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Hearth Retailer Profile

Hard Work Pays Off for Denger’s

It would be difficult to find a more hardworking, dedicated family than the Dengers. Charlie Denger; his son, Mike; and his grandson, Brian, have built Denger’s Hearth & Home, based in Lexington, Ky., into a powerhouse brand that has integrity and heart. The downturn in the housing market has forced them to take stock of their business to ride out the storm—a challenge that they face together with instinctive optimism.

Charlie Denger opened a retail store, Denger’s House of Fire, in 1975 to sell wood stoves at a time when the market was already saturated with hundreds of stove companies. In 1978, the company was incorporated as Denger’s Wood­burning Supply. The business grew steadily, and he was selling close to 1,000 stoves a year to hardware stores across Kentucky, using his old International truck to make deliveries. Eventually, he was able to diversify, and he began offering a full range of hearth products.

In 1983, his son, Mike, purchased the business, changing its name to Denger’s Hearth & Home. In response to the rise in popularity of prefabricated fireplaces, Mike started servicing new-home construction. This turned out to be a main line of business because this was a time when housing sales were strong. Since then, Denger’s Hearth & Home has become synonymous with fireplaces in the area. The company built its reputation as a retailer that not only has great products, but also does what it says it’s going to do, and always strives to make things right.

In 2004, the Dengers opened a second location in Louisville, Ky., that serves as a construction outlet for builders in Louisville and its surrounding areas. Two years later, Mike built his dream store on a large parcel of land that he had purchased alongside a major highway. Replacing Denger’s original store, the impressive 7,200–square-foot, two-story building, which has a large wraparound porch, has become Denger’s flagship location.

Mike’s son, Brian, worked alongside his father for many years, knowing that someday, he would be running the business himself. That day came in 2002. “The day I graduated from college, my dad walked out the door, handing the operations over to me,” Brian recalls. “I’m really surprised we didn’t go out of business.” Although it was a tough transition, Brian says that it was the best possible way to learn.

As the next-generation manager of Denger’s, Brian has some tough challenges on his plate. When he first took the reins, new-home construction was still booming. He immersed himself in fostering relationships with builders, and he became an active member of the local chapter of the National Association of Home Builders, serving in many volunteer positions (including associate vice president). He was on the Kentucky state board of directors for six years.

“It’s important to me to devote my time to the association because it allows me to give back to the group of people who have done so much for our business,” Brian explains. He says that this has also given him the ability to stay in touch with what’s going on in the housing industry.

Easy times didn’t last long. Brian remembers that right around 2005, new-home construction started to taper off and Denger’s profits started to slip. Builders stopped building, so they weren’t buying fireplaces; homeowners were defaulting on their homes, which meant that Denger’s wasn’t getting paid for fireplaces that it had already installed.

“It’s been especially tough because not only are we hurting, but we’ve had to see a number of our longtime customers lose everything because of the economy,” Brian says. He has no doubt that the two retail stores are what has kept the business alive. Even though construction is a large part of Denger’s business, it has always had a retail side, and Brian credits this fact to his father and grandfather.

To supplement business until the economy recovers, Denger’s has diversified its product mix to include casual furniture, gas grills, and custom grill islands. Brian has also started an outdoor-room design/construction service. He personally works with homeowners to create the backyards of their dreams, from the initial consultation to overseeing construction and landscaping. He even does some of the construction himself. He’s been averaging about 12 kitchens a year, ranging in cost from $5,000 to $50,000. “I’ve always wanted to offer something like this to customers, but now that things have slowed down, I actually have the time to do it,” he says.

During these times, Brian has clearly seen the true value of the professional relationships that his family has developed over the years. “I give so much credit to my staff for their dedication, great attitudes, and willingness to make daily sacrifices for the ultimate good of the business,” he says. Brian is also thankful for his suppliers and for the flexibility that they have shown him. “They understand that we are all in this together and that if we can work together to make things right, we will all prosper in the end,” he adds.

The future of Denger’s Hearth & Home, according to Brian, is bright. His deep involvement with the housing industry allows him to see a positive side of the crisis. “The population is growing, and people in their 20s and 30s haven’t been buying houses, which is creating a lot of pent-up demand,” he explains. “That and a lot of other factors are leading this country eventually to need more housing. It’s just a matter of time.” While he waits, he’s made a point of continuing to nurture relationships with builders, instead of sitting around and worrying. He encourages other retailers to use slow times to talk to builders they’ve never talked to before and to explain how they can add value.

Looking back on the past few years, Brian sees a much different picture of the business than he once did. “When I first started running the business, sales increased 10 percent every year; I thought it was something I was doing. Now, I realize I was just riding a wave—and now, that wave has crashed,” he says. “I’m thankful for the solid foundation my father and grandfather built with quality products, personal service, and a positive attitude because that foundation, along with a lot of hard work, will give us the strength we need to be better than ever when housing comes back.”

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