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Hearth & Home March 2018

Franklin D. Roosevelt, the 32nd President of the United States (1933–1945), the man who started Fireside Chats.

Fireside Chats

By Richard Wright

Photo COURTESY: ©2018 National Archives and Records Administration.
Franklin D. Roosevelt Presidential Library & Museum.

It was a very good year for hearth product sales, according to the three manufacturers we interviewed. One had their best year ever; one is forecasting 50% growth in 2018, and one went from zero to 60 stores.

Undoubtedly, Franklin D. Roosevelt would be in any list of the best, and most important, U.S. presidents. He served as president from 1933 until 1945, during which time he led the nation through the Great Depression, expanded the role of the federal government in the nation’s economy with his New Deal legislation, and provided intelligent leadership during the Second World War.

From March 1933 to June 1944, Roosevelt addressed the American people in some 30 speeches broadcast via radio, speaking on a variety of topics from banking to unemployment to fighting fascism in Europe. Millions of people found comfort and renewed confidence in those speeches, which became known as the “fireside chats.”

Roosevelt was not actually sitting beside a fireplace when he delivered the speeches, but behind a microphone-covered desk in the White House. Reporter Harry Butcher of CBS coined the term “fireside chat” in a press release before one of Roosevelt’s speeches on May 7, 1933. The name stuck, as it perfectly evoked the comforting intent behind Roosevelt’s words, as well as their informal, conversational tone.

In many of the speeches, Roosevelt invoked memories of the Founding Fathers, Abraham Lincoln, or other inspirational figures from America’s past. “The Star Spangled Banner” was played after each chat ended, underlining that patriotic message.

Through depression and war, the reassuring nature of the fireside chats boosted the public’s confidence (and Roosevelt’s approval ratings) and undoubtedly contributed to his unprecedented number of election wins (4).

That term – Fireside Chat – conjured the warmth, and safety, of being home with loved ones during a time of such insecurity. Today, a fireplace provides that same sense of safety and well-being. Harry Butcher was a smart man to coin that phrase; Franklin Roosevelt was a smarter man to use it for all of those years.

What follows are Fireside Chats with three manufacturers concerning their company’s business in 2017, and their view going forward.

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Timo Steinhauer Anastasia Marcakis Spencer Lowe

Timo Steinhauer

Marketing Manager, Organization, Company Representation

Spartherm, Melle, Germany

Timo Steinhauer with the Varia M80.

Spartherm has just completed its first year in North America, and has made major strides in working with two Canadian distributors – one at each end of the country. A lesser effort has been made in the U.S., but that will change in the coming months.

Hearth & Home: In 2017 did you have time to visit many of your dealers?

Timo Steinhauer: “Absolutely. It is my goal to be in close contact with all our dealers. We travel a lot to Canada because that is where we started. Cosimo Cereda and I went with Andrew Vickers, who is the National Sales manager for Powrmatic. We saw many dealers and got a really good impression of how people work and how they set up their showroom.

“For us it’s important to have a personal relationship with these people; they need to know who we are, and we need to know who they are. Of course it is a security thing for both sides. If they know us they might develop a certain relationship to the product and to the company, and on the other side, if we know them we can tell if they are good, if they are actually someone capable of selling the product that we offer. We also will do that in the future with any dealer who joins our dealer network. We will ask them what they need and what they want. That’s something that is very important to us and that we will always do, absolutely.”

In Canada, do you work it from one end of the country to the other?

Steinhauer: “Yes, exactly. We started with the first contact that we had, which was Powrmatic in Ontario. Then we partnered with a second distributor – Fireplaces Unlimited – on the West Coast in Vancouver. So we have these two distributors in British Columbia and in Ontario. At this point, we consider Canada to be pretty much covered.”

Where are you warehousing product?

Steinhauer: “Right now, we have six warehouses in Eastern Canada where we store product locally, and which are also being used for the distribution of stock into the U.S.”

How many dealers have your distributors been able to open?

Steinhauer: “Right now, in the U.S. and Canada together it would be around 60.”

That seems very good for a start-up, doesn’t it?

