Hearth & Home October 2017

L to R: Claude and Denise Quirion, and son Marc.

Canadian Leaf Right Place, Right People

By Richard Wright

At L’Attisee, Claude, Denise and Marc make it a family affair, but in a very professional manner.

Photos: ©2017 MCM Photography. www.mcmphoto.ca.

L’Attisēe: the beginning of embers in a fire.

Ed. Note: L’Attisēe was founded in 1981.

In 1988 it was bought by Jacques Brunelle.

In 2004, he sold the store to Claude and Denise Quirion.

In 2014, Marc Quirion joined his parents as part owner of L’Attisēe.

Once he sold the store in 2004, Jacques Brunelle continued to work with the Quirion family; now he is slowly going into retirement. But his daughter, Lynn Brunelle, still works there and, according to Marc Quirion, she is “a pillar in the organization.”

When Claude Quirion bought the fireplace shop L’Attisēe in St. Hubert, Québec, he knew nothing about the industry – but he did know how to sell.

Claude had been in charge of worldwide sales for a Canadian furniture manufacturer. In that position, he traveled throughout Europe, South America, the U.S. and Canada, selling primarily to Big Box stores such as Costco, Sam’s Club and Sears.

But when he was 49 years old he became tired of traveling.

“I said to my wife, let’s find some small business so we can enjoy life. Well, I missed that one because I had to keep working. We had to learn the industry, the business.”

In 2008, the U.S. was hit with a Recession, and the resulting downturn impacted the U.S. hearth industry very hard. Not so with Canada.

“We were never in a Recession,” says Marc, “but people were more diligent with their money. New construction went down; people were not buying new houses. But usually when you see new construction going down, renovations go up. So without being great years, our business volume didn’t go down, but it didn’t grow as much as we would have liked.”

According to Claude, the best period for the company’s sales was “just before I bought it (isn’t that always the case?). Since I bought the store, I go every year to the HPBExpo. I remember seeing the statistics from the HPBA back in 2005, 2006, that the industry was going down.

“Back in 1998, the eastern part of the country had what they called ice storms, and lots of retailers in early 2000 got the benefit of that. By the time I bought the store at the end of 2004 that wave was gone. The store has always been going up since then, but the industry, in general, is a bit softer.”

It has been about four years since the Canadian loonie was worth more than the U.S. dollar, but it seems to have had little impact on hearth shops in Canada. “A while back, the Canadian dollar went to $1.06; a few years ago it went down close to 70 cents,” according to Claude. “Now it is more in the 78 to 80 cents range. Now, Canadian manufacturers’ prices are more stable for us, and for the consumer. U.S. products are affected negatively with those variations.

“We have a good group of Canadian manufacturers that we can buy from, and we also have U.S. manufacturers that manage to produce unique products that we can still sell well, even if the dollar is more expensive.”

The centerpiece fireplace is from JC Bordelet.

The showroom at L’Attisēe is 7,500 sq. ft., and the owners take full advantage of that luxury by stocking a wide variety of brands from both Canada, the U.S. and beyond. In fact, there are at least 23 brands in the store. If a customer cannot find what he/she wants in a fireplace in L’Attisēe, they probably weren’t serious to begin with.

Note: The median sq. ft. devoted to hearth products in specialty stores throughout North America is 2,000.

Claude takes obvious pride in being “100% focused on fireplaces. We want to be a destination for people – consumers or professionals such as architects – who are looking for a fireplace,” he says. “When they walk in the store what they see is fireplaces and stoves and inserts of all combustibles – wood, gas, pellets and electric.”

“We do carry a lot of lines,” says Marc, “but there are many lines that we do not carry, and the objective is to reduce the number of lines we carry. It’s a work in progress. It’s something that we initiated about two years ago. It’s something that we do in a certain time frame.

“We exchange brand visibility in our showroom, so instead of having one or two units of each brand, we’ll give a brand close to complete visibility. Let’s say the brand carries eight models, we’ll give it six or seven spots in exchange for territory protection so our salespeople become experts in that brand. For example, they may become experts in Kozy Heat or experts in Enviro or Kingsman. Our salespeople then become brand ambassadors at the same time.”

