Home heating firm’s first acquisition in expansion strategy following funding boost
A home heating specialist in Stockport has made its first acquisition following a £3m injection in May this year.
Direct Heat Group received the funding in May from North West multi-family investment office, Arete, and the newly-launched Tosca Impact Fund.
The firm said at the time of the investment it would help it realise its ambitions to hit £20m in revenues in the next financial year, including plans to move from ‘click to brick’ by opening stores around the UK.
Today (July 19) it has confirmed it has acquired Fairways Fireplaces, in Bromsgrove, the largest fireplace showroom in the West Midlands, for an undisclosed sum.
The deal will allow Direct Heat Group to have a bricks and mortar presence that will bring all of its brands under one roof for the firm’s extensive range of stoves, fireplaces and Cotswold Teak garden furniture.
Originally established as Fireplace Warehouse in 2005, Direct Heat Group founder Adam Leah built his business selling and distributing fireplaces and stoves online. In 2011, he joined forces with fellow stoves and fireplace expert, Ryan Hancock, merging their expertise under one distinct offering.
As the first retail unit of its type for the newly-merged company, the 4,000 sq ft Bromsgrove showroom will act as the blueprint for future showrooms, as the business pursues further growth.
Over the past couple of years, the majority of people have spent more time at home due to the pandemic, leading to growth in the home improvement market. That, coupled with rising household bills has led to more people looking for alternative means to heat their homes.
Adam Leah said: “When it comes to stoves and fireplaces, for many, the look and feel is just as important as their practicality. Over recent years, they have become a focal design feature in peoples’ homes, as much as they are used for heating, and we’ve had great success with our online sales.
“However, some customers will always want to see what they’re buying before making a purchase, be it a wood burning stove or garden table, and this showroom gives us the ability to reach customers as far afield as Oxford, which we just didn’t have with our fireplace and stove showroom in Manchester.”
He added: “Over the next four years, we are aiming to have an additional four showrooms, all in strategic locations across the country, putting us within a 1.5-hour drive of 80% of the UK population. Working with Arete and Tosca has already helped us to put that plan into motion as we position ourselves as leaders in the UK’s home heating market.”
Arete partner, Ben Hatton, who is now part of the Direct Heat Group board, said: “M&A was always part of the growth plan and we’re pleased to have been able to take this first step so quickly. It’s a mark of our collective ambition to reach the forecasted £20m in sales within the next financial year.
“With the price of energy being such a big topic this year, we’re seeing more people investing in woodburning stoves for their homes in a bid to help manage rising bills. So, the acquisition of the new showroom has come at a perfect time for the business to really develop those customer experiences and lay the foundations for further expansion.”
The deal was led by Mike Bound from Arete and David Middleton from Cole Associates, with Terry Moore and Olivis Sturgess of Myersons advising on legal and Claritas advising on tax.