Steinhauer: “Yes. We are very satisfied with the outcome, considering the fact that it has been one year with product ready. It has been a great journey. The product has been well accepted. We’re looking forward to getting to know more people. It’s becoming a very familiar atmosphere. You meet people again, you shake hands, and it’s a nice thing. I think people enjoy it as much as we do. It’s sort of a get together. It’s a nice market and it’s fun; we love it.

“I will be joining others in the U.S. to do the same thing as we did in Canada, which is to get in touch with the new dealers that we have set up in New York, in the Boston area, and so on. We will follow the approach of having a personal relationship with our dealers.”

I would be very interested in your opinion about the dealer network, particularly in Canada, because you’ve worked that more, but also in the States. How do the dealers differ from what you see in Europe?

Steinhauer: “It’s actually in the way of designing their showroom. It’s a little bit more traditional than what I saw in Canada. People use a lot of wood, but it’s the way of designing things with a lot of classic stone looks in combination. But I think it’s also because the fireplaces that we sell are related to wood-burning fireplaces in Canada. They often get put into wood cabins and similar areas.

“However, in the New York area it is the complete opposite. That’s due to the fact that it’s a very modern and very forward city. The people aren’t looking for something woody, they are looking for modern, clean lines and that is exactly what the showrooms reflect. So that would basically be the difference between a typical or a classic northern Canadian showroom in contrast to a very modern and sleek showroom that would be located in New York or in Boston.”

How does that really differ from what you see on average, say in Germany?

Steinhauer: “In Europe we don’t really get the classic designs anymore, because all the showrooms focus on contemporary design.”

Which style do you prefer?

Steinhauer: “For me, clearly it’s the contemporary style. This is where the whole thing is heading. Of course, it depends. If you have a cabin in the woods and you go up there like the Canadians do, that is where they have the classic style. But my personal preference is clearly the contemporary modern look.”

Was the price of your products a detriment to some retailers, where they would say, “I couldn’t sell something that expensive?”

Steinhauer: “Not at all. In fact, it was the exact opposite. People who came across our product assumed it was more expensive than it actually is. That basically confirmed that our pricing is correct. I think we are quite low priced. At least we didn’t get any bad response regarding any prices that were too high. So, not at all. Zero.”

That’s good news. I think a lot of dealers have become accustomed to selling gas fireplaces for $10,000 or $12,000 installed, and now a lot of manufacturers, such as Montigo, Travis and Stellar Hearth, are selling custom fireplaces for $30,000 to $90,000. And they can’t build them fast enough.”

Steinhauer: “Exactly. That is a trend we see big time. I just came from Toronto and we attended the interior design show, with Powrmatic people. This was the second year with Powrmatic showcasing all our product, as well as the gas fireplaces. We had custom units, four-sided ones – with a hefty price of easily $80,000 to $90,000.

“That is what people want. It’s a big step toward custom that is currently happening, not only with gas fireplaces, but it could also be done with wood. Since we are very specialized, we are definitely trying to figure how we can do this in a good manner to enable us to offer fully customized product.”

Your timing for entering the North American market couldn’t have been much better, could it? The economy is going great. The stock market is through the roof, and dealers are becoming accustomed to selling very, very expensive products.

Steinhauer: “Absolutely. We all know this is a very stable country. People are looking for high-end or luxurious stuff. The timing for entering the market was very good.”

Now, how many different models do you have to sell?

Steinhauer: “We are still at 14 models. However, with the gas knock-out that is about to be available, in theory the models have doubled to 28 since we now can offer each model as a gas or a wood-burning appliance. We will have one appliance in Nashville with a gas log system in place.”

Which of your 14 products sold through the best this past year?

Steinhauer: “Basically, all three-sided models sold well, especially the 3L 100, 3L 80. The bay windows are what make our brands unique – bay windows and corners. At some point it’s like some things are trending, and then other things are trending, but the bottom line is definitely everything three-sided sold well.”

Quite a few years ago, manufacturers in both the U.S. and Canadian markets came out with a lot of three-sided units. For a while they were selling well, but all of a sudden those sales slowed down and manufacturers dropped them from their lines. Now there are very few three-sided products in the market, correct?