“If you look at those brand names.” says Claude, “there are a bunch of them that are dedicated to a high-end market, such as DaVinci, Town & Country, Flare, Bellfires, Spartherm. They all relate to a specific market where the consumer that we are aiming for would want a fireplace for $10,000, $15,000, or $20,000. It doesn’t matter. It’s a percentage of the value of the home. It makes as much sense for somebody who buys a $25,000 fireplace for his $2.5 million home as it does for somebody who buys a $5,000 unit for a $500,000 home. It still addresses 1% of the value.”

L to R: Spartherm, vertical Bellfires, horizontal Bellfires.

“If we analyze our brand strategy,” says Marc, “we carry about six or seven high-end brands. Those units represent a third of the brands on our showroom floor, but they only represent about 15% of our gross annual sales. And those brands have between one and two units per brand versus Kingsman or Heat & Glo or Enviro or Kozy that have eight, nine or 10 units on display per brand.”

Situated across the water from Montréal, L’Attisēe draws primarily from the 1.7 million residents of that city, and it’s possible that Montréal could be receiving more newcomers now that both Vancouver and Toronto have imposed tax penalties on foreign homebuyers.

“But Vancouver and Toronto are very unique situations in Canada,” says Marc. “The average home price in Montréal is about a third of what it is in Vancouver, and about half of what it is in Toronto. The growth in both of those cities has been affected by their economies, and also by foreign buyers of homes. In Montréal, because of the language (French), we haven’t seen that much growth, but it seems as if it could be the beginning of something.

“Montréal becomes the third most logical city for foreigners to buy into. Right now, construction is a problem in the city, but on the upside the economy in Montréal has never been this good because so many people are working good jobs and the unemployment rate is at its lowest since 1976. The economy is great right now in Montréal.”

There’s another factor that is “great right now” in Montréal. After living under a wood-burning ban since 2009, new units testing at or under 2.5 gph are now allowed as of August 2015.

“The ruling also says that whoever has a wood unit has to declare it by Oct. 1, 2018, or they won’t be able to use it anymore,” says Claude. “So if you have an old fireplace that was installed in the 1980s or 1990s, as of Oct. 1, 2018, the only time you will be able to use it is if there is an electricity shutdown of more than three hours.

“This is going to be a good opportunity for all the Montréal area dealers. Now people are calling us, and we can update our wood units and retain the right to use wood. That has created a good momentum for us here in Montréal.”

“Realistically,” says Marc, “it is impossible for the whole city to change fireplaces by that date (there are arguably 50,000 wood-burning appliances in Montréal). Mostly it’s a question of budget. We expect this wave is going to last probably between five to 10 years. People are just going to either stop using their fireplace, or keep using it and hope they don’t get caught, and maybe replace it in 2021 or 2022 when it is convenient for them.

“I think the October date as a deadline is going to probably bring a wave of business this fall and this winter, but it’s going to be a long-lasting wave because there are just way too many units for the local industry to absorb.”

In the relatively short time from August 2015 until now, wood-burning appliance sales have become 40% of L’Attisēe’s business. It was always strong in areas beyond the city limits of Montréal, but now the Quirions believe it can reach 50% of their business.

L to R: Bellfires, Town & Country, Bellfires and Stûv.

“We are not only doing Montréal,” says Claude, “but we are growing all sides of our business. We keep working our regular lines such as Heat & Glo and Marquis. We also keep working with the professionals because we want to be the destination where everyone wants to shop before they make their final decision. Our goal is to become a destination of choice, a place you cannot avoid before making your fireplace decision. That is how we word all of our advertising.”

L’Attisēe has 11 full-time employees, but if independent installation subcontractors are counted, the figure rises to close to 20. There is one in-house installation team in that number. Asked about the company’s main strength, Marc cites the consumer experience when they enter the showroom.

“Obviously,” he says, “it begins by catching them on the Internet, with a good web strategy. But that is basically only 10% of the deal. When you’re buying a fireplace, 90% is about building trust, because we’re playing with fire. We are doing renovation projects. We are into peoples’ homes. So our goal is to have great salespeople, professional salespeople with pro-consumer vision, people who can serve our customers well by being professional, but also by answering questions accurately and honestly.

“We do provide an experience such as a beautiful showroom. This might be perceived as a tiny, perhaps stupid detail, but the fact that we clean our showroom every week means there is no dust in our showroom.

“We’re also not mixing and matching a bunch of products which makes the showroom look like a convenience store. Even though we have many units and many brands, our showroom is kind of purified. It’s breathing. So when consumers come in they feel comfortable, they feel like they are buying at the right place and from the right people.”

