Everburn flares to front of ceramic log industry, opens Housewarmings retail stores
Quoting from the IndoUS Business Journal March 15th Issue.
LEXINGTON, Ky. March 15th 2006 — Happenstance in the form of a combustion and heat transfer degree and a job offer landed Ajay Gupta in the gas fireplace industry in 1988, an industry that, at the time, was on the verge of a redefinition thanks to new ideas and new products. But it was hard work, foresight and an instinct for survival that enabled Gupta to be one of the driving forces behind a transformation that managed to rouse a once stagnant industry.
These days, Gupta's company, the Lexington-based Everburn Manufacturing Inc., is one of the country's largest manufacturers of ceramic logs and the first to come up with a split log design in an assortment of natural colors. The 185-employee company generated $14 million in revenue in 2005.
Last year, the company opened its first 4,800-square foot retail store in Lexington, called Housewarmings, which in addition to Everburn's ceramic logs, sells everything associated with the product from outdoor and indoor fireplaces to furniture to outdoor grill islands.
"We would go to trade shows and see beautiful fireplaces and we were thinking about how to diversify," said Gupta. "Our concept is beautiful presentation and raising the bar several notches."
The concept seems to be taking off. The store did $1 million in sales last year and a second, 20,000-square foot store was just opened also in Lexington.
Gupta's career is all about raising the bar, even when it appears that there is no bar to be raised.
Gupta came to the United States in 1986 after receiving a bachelor's degree from Punjab Engineering College and working for three years for two different boiler companies in India. He received a master's degree in combustion and heat transfer from Southern Illinois University and then took a job for Valor, an England-based developer of gas fireplaces.
Valor wanted to set up a research and development laboratory in the United States to design gas fireplaces for the U.S. market. At the time, there weren't many models for the local industry. Gupta was a senior researcher with the company and their first model was a "big flop," he said.
But with the second model, Gupta said they had begun to understand the industry. So much so, that Valor ended up being the first company in the United States to develop vent-free gas logs, said Gupta. "It was very exciting because the industry was just starting to get launched and we were there," he said.
Valor was sold in 1991 and its fireplace division was shut down, but Gupta was hooked. He ended up at Stomping Ground Tool and Dye, one of the two U.S. manufacturers that licensed the design he had worked on at Valor. The company wanted Gupta to set up its fireplace division.
At the time, in the early 1990s, the English concept of ceramic logs for gas fireplaces was just being imported to the United States. Gupta's group gave the product a shot and impressed one of Stomping Ground's investors enough to motivate them to set up a separate log-making company. Everburn Manufacturing was born in 1992 with one stipulation according to Gupta: that he be involved in the company.
Within two years Stomping Grounds was sold and Gupta moved over to Everburn full time, becoming its president. The transition, he said, wasn't easy.
"Initially, we went through a hellish period," said Gupta. "It was more complicated than we thought and we didn't know what we were doing."
The company started out that year with five employees, one customer and a lawsuit because of a non-compete clause that one of Everburn's initial investors signed. The out of court settlement that was reached meant that Everburn couldn't deal with the industry's largest eight potential customers for three years.
In hindsight, and in an ironic twist, it is that verdict that provided Everburn with its biggest break. Initially, in those three years, the company was forced to pursue smaller customers many of whom grew but remained loyal to Everburn. The restriction also prevented Everburn from attending trade shows, forcing the company to develop a different, more intimate strategy to woo its customers that involved private shows and resulted in closer relationships.
More importantly, the company was forced to focus on its research and development to stay ahead. At the time, ceramic logs across the industry were all the same gray color. "We said logs are different colors in real life," said Gupta.
Gupta said customers initially loved the colored, split log designs that Everburn developed but couldn't figure out how to present them. "We saw we had to come up with the design ourselves," said Gupta. "That day we set up a design studio."
Eventually, Everburn came up with different colors, design barks and charred logs. By 1997, the company was up to 250 employees but was still a niche player in the industry satisfying more boutique, high-end requests.
And then Everburn's largest customer had a problem: a "massive order" from Lowe's which its current supplier couldn't fulfill. "I said we'll do it in six weeks but they needed it one week," said Gupta. "I said we'll do it. We were literally working 24-hours-a-day."
The effort helped Everburn enter the high volume market and shifted Everburn into high growth mode, said Gupta. By 1998 the company had 350 employees, $8 million in revenues and was dubbed by Inc. Magazine as one of the fastest growing companies in the country.
Still, the company was only marginally profitable at the time but the implementation of what Gupta called "lean manufacturing" two years later changed that. Among other changes, the log-making process went from five days to two and a half hours and by 2001, Everburn hade $12 million in revenues. The more efficient production system also managed to buffer the company from the effects of the economy's downturn.
The opening of Housewarmings represents a continuation of Gupta's attempt to marry product and design. The store involves a series of rooms both indoors and out that demonstrate how gas fireplaces can be used. "We call it the dream house," said Gupta.
Gupta plans to expand Housewarming's product line and open additional stores. As for Everburn, Gupta said that he plans to innovate there as well by employing the same strategies that have gotten the company to where it is. "We believe in the team and we are passionate about partnerships," he said. "We grow with our customers."