-
OCTOBER 2015 HEARTH & HOME 29
lying under the radar has beena successful strategy for
Sher-wood Industries. Since its start
in 1989 as a small wood stove manu-facturer, Sherwood has grown
into oneof North America’s largest and mostsuccessful,
privately-owned hearth prod-ucts companies; it now offers a
completeline of wood, gas and pellet stoves,inserts and
fireplaces.
But there is a downside to beinginconspicuous: it has kept many
potentialcustomers from knowing Sherwood andits Enviro brand.
“We prefer to fly under the radar,”admits Cherbel Yousief,
president andCEO. “We like to keep our head down,work hard, service
our customers andearn their business.”
Yousief, along with brothers and for-mer owners of Osburn
Manufacturing,Tom and Martin O’Connor, started Sher-wood Industries
26 years ago as a woodstove manufacturer in Saanichton,
BritishColumbia, 10 miles north of Victoria onVancouver Island.
Within a year thecompany expanded into pellet stoves and
then, in 1993, into gas hearth products. After years of strong
growth in all
three hearth products categories, Tomand Martin retired and, in
March, 2015,Yousief, along with Martin’s son StuartO’Connor, who
had been with Sher-wood since 1996, purchased Tom andMartin’s
shares.
Yousief, as president and CEO, nowhandles finance and strategic
planningwhile Stuart, now vice president, directssales, marketing
and product develop-ment. Sherwood’s factory and head-quarters,
still in Saanichton, have grownto cover 92,000 sq. ft. and the
companyhas about 200 employees.
“A lot of people think we’re just apellet stove company, but
that’s nottrue,” Yousief says. Today pellet stovesaccount for 55
percent of Sherwood’ssales, with gas-burning products totaling32
percent and wood-burning modelsmaking up 13 percent.
Freestanding stoves, including pellet,gas and wood, account for
50 percentof Sherwood’s business, with fireplaceinserts totaling 35
percent and fireplaces
28 HEARTH & HOME OCTOBER 2015
Earning
BUSINESS
FBy Bill Sendelback
The Canadian Hearth Business
President & CEO Cherbel Yousief (right) gets an update from
one of Sherwood Industry’s designers.OPPOSITE PAGE: The new P3
awaits inspection and crating alongside the Meridian cast-iron
pellet stove.
PHOTOS: ©2015 VISIONS WEST PHOTOGRAPHY.
WWW.VISIONSWEST.BC.CA.
In a very quiet manner,Sherwood Industries has builta
substantial business sellingwood, gas and pellet appliances;sales
have increased over 50percent in the past two years.
the
-
28 HEARTH & HOME OCTOBER 2015
Earning
BUSINESS
By Bill Sendelback
The Canadian Hearth Business
In a very quiet manner,Sherwood Industries has builta
substantial business sellingwood, gas and pellet appliances;sales
have increased over 50percent in the past two years.
the
-
OCTOBER 2015 HEARTH & HOME 29
lying under the radar has beena successful strategy for
Sher-wood Industries. Since its start
in 1989 as a small wood stove manu-facturer, Sherwood has grown
into oneof North America’s largest and mostsuccessful,
privately-owned hearth prod-ucts companies; it now offers a
completeline of wood, gas and pellet stoves,inserts and fireplaces.
But there is a downside to being
inconspicuous: it has kept many potentialcustomers from knowing
Sherwood andits Enviro brand. “We prefer to fly under the
radar,”
admits Cherbel Yousief, president andCEO. “We like to keep our
head down,work hard, service our customers andearn their
business.”Yousief, along with brothers and for-
mer owners of Osburn Manufacturing,Tom and Martin O’Connor,
started Sher-wood Industries 26 years ago as a woodstove
manufacturer in Saanichton, BritishColumbia, 10 miles north of
Victoria onVancouver Island. Within a year thecompany expanded into
pellet stoves and
then, in 1993, into gas hearth products. After years of strong
growth in all
three hearth products categories, Tomand Martin retired and, in
March, 2015,Yousief, along with Martin’s son StuartO’Connor, who
had been with Sher-wood since 1996, purchased Tom andMartin’s
shares. Yousief, as president and CEO, now
handles finance and strategic planningwhile Stuart, now vice
president, directssales, marketing and product develop-ment.