“I think the business has changed a lot in the last 10 years. From the 1970s to the early 2000s, a wood fireplace or a gas fireplace was more of a commodity. You bought it to feel secure. You bought it to maybe lower the heating bills. Now we’re a luxury business. We don’t sell cheap fireplaces anymore. Our average deal is close to $6,000 and we do deals over $10,000 frequently in a month. So we are selling a dream now. We are selling units that people want and desire. You can’t sell a unit like that when there is a vacuum next to it and it’s dusty. You need to put it in an environment where it is sexy and attractive and creates desire.”

“We insist that we all smile on the phone so people feel welcome,” says Claude. “When people walk in the store, we want them to say, ‘Wow. I made the right decision to stop by.’ The minute they walk in the store we want them to feel at ease. These are the details from the first contact with our store, to the delivery of the product, starting the unit and service.

“When I bought the store in 2004, I knew that I wanted every customer to come by before making their final decision. They might not all buy here; I might not have the brand name they want. But my goal is to get them to stop by. My other goal is to have everybody in the industry wanting to work at L’Attisēe. And the third goal is to have either distributors or manufacturers wanting to sell to L’Attisēe.

“We’ve been working with each one of those three goals constantly over the past 12 years, to improve the customer experience, improve our relationships with our partners and suppliers, and make sure we have the best employees and installers. We want professionals. They are our contact with the consumer. We know how to get the people in the store. After that we have to constantly improve their experience with us.”

Those are all key goals to have, and rather lofty. With Marc in the business now for three years, he is able to bring his knowledge of how the automotive industry functions, which is very aggressive, structured and well taught. Claude clearly brings years of experience from his position as head of Sales for a large, worldwide furniture company, and all of that is backed up by the firm hand of Denise, Claude’s wife, who is in charge of finances.

With 7,500 sq. ft. of showroom space, L’Attisēe is able to floor 140 units, which includes gas, wood, pellets and electric fireplaces. There are perhaps 40 to 50 wood units (fireplaces, stoves & inserts), with six or seven burning. All of the gas units are burning.

“We are mostly a fireplace company,” says Marc. “We barely sell any stoves. I believe the stoves are probably more of a product for rural areas than cosmopolitan areas.”

Surprisingly, according to Marc, contemporary styling is not in great demand. “Square fireplaces with wood logs are quite popular,” he says, “but what is not popular are the brick panels. We sell a ton of square log fireplaces with enamel or black porcelain panels. That’s quite a seller because linear fireplaces mostly come in 40 in. and that’s a lot of Btus; you need quite a big room to install a linear fireplace.”

The fire pit is from Outdoor GreatRoom Company; the two contemporary stoves are from Stûv and Jøtul.

“A clean look,” says Claude, “There is a clean face in the black panels so people get the best of both worlds. We don’t sell any more louvers, just a few a year. The same thing in wood. Wood is clean face. We might have some exceptions. We sell Stûv in the wood. We sell Renaissance from ICC. We sell some of the Valcourt contemporary looks. Even in wood we see that – clean face, clean vision.”

“Glass and rocks are a trend,” says Marc, “and trends phase out. They phase in and they phase out like any clothing trends or car trends. Fire comes from wood and I think that is not a trend.”

With 20 electric units on the floor, it seems logical to assume they are good sellers. But not so, says Marc. “Electric fireplaces are a nice type of business because it’s an easy, cash and carry, no hassle-type business. Claude introduced a fireplace department a long time ago and it grew for some time, but now every fireplace shop sells electric, so the market has probably grown, but for us it has stopped growing in the last few years because there are so many competitors selling that category.”

L’Attisēe does work with builders, but small ones. They cite the facts that big builders can go bankrupt, they don’t pay their bills, and they want cheap, cheap, cheap fireplaces. “We focus on more high-end builders,” says Marc, “those that produce homes in the mid-million dollar price range, which require more customization and the customer can choose his or her fireplace and has more of a $5,000 to $6,000 budget.”

Expanding the business by forging partnerships with professionals allied to the hearth industry, such as architects, designers and landscape architects, is the purview of Claude, and something that he used to do for the business. Now he has that luxury again. Consider Claude the outside man, and Marc the inside guy.

