And I think that opens up opportunities. And I think, you know, people are recognizing that some of the costs for acquisitions are higher even now than they were before.
Shaun Pennington
We’re looking ahead. You know, you’ve got high inflation right now. You’re going to have consumer product increases going on that might slow down some of the purchasing demand. And so right now, going vertical, creating cost optimization, optimizing your EBITDA, those are going to be things people are looking for.
Dave Perry
OK, in terms of new product, what’s the product direction going to be?
Shaun Pennington
Right now, we’re looking at smart beds. So we’re going to be launching a smart bed by the end of the year as our goal. And then also we’ve just launched some programs with Technogel. So we have some great exclusive products with Technogel that will be rolling out and we’re really excited about it.
Dave Perry
Tell me what the Technogel products look like.
Shaun Pennington
So the current product is called our Coudtech brand, and it actually looks like a traditional mattress so we’ve used high-level quilting layers with cooling foams and fabrics on there. And then where we designed a new layer with Technogel. It’s medical-grade Technogel, but it’s underneath the quilting. So you really get a lot of that heat benefit and you still get all the airflow from the quilting.
Shaun Pennington
And so far the response has been phenomenal.
Dave Perry
Wow. Well, as we wrap up, I want you to talk about something that is maybe one of the secret weapons, at Diamond. Gratitude beads. Take it away.
Shaun Pennington
Oh, yes, gratitude that is I mean, honestly, I think gratitude is one of the keys to life. You know, in general, all the science shows that the more gratitude you have in your life, higher levels of happiness, lower levels of stress. And for me, I use it all the time. I mean, I don’t have my beads on today but I keep them in my pocket.
Shaun Pennington
I got my Mali here that I’ve had for over 20 years. And if I’m having any insomnia or not sleeping well, I start counting my blessings, start remembering all the good things in my life. I go right to sleep. Yeah.
Dave Perry
Well, I have gratitude toward interesting people like you who share their stories with us. Great being with you, my man.
Shaun Pennington
Thank you, brother. Appreciate your thoughts.
Dave Perry
Let’s exude gratitude.