Sherwood’s factory and head-quarters, still in Saanichton, have
grownto cover 92,000 sq. ft. and the companyhas about 200
employees.
“A lot of people think we’re just apellet stove company, but
that’s nottrue,” Yousief says. Today pellet stovesaccount for 55
percent of Sherwood’ssales, with gas-burning products totaling32
percent and wood-burning modelsmaking up 13 percent. Freestanding
stoves, including pellet,
gas and wood, account for 50 percentof Sherwood’s business, with
fireplaceinserts totaling 35 percent and fireplaces
F
President & CEO Cherbel Yousief (right) gets an update from
one of Sherwood Industry’s designers.OPPOSITE PAGE: The new P3
awaits inspection and crating alongside the Meridian cast-iron
pellet stove.
PHOTOS: ©2015 VISIONS WEST PHOTOGRAPHY.
WWW.VISIONSWEST.BC.CA.
-
at 15 percent. When asked about thecompany’s total annual sales,
Yousiefsimply replies, “Very healthy,” but hedoes reveal that,
“We’ve been on agrowth pattern. In 2013, we had 28 per-cent sales
growth, and in 2014 we hadabout 22 percent growth.” For 2015, he
has forecast 15 to 20 per-
cent growth, and through the second quar-ter, “We’re on target
with a 12 percentincrease and record high early-buy orders.”Sales
have been increasing across all
its product lines even as Sherwood heavilyexpands its Enviro gas
line. “In 2013,our sales strength was mostly from ourexisting stove
models,” Yousief explains.“But this year it is different. We
don’tknow whether it’s from pent-up demandor that all the new
products we introducedlast year are finally showing up and
beingburned in our dealers’ showrooms.”
Sherwood sells through two-stepdistributors to reach its
dealers, andYousief sees this as a competitive advan-tage. “Going
through distribution hasbeen a very, very stable business modelfor
us,” he says. “So we’ve been totallydedicated to going through
distributors,even in our own backyard.” Most of the company’s
distributors
have been with Sherwood for a longtime, some as long as 25
years. “Eventhough our margins are slimmer, goingthrough
distributors is key for us,” saysYousief. “We’ve kept our
distributorsfor so long because we service the heckout of our
customers, and we are veryfocused on staying in tune with
theirneeds. We keep a very tight, strongrelationship with our
customers so theirfeedback gets to us quickly.”
Sherwood also has been selling itsproducts overseas since 1992,
in NewZealand, Australia, South Africa, Spain,France, Ireland, UK,
Germany, Norway,Sweden and Japan. “We were one of the first
manufac-
turers to sell pellet stoves in Europe,”says O’Connor, “but
we’ve pulled backin some of these markets so we canreally focus on
our North American cus-tomers. And, frankly, exporting is notvery
profitable due to the complex testingrequired in all the different
markets.”It has only been in the last three
years that the company has begun takingon more distributors in
North America.“We wanted to make sure that we hadthe manufacturing
capacity and serviceassets to take care of new customers,”says
O’Connor.Three factory sales managers work
with the company’s network of distrib-utors in the U.S. and
Canada, callingon dealers and conducting training ses-sions. “We
are very focused on technicaltraining for our distributors and
theirdealers,” says O’Connor. “That separatesus from our
competitors. We conductdealer meetings once or twice a yearto
review our products and get theirfeedback on market trends and our
direc-tion for the future.”Longtime Sherwood customers appar-
ently agree with the way the companyinteracts with them;
Associated EnergySystems in Kent, Washington, wasprobably
Sherwood’s first distributorcustomer.“We started with Sherwood the
day
they made their first wood stove,” saysAES president Kirk Newby.
“They hadvirtually no machinery, and we wereshowing prototypes to
our dealers.”Newby says that Sherwood has a stylethat works for
him.