Steinhauer: “No, actually there are none at all. That is what I think makes the whole thing so unique and gives us such an advantage over our competition right now. That’s what we hoped for, and now we are taking advantage of that unique position.”

I wonder why the peninsula design faded away. I happen to love a three-sided look. It’s more appealing than having just a straight-face look. I like seeing more of the fire.

Steinhauer: “Yes, yes, exactly. It’s also part of that contemporary movement. We also see it in what Regency brought out. They came out with the same thing. It’s all about contemporary and three-sided, with more view of the fire and a cleaner look. Everyone is now understanding this whole movement is heading toward it. That is what the trend will be after custom; it’s contemporary.

“Everything related to custom is going to be big, big in the future. It’s a huge thing, a huge thing. People want this unique stuff. They want to come up with their own ideas, have them realized, and manufactured by someone, and then have something excellent they are willing to pay for. Let me tell you, prices like $80,000 for a custom fireplace – I’ve never come across something like that in our markets.”

Is it still you and Cosimo Cereda who are finding the distributors and calling on dealers?

Steinhauer: “Yes, we are responsible for the whole thing and it will stay that way. We are also going to have some of the R&D people flying in to see how the market works, to see what the opposition is doing. Because they cannot really imagine how the market works and develops.”

What advice would you give your dealers concerning the appearance of their store?

Steinhauer: “I want to create a model, a standard of having a corner within the shop with corporate colors and our company logo that we put on the wall. That’s why I try to speak to the dealers directly to see what they might need in their stores, and to see how we can create, or reinvent, certain areas in their showroom not only for them to make it look better, but also to properly place our product and our brand in their showroom.

“This is very similar to what Macy’s and Bloomingdale’s do in their clothing section. There are all these shops that represent different brands.

“That is basically a system that also is being done in Europe, and that’s how we do it. I like the idea because the whole structure of the showroom gets more organized. People can move from one area to the other and really see the different approach to products, and at the same time get an overall view of the showroom. That is what I’m trying to achieve here.”

Do you find that, on average, the exterior of the retail stores are attractive and inviting?

Steinhauer: “That depends on the area and the store. Right now, it’s good to slowly move away from the classic wooden look to a more modern design, not only in the interior of the store, but also on the exterior. They should just slowly move toward a more clean and modern look.

“The same thing applies to the interior. I would be glad if dealers would want to work with us to redesign their stores, and to come up with new ideas, the same as for the outside. We could bring the whole thing more toward the modern style.”

Is that something you would be willing to put money into in terms of not only designing it, but having something built in that store?

Steinhauer: “Yes. That’s what I’m looking for.”

Are you ready to comply with the NSPS in 2020?

Steinhauer: “Yes, we will test below 2.5 grams with the units that fall under the program.”

Do you plan on doing much business with builders?

Steinhauer: “The answer is yes, and we also recognize that more and more architects are starting to contact us, which is a good thing and that’s who we want to work with as well.”

What trends have you noticed, in the hearth industry here?

Steinhauer: “Well, anything three-sided is always a good thing, even four-sided custom. Basically anything that has a corner and some straight lines, that’s the trend.”

When you walk into a retail store, what are your main selling points for your products?

Steinhauer: “Quality, design and longevity. That is what I always tell the people. If they want to spend a bit more on a fireplace, and want to buy something they are able to keep, something they don’t toss out at some point, then Spartherm is that product. I also tell them they can use it as a wood-burning appliance, or easily convert it to a gas burner. So the fireplace grows old with you as a substantial part of your home.”

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Anastasia Marcakis

Sales Manager

Supreme Fireplaces, Montréal, Quebec

Anastasia Marcakis with the Duet see-through fireplace from Supreme Fireplaces.

This family-run, wood-only manufacturer is coming off its best year ever, and looking at 2018 as a chance to beat 2017’s record sales.

Hearth & Home: Did you have time to get out and visit many dealers this past year?

Anastasia Marcakis: “I did. I try to make it a priority to visit as many dealers as I can.”

What advice would you give them concerning the appearance of the stores?

