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.