“With some companies, particularlylarge ones, you are just a
number. Welike doing business with a companywhere we can talk to
the decision makersand they want to talk to us. Sherwoodis
customer-focused and open to hearour input. The company is willing
tocommunicate its plans so we can bothbuild a better business
model.”Russo Products in Randolph, Mass-
achusetts, a Sherwood distributor since1990, says Sherwood cares
about itscustomers, according to presidentRichard Russo. “Sherwood
wants toknow what’s going on, what is sellingand how it can make
its products better.They are always trying to develop some-thing
better than what is on the market.”He raves about Sherwood’s sales
staff.“They have the best sales people I haveever worked with,
particularly LouieFalco, their sales manager.”“We can always reach
Cherbel or
Stuart,” says Don Hiebert, sales managerfor Concorde
Distributing in Abbotsford,British Columbia. “You can’t do that
with larger companies. Sherwood is veryhands-on and able to
communicate withus. They listen to us, good or bad, andthey are
investing in their manufacturingto further improve their
products.”Yousief also mentions Sherwood’s
investment in its factory.
30 HEARTH & HOME OCTOBER 2015
The Canadian Hearth Business
Freestanding pellet stoves in mid-assembly.
Cherbel Yousief (left) and Vice PresidentStuart O’Connor (right)
outside theproduction facility.
Model Q3.
-
“This year we went heavily into newequipment, allocating $4
million,” hesays. During the recession, Sherwood“hunkered down” and
watched inven-tory, expenses and margins in order tobuild up its
reserves to invest in equip-ment when the recession was over.
“We’ve invested in more efficient
equipment that should boost our man-ufacturing efficiency by 20
to 30 per-cent,” Yousief says. “That is really therecipe for
success because in this wholeworld economy, he who can
produceefficiently, build the right products anddeliver them to the
market with strongcustomer service is going to earn thebusiness.
That is what we are focusing
on. We have to provide value to thecustomer at a good price.
We’re notinterested in building low-end productthat is sold in mass
volume.”Sherwood’s Enviro brand of hearth
appliances sells in the medium/highprice range, according to
Yousief. Thecompany introduced its Westgate linein 2006 as a
luxury, high-end line. “Butthat was the wrong category for us,”he
says, “so we blended it into ourEnviro line.” Then Sherwood
introduced its
Vistaflame line as an alternative to Enviro,with some aesthetic
changes. “It did verywell, but we’re of the opinion that weneed to
be more focused on our Envirobrand than to offer new brand
names.That decision was made two years ago,and it’s really paying
dividends.”
“Our Enviro brand is well knownas a leading pellet stove, and
that hasbeen one of our biggest challenges,to be known as a
full-line supplier,”says O’Connor. “Over the last fouryears we’ve
invested heavily into gas,and our sales have been growing veryfast
in that category. The goal is toprove to our customers that we
areproducing impressive products in eachcategory, not just in
pellet stoves.”This year has been busy for Sher-
wood’s R&D department, developingfive new models including
two pelletstoves and three gas models. The com-pany’s new Meridian
Cast Iron is a45,000 Btu input pellet stove with cast-ings from
Belgium. The new P4 pelletstove is a larger version of
Sherwood’s
popular, contemporary P3. New gasmodels include the Westport
Steel, a30,000 Btu stove, the modern-styledS30, a 20,000 Btu stove,
and the clean-faced Q3 gas fireplace with 35,000Btu input and the
industry’s onlyadjustable rear vent collar for
easierinstallation.“We’re seeing contemporary designs
come on strong,” adds O’Connor.“That’s why we came up with our
P3pellet stove and this year our P4 pelletstove and S30 gas stove.
I personallylike contemporary design, but ulti-mately the consumers
will decide withtheir wallets.”Sherwood recently ventured into
grills with its Black Olive kamado-style pellet grill and
smoker, then fol-lowed with a charcoal version with anautomatic
starter. “We wanted some-thing to sell in the off-season for
thehearth industry,” Yousief explains.“Over the past two years
we’ve seenquite a lot of sales, but sales are notyet where we want
them to be. Thatcategory is very, very competitive.” With today’s
lower oil prices, Sher-
wood, like most hearth products man-ufacturers, wonders how it
will affectsales, particularly for pellet stoves thatseem to be the
most sensitive to fuelprices. “We’ve seen our pellet stove
sales
stronger this year, month over month,”says O’Connor. “I think
everyone feelsthat oil prices will go up again. It’sjust a matter
of time.”
32 HEARTH & HOME OCTOBER 2015
The Canadian Hearth Business
Stuart O’Connor (standing) reviews pelletstove electrical
installation with a memberof the production line.
Black Olive kamado.
Blower units are prepared and tested in the parts department
before shipment.