Marcakis: “I think most dealers do a great job, but generally speaking I would say they should keep up with the current market trends. That is really important, and they need to regularly update and maintain the displays on their showroom floor so they are well highlighted and well represented in the store.

“Another trend that’s really nice is some dealers will set up an area with a table so customers can bring out their blueprints or their home plan and then they go through different ideas with them.”

In the patio industry they call that a Design Center, a place to sit with customers and help them understand the products you sell. In the case of patio products, most discussions are of fabric. There are hundreds and hundreds of fabrics available, and it’s helpful to have a salesperson who understands that and helps customers find the ones that meet their specifications.

Do most of your dealers also have a counter-seasonal product?

Marcakis: “Most dealers that we sell to have barbecues as a counter-seasonal product. Very few have patio furniture, or pools and spas. But the biggest one is barbecues.”

Do you provide co-op funds for your dealers?

Marcakis: “Yes, we do, and the majority of them participate in it.”

Are you all set to comply with the NSPS in 2020?

Marcakis: “I would say yes. In 2017 we developed and certified five new products that meet the 2020 NSPS. As of late 2016 we really beefed up our R&D, and now we have three independent EPA labs in our facility that enable us to work on different projects simultaneously. That really helped to speed up the process.”

How well did you do in the U.S. in 2017, and then Canada?

Marcakis: “In Canada we experienced almost a 16% increase in sales, and the U.S. was even better with nearly a 25% increase. Last year was a really good year for us.”

Wow! That is probably the best year you’ve ever had, isn’t it?

Marcakis: “It is, actually.”

To what do you attribute such growth?

Marcakis: “I think it was that we set up a lot of new dealers with new products in their showroom. We also partnered with UBG (United Buyers Group) and obviously we made products exclusively for their members. That has helped us as well. It has given us a platform to really sell to their members.”

When did you join UBG? Were you with them through all of 2017?

Marcakis: “Yes, and that wasn’t our first full year with UBG. We expect good things for 2018 as well. Also we have new products that are really unique. Last year we certified and developed the Astra 24, which is a compact zero-clearance fireplace. It’s 22-in. wall-to-wall, and that makes it really unique for zero-clearance fireplaces and very versatile.

“It’s the ideal product if you’re looking to replace an old decorative unit without having to tear down the entire wall just because of its compact depth. But it offers a really large and high viewing area. You can put logs of 24-in. in there, so it is a really beautiful product.”

“What is also unique about it is it has cast-iron panels inside the firebox, which retain heat really well and also are extremely durable. We offer a market-leading 10-year warranty on those panels.”

Does anyone else use cast iron these days?

Marcakis: “Not inside their fireplaces. Normally you will see fire bricks. What we have done is we developed the cast iron for the Astra 24 and then we developed a parallel line called the Elegance 36 with soapstone panels inside and that is exclusively to UBG members. But we are the only ones making zero-clearance fireplaces with cast iron and soapstone panels inside. Now there are soapstone stoves, but no one makes a zero-clearance fireplace with soapstone panels.”

What percent of your business is in Canada?

Marcakis: “I would say close to 60% of our sales are in Canada and 40% in the U.S. We still have great growth potential, and we now have new products coming out at a quicker pace; we’re working on more refined looks, and last year alone we invested over a million dollars in equipment and automation. A lot of exciting things are happening.”

How many employees do you have, counting yourself and your family?

Marcakis: “Currently we employ about 26.”

Which regions in the U.S. were the strongest performers?

Marcakis: “I would say the North Central region. Colorado has become a strong market, some of the Midwest does well.”

Do you work with builders at all?

Marcakis: “Some of our dealers work with builders. Last year we worked closely with dealers that were doing a lot of big condo projects. Particularly in Montréal they were replacing all those old ZC decorative fireplaces and we were installing quite a few of the Astra’s and the Elegances. It’s a great product and ideal for this type of project because it’s easy to replace with its compactness, but also it has a nice modern look to the fireplace. They are all non-catalytic EPA products that meet the 2020 standards. So the Astra 24 is 1.8 grams per hour; the Elegance is at 1.7.”