“I take care of the whole retail operations,” says Marc, “installing, selling, and marketing. Claude is out there building partnerships with architects and contractors, expanding the business. We’ve been experiencing growth in the last two years, mostly because we can now spread our message out to a larger audience.”

A variety of gas stoves are ready for customers’ inspection.

L’Attisēe is part of a Marketing/Buying group made up of 22 retail companies and 23 stores, all in the Provence of Québec. It’s called Actions Multiflammes, and was founded in 2006. Claude is in charge of Marketing, and says that “for us, the organization was one of my very good decisions in the past 12 years. Right now, we are a good group, and we have good momentum.”

The Zero Net program in the city of Vancouver is cited as a problem by both Marc and Claude, as is a quite different program than the Net Zero program in the state of California. “Both of those programs are big problems,” says Marc. “I believe wood fireplaces are clean units and they use a renewable combustible. Where energy is produced by nuclear power, wood is a good alternative, whether it’s pellets or just logs.

“But what is going on with gas, and homes that are becoming more and more sealed and energy efficient, is dangerous to the industry. Any fireplace becomes a flaw in the system as it must puncture the envelope. That’s scary. The Green movement is going that way, as it must, but where does a fireplace fit in? I honestly have no idea, and we don’t know where this industry is going to be in 20 years, that’s for sure.”

One of the biggest threats to the hearth industry is one cited by Marc with the keen eye of someone relatively new to the industry. It’s dealer profitability. No doubt all of us have watched specialty stores go out of business by simply closing their doors. They were unable to attract a buyer, and no family member was interested in running a hearth shop.

“I’ll speak for Québec,” says Marc, “I don’t know the rest of North America. I see that this is a business that requires a lot of expertise and contains high risks unlike, for example, window installers or a retail business that sells TVs or sofas. We have higher risks when we go into homes, and high responsibility, and the margins aren’t there that would make sense for us to run this type of business.

“A lot of the old guard is going into retirement in the next few years, and a business is only worth its profits. If businesses cannot make a proper profit, they cannot be sold. I think that is probably one of the biggest threats that we can control – ensuring that our businesses are more profitable. That starts with how much we charge to install a fireplace, for example.

“I still see businesses today that charge $450 to install a fireplace without gas lines, just the install, which is ridiculous and doesn’t make sense in terms of profitability. It doesn’t make sense when you pull out a calculator and start calculating all costs incurred with two men and a truck and tools and so on. I don’t know if it is a problem for the rest of North America, but in Québec we see fireplace stores shutting down and, unlike malls or other types of businesses, we don’t have the Internet that is here to drive the prices. We just do it by ourselves.

“It shouldn’t have to be like that if it’s a business that runs with a decent rate of return on sales. A decent return on sales is after you pay yourself a salary there are four, five, six, seven points of percentages left at the bottom that generate the profit for you, and that should be after you put some money aside for your eventual retirement.”

“The hearth industry is still very young,” says Claude, “and it’s the first guard that are starting to retire. They worked hard all those years. They put their money on the table, but they stayed a one-person organization. Now they want to sell and they realize that they didn’t build a business. They worked a business; they had the volume but they don’t have a business to sell. They have inventory to sell.

“As Marc said, the margins are not logical for this. It’s tough to put a general manager on or to hire a director of operations. Some of us have done it, but most are still one-man operations.”

SNAPSHOT

Store Name: L’Attisēe

Street: 4175 ch Chambly

City/Province: Québec

Owners: Claude Quirion, Denise Quirion, Marc Quirion

Key Executives: Claude Quirion, Denise Quirion, Marc Quirion

Year Established: 1988

Web Site: www.attisee.com

E-mail: E-mail

Phone: (450) 445-0041

Number of Stores: 1

Number of Employees:
Full-Time: 10
Part-Time: 8

Gross Annual Sales: Indoor: $3 million

Sq. Ft. of Building Space:
Showroom: 7,500
Warehouse: 2,500

Lines Carried:
Hearth: Enviro, Marquis, Kozy Heat, Mendota, Bellfires, Flare, DaVinci, Dimplex, Amantii, Modern Flame, Valcourt, Enerzone, Quadra-Fire, Vermont Castings, Jøtul, Harman, Stûv, Town & Country, Piazetta, Spartherm, Lopi, Renaissance/ICC, Regency

Advertising % of Gross Revenues: 3%

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