Simple & Successful
By Bill Sendelback
Photos: 2014© Merritt Design Photo. www.merrittdesignphoto.com.
|The two stores owned by Pete and Sunnie Dines are relatively small at 2,000 sq. ft., and yet both present a high-quality, and inviting, design. (All photos are of the Edwards store.)|
Pete Dines, co-owner of Home & Hearth Outfitters in Denver, Colorado, likes to keep things simple, and that seems to have been his formula for success. He posted a 10 percent sales growth in 2012 and 15 percent more in 2013, even as the hearth industry struggled to recover.
According to Dines, “This year is off to a really good start.”
The company is now “focused on the end game, which is to make sure that the customers get what they want and that they are happy in the end. That’s kind of a simple thing, and I venture to say every dealer wants that. But it’s easier said than done. It takes some real professionalism, some real good technical know-how and a lot of stick-to-it-ness. So we stay focused on having good products and happy customers.”
Dines and his wife/co-owner, Sunnie, started the company in 1992 as a furniture and fireplace store, combining interior and outdoor furniture with some hearth. Over the last 20 years, Home & Hearth Outfitters evolved into just hearth and barbecue products with still just a bit of patio furniture.
Prior to starting the company, Dines had plenty of experience dealing with the public. He ran 60 gas and convenience stores in Colorado for Bradley Petroleum; his wife was in advertising.
“We knew we wanted to go into business for ourselves, and with her technical design abilities, we thought we would do furniture. We kind of stumbled into fireplaces and thought it would be a nice category to add to the furniture. We started with no experience, so there was a steep learning curve.”
The evolution of Home & Hearth Outfitters included a second store in Denver in 2005 that was focused on Viking kitchen appliances, and another in Edwards, in the Vail area, in 2008. In the summer of 2013, Dines consolidated both Denver operations into the current, smaller location in a cost-cutting effort; Dines moved the Viking kitchen and grill products into the Vail store. That reduction in showroom square footage made it impossible to continue with its patio furniture line, except for a small display in the Vail-area store.
Outdoor offerings now include grills and firepits, a really strong product category for both stores. While Dines does purchase some items direct from manufacturers, the vast majority of his purchases are through two-step distributors.
“Contemporary products have been on board with us from the beginning, and it has been a growing, very viable part of our business, probably 50 percent of our sales; it’s a huge category for us. Contemporary design seems to be friendlier to designers and architects and what they want to do.”
|Contemporary hearth products represent 50 percent of the company’s sales.|
While Denver is definitely upscale metropolitan, Vail is much higher end, and more international.
“A lot of folks (in the Vail area) are not from Colorado and maybe not even from the U.S. Most are from Mexico and South America. The customers are a little different from those in Denver, but that doesn’t change the mix of hearth products much. We’re still doing a lot of contemporary, or what up there they call ‘Mountain Modern.’ It’s really just incorporating our contemporary designs into the designs in Vail that have a little bit of a mountain feel. It’s a real nice twist on the contemporary look.”
According to Dines, Mountain Modern refers to a contemporary linear fireplace, but with a touch of an earth element such as river rock stones or a driftwood log set. It also refers to the finishes round the fireplace that give it a modern feel but with some natural elements, such as mixing steel and stone.
“Most brands can fit in (to that style),” says Dines, “but Town & Country and Ortal fit in very well with their media options.”
Although Dines has almost 20 competitors in his markets, he seems not the least bit concerned about such competition.
“My philosophy is to align myself with high-quality products, then focus on them and be the best,” he says. That realization came about after a very traumatic development about 15 years ago.
“When Heat & Glo realigned, we were not part of that realignment. We thought, ‘Wow, this is going to be bad, losing the industry’s biggest hearth products manufacturer.’ But it was the best thing that ever happened to us because it helped us focus on becoming really good with smaller, high-quality manufacturers, brands that we can control and are unique in their own way. That’s how we can create and stay relevant even with a lot of competitors.”