Did you have any trouble keeping up with demand in such a good year?

Marcakis: “Yes. We witnessed such a huge increase in sales that it was a struggle to keep up with the demand. It was challenging at times, but I think this year we will be better organized and more equipped to deal with the demand.”

What are some of the trends that you see in the hearth industry right now?

Marcakis: “Linear, of course, has been the trend for a couple of years now. People are looking for minimalistic frames, large fires, but electric fireplaces have really picked up. We see more and more dealers have dedicated showroom areas where they can show different high-end electric fireplaces. There are some dealers bucking the trend and will just show two or three electric units, but a lot of other dealers are showing 10 to 20 different models in their showroom. The price point and project capability is enormous, so it really boosts the dealers’ average ticket.”

Any other trends?

Marcakis: “With gas fireplaces, consumers want it to look like a traditional fireplace. You will see less and less of the stones or rocks inside the fireplace. They want it to mimic a real fire right now, a traditional fire.”

What new products will you have in Nashville this year?

Marcakis: “We’re going to be showing some of the products that we tested late last year, which include the Astra 32, a really large zero-clearance fireplace with cast-iron panels that will complement the Astra 24. Then we are going to have the Novo 24, which is a contemporary wood stove.”

What was your bestselling product this year?

Marcakis: “We tested and came out with a Fusion 18 this past year, which is one of the five products that meet the 2020 NSPS. It has a smaller firebox than the Fusion 24, so it gives dealers the ability to work with smaller opening masonry units. But the Astra 24 and the Elegance 36 were really big sellers for us because of their compactness, and versatility in different installation applications.”

What is your forecast for your business in 2018?

Marcakis: “I’m not always optimistic, but I have a positive view for 2018. We have new products coming out again. People are excited about our line. We have new dealers that were set up last year and have quickly become loyal to our brand. The feedback has been really positive. So I’m looking forward to 2018 with a big smile.”

What have I not asked that you would like to say?

Marcakis: “For readers who don’t know much about Supreme, we’re a family-owned manufacturer that makes wood fireplaces, inserts and stoves. Our products are recognized for their patented technology and innovative features, and we work very closely with our dealers to ensure our products are successful in their business.”

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Spencer Lowe

General Manager

Ortal USA, Canoga Park, California

Spencer Lowe with Ortal’s Front Facing unit.

Ortal USA began selling its contemporary line of fireplaces in North America in 2011. Spencer Lowe joined Ortal USA in 2015 after many years in the building trades. The timing of Ortal and Lowe couldn’t have been better.

Hearth & Home: Please explain the present corporate structure of Ortal.

Spencer Lowe: “We are Ortal USA, and we are owned by Ortal Corporate, which is international, and based in Israel.”

Are you part of the ownership of Ortal, and if so, in what capacity?

Lowe: “I am on an employee stock-option plan so I have a small percentage. I’m the general manager. I oversee all North America, both Operations and Sales.”

That’s a pretty big job, isn’t it?

Lowe: “It’s a real big job. I’ve got a good team underneath me though. I have five Sales managers, and Sales reps who really handle most of the sales in their different territories. Then I’ve got a great operational team in my corporate office here in the U.S. in Canoga Park, California. I manage it all and make sure we’re going to plan and doing it within budget; I make sure my dealers are happy and getting what they need.”

Your timing coming in to the States with contemporary designs was absolutely perfect, wasn’t it?

Lowe: “Oh, it was. I’ve been in the building industry my whole life and I actually worked for some big builders as director of Operations and Purchasing. When I got out of that market, even the home designs were changing from a real craftsman, traditional home to more of a contemporary, clean line in different products across the United States.

“The fireplace industry was always slow to grasp that. Some started to come out with what they called transitional fireplaces, still with a square box that might have modern media in it, or glass inside it with logs, and they called that contemporary.

“When Ortal came into the business it really did bring a contemporary look. We came in at the right time, but we also started to focus on changing the existing mindset. We were not just selling a fireplace, we were selling a piece of art. One thing that is very nice about our products is Cool Wall technology that allows the designer, architect and builder to do whatever they want around the fireplace.

“That really opened up avenues for the clean, contemporary look. It was like the perfect storm. People were starting to open up their minds to the fact that this is a really cool product, a really cool design, and then the architecture started to change around that time in the United States.”

So you were in the building trades for years, right? Was that in the States or Canada?

Lowe: “It was in the States. I worked for KB Home as a director of Purchasing and Operations for six years, right out of college basically, and then stayed with a couple of other large homebuilders and got into manufacturing, not fireplace manufacturing, but construction goods manufacturing, millwork, staircases and cabinetry. About six or seven years ago I got into the fireplace side of the business.”

Are you happy with that move?

Lowe: “Yes, I love it. I love what I do. It is crazy busy at times but I really do enjoy it. With Ortal it’s different. We’re not huge like an HHT or a Napoleon, so we really get to spend time with our customers and with our dealers and architects and designers, which makes my job really fun because we don’t have to tell them ‘No.’ They can use their imagination and build some really cool stuff.”

I’m curious about other countries that you guys sell into. It’s Israel, Canada, the U.S. and also the UK, Holland, Belgium, Italy, France, Greece, Cyprus, and now it seems like you are in Germany as well, right?

Lowe: “Yes, as well as Australia and New Zealand. We are truly international. The United States for us is the biggest market right now, and I hope to keep it that way. We are pretty much everywhere.”

What are the price ranges of your products?

Lowe: “We start around $6,000 MSRP and go as high as $100,000 on some of our big custom units.”

Do you do quite a bit of custom work? What percent of your business is it?

Lowe: “It’s a small percentage. I would say we do 5 to 10% of our business in custom.”

I suspect that’s because you have such a wide range of standard products.

Lowe: “It is. We have about 75 standard lines and then what is in those lines is a lot of options, so it comes to almost 150 different fireplaces you can choose from. We really have a fireplace for every room design.”

I printed out your gallery pages and was just blown away. That’s a wonderful way of showing an incredible number of looks and designs. A customer can look at that array and say, ‘That’s exactly what I want.’

Lowe: “That’s what Tom, our owner, is all about. He’s an entrepreneurial genius when it comes to innovation; he’s always innovating new designs, new concepts. We came out with an indoor/outdoor fireplace that is completely different than everybody else in the market. Our U.S. team works closely with Israel on making it work for the United States market.

“Again, every one of our tunnel fireplaces is see-through and have indoor/outdoor options. So you start to get a large product selection in every category, which makes it easy for my sales guys and my dealers.”

How many dealers do you have in Canada and then in the U.S.?

Lowe: “Right now we have 244 dealers in the U.S., and around 50 in Canada.

How do you go to market, through distribution or dealer-direct?

Lowe: “We are dealer-direct everywhere.”

Do you sell over the Internet?

Lowe: “No, we do not.”

Let me applaud you.

Lowe: “Thank you, yes. We really value our partners. We kind of hand-selected the dealers that sell to the clientele we’re looking for. They have to be able to present the product in a little different way than the standard fireplace is presented. So our dealers are a true partner in the business with us.”

The design community – architects and designers – is also very much in your sights, correct? I assume that’s a major portion of what you do.

Lowe: “Yes. We found that the fireplace industry had a bad reputation with standards that were so constrictive. Designers couldn’t do hardly anything around their fireplaces so they just stopped buying them. They couldn’t make them a center point and put a big mantel around it or something else to protect them from the heat that rises off the units.

“When we started doing architect presentations and designer presentations, it was an eye opener for those fireplace designers, but also for my sales managers and myself. We promptly gave them a blank canvas to work with. That’s how we’re growing the business fast. My dealers have clients coming in to inspect the product, and they understand the price range. It’s a better business-to-business sales point to get the clients to buy.”

Just so I get this straight, if an architect wants to buy through you, you ship them to the nearest dealer?

Lowe: “That is correct. Our product is different, and when you’re buying an expensive fireplace it’s a different buying experience. Our dealers have to be there every step of the way, plus they have to service the unit on a yearly basis. All of our dealers do service contracts with the buyers and they set up a relationship.