About half of Dines’ business is with medium- to high-end custom homebuilders, including remodelers and commercial builders working on multi-family developments. Low-end and tract builders are serviced by the many one-step distributors in the Denver area.
“We have developed and maintain a good reputation with these builders, and we also make sure we communicate with architects and designers,” he says.
Dines keeps it simple with product displays in his showrooms, designed and built by Dines and his staff. In both showrooms, a center island in the shape of an H includes product vignettes. Product displays around the perimeter of the showrooms include a wall of fireplace inserts with gas models on top and wood-burners below. Although he sells predominantly gas products, his wood stoves and gas stoves are displayed in separate areas. Fireplaces are mixed in the interior perimeter where there is a little less sunlight on them.
|Hearth installations are predominantly of stone, obviously appealing to the store’s wealthy clientele.|
“They tend to look better that way,” he explains.
Dines feels his customers are comfortable with the showroom layout; it’s similar to the traffic flow in a furniture store.
“You can either go left or right and kind of circle the layout. It has a comfortable feel to the customers, so it’s easy for them to shop. You can see everything in a relatively short time, but it allows us to have 24 burning models.
“Grills and outdoor products are displayed up front near the window, giving the area a bit of an outdoor feel,” he says.
Advertising has evolved over the last five to 10 years from mostly traditional forms to more emphasis on the website and social media. Newspaper and Yellow Pages ads are gone. Where advertising used to amount to as much as six percent of his gross annual sales, Dines now spends just three percent.
“We have focused more on the quality of our website and on search engine optimization backed up by social media,” he says. “Social media is not a key driver of business, but it’s something you should be aware of and get good at because it’s becoming more and more part of how you reach the market.
“If you think about it, people who are looking for a contemporary linear fireplace, for instance, are not going to go to the Yellow Pages. They are going to the Internet and finding different products and providers.”
Dines explains that it’s a constant battle to maintain, monitor and improve his website, search engine optimization and social media, but those now amount to almost all of his advertising budget, along with a bit of radio.
“With old forms of advertising like the newspaper on Saturday, it wasn’t doing us any good on Monday,” says Dines. “It’s always good to brand yourself and keep your name out there, but the more we invest in the web and the search engines, the more effective our advertising dollars are and the smaller our budget can be. It’s more effective and easier to manage than the old forms of advertising.”
In a successful effort to survive and thrive during the recession, Dines was forced to cut his staff by 40 percent; he’s now down to 11 employees.
“They were good people, but we weren’t able to keep them. We had to prioritize, and the people we kept we are really proud of having kept.”
Dines’ wife, Sunnie, took over as bookkeeper.
“There is no better business partner than your wife or husband,” he says. “This is only the second career either of us has ever had. It’s just the way we’ve always done business, and it works well for us.
“The hearth business is a tough business because of the technical expertise it requires. That’s something we take huge pride in. We all have hard days, but I remind them that if it were easy, Home Depot would be selling fireplaces, and we would be doing something else. That’s something all hearth shops really need to remember.”
Still recovering from the recent economic recession, Dines’ big plans for the company’s future are simply to survive.
“During the recession, we spent so much time managing our expenses that now we’re slow to switch gears toward growth. Yes, we’re growing, but we’re being really careful with expenses because the recession is still fresh in our memory. Most importantly for us is just being a really healthy company, being profitable and taking care of the good people we employ, and then, we hope, growth will come. We’re not chasing growth as we did 10 years ago, but we’re embracing it in a conservative manner.”
Dines claims he is the poster child for the book Blueprint for Success, written as a “bible” for hearth dealers by the late Tom Pugh (in collaboration with Hearth & Home).
“I really believe Tom was trying to help all hearth dealers become smarter business people,” he says. “Apparently many dealers listened to him. The hearth dealers who are still here after the recession are to be commended – even my competitors.
“It’s a hell of a story for our industry. If you go back a couple of years, there were some pretty dire predictions for hearth dealers. We came through better than those predictions. It’s my position to embrace growth, but to do it in a profitable way that allows us to be very flexible during the next downturn.”