“What we found is that when selling direct to architects, as my competition does, you can’t guarantee how that product is going in or if it is being serviced. You start to diminish your name because the homeowner is not happy with the product because it was never installed correctly, or started up correctly, and it’s not being serviced. We don’t want to go down that path.”

In which regions of the U.S. were you the strongest?

Lowe: “The West Coast. Seattle, both southern California and northern California, and Utah. We’re getting there in major metropolitan areas on the East Coast – New York City, Boston, Chicago. They are starting to catch up to what we’ve been doing on the West Coast.”

How many employees does Ortal have in North America?

Lowe: “Right now I’m at 28 employees.”

How many of them are out in the field calling on dealers?

Lowe: “I have six Sales managers, or Sales reps rather, out in the field calling on dealers and calling on architects once in a while. My Sales managers have one or two hats. They wear the architect hat when they are out presenting the product, getting it speced, and they also wear the dealer hat when they are training the dealers’ salespeople and their technicians.”

Worldwide, how big is Ortal?

Lowe: “I can’t go into revenues, but we are big. We are at an international level. We compete with companies such as Bellfires, if you want to compare us. We are no HHT, and we’ll never be an HHT, and we don’t want to be a Napoleon. We want to continue with the high-end contemporary, but we also have a traditional line as well, just a high-end fireplace that allows you to do whatever you want around the fireplace and to put heat in the home.”

Many people were surprised when, all of a sudden, custom linear fireplaces started commanding outrageous price points. For example,Travis Industries’ DaVinci. I mean they can’t build them fast enough and they go for $30,000 to $80,000.

Lowe: “Oh, yes. The majority of my sales are right in that price range. So it’s a market where people want the quality, they want the benefits.”

What trends have you noticed in the hearth industry right now? What is impacting the industry – positively or negatively?

Lowe: “More people want the contemporary look, the long lines, the linear, but they want a higher glass. So we have a high-glass option on all of our units and we are starting to see more of an impact of that option in our sales dollars. We have never had a 12-in. glass. Our standard glass height has always been bigger than our competition at 14-in., but then we option up to the 21-in. glass for a higher series. We use a flat burner. When we do a 21-in. glass our flame is going halfway up the glass, where my competition is using that same ribbon burner that gives you a very small flame. My flames are between 7- and 10-in. tall.”

What new products will you be introducing at the show?

Lowe: “The indoor/outdoor units are new for us. We’re the only company that is launching a granite refractory panel on all of our units. We have granite porcelain that will be going inside every unit as an option. We can also extend that granite porcelain outside the unit so it really feels like you’re extending the width of the logs.”

Anything else that is new?

Lowe: “Circles are integral fireplaces. We are starting to see more of a demand in the commercial lines. We have a lot of condos, bars, and restaurants utilizing them. Circles and islands are completely freestanding, gas, direct-vent and frameless. We actually use glass as part of the frame itself, thicker glass pieces to hold up the fireplace. We are just releasing a wall-mounted version, the 270. That is where we are at right now.”

It’s interesting that products such as islands and peninsulas were big decades ago, then died off quite completely. Now they’re making a resurgence.

Lowe: “They are making a resurgence. It’s amazing. I thought they would be a product that we sell 10 or 15 a year, and we’re selling a lot more than that. So it has made a resurgence in a big way. The designers have decided that a number of people can sit around an island fireplace, and a peninsula is a wonderful room divider.”

What is your sales forecast for 2018?

Lowe: “We’re forecasting 50% and up. We have a very large pipeline of business that is already booked for 2018. We’re starting to see the benefits of two and a half, three years of architect meetings and getting items speced. Last year that number grew from probably 10 to 30%. This year it’s already starting to grow from 30% to closer to that 50% where we want to be.”

What have I not asked you that you would like to talk about?

Lowe: “I think innovation. With Ortal, it’s really about innovating the industry and being the leader in innovation. That is what we strive for. I want everybody to remember who started each product. Like I said, the indoor/outdoor with the granite porcelain refractory panels are innovative by trying to change peoples’ mindset of what a fireplace can be.”

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2018 January Business Climate

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