Mark Adair

Arete leads £3m investment round into indoor and outdoor heat specialist

Northwest based multi-family investment office Arete has announced it has led a £3m funding round into an online retailer specialising in stoves, fireplaces and outdoor living, together with backing with newly launched TDC (Tosca Debt Capital) Impact Fund.

Originally established as Fireplace Warehouse in 2005, founder Adam Leah built his business selling fireplaces and stoves via two websites, Direct Stoves and Direct Fireplaces.

Together with business partner Ryan Hancock, the pair went on to acquire teak garden furniture business Cotswold Teak and specialist wicker basket business, Woven Hill. The investment from Arete will help bring the individual brands together to create Direct Home Stores, a new brand that is expected to generate £20m sales within the next financial year.

More time spent at home means that consumers today are increasingly looking for ways to improve their homes, with a long-term goal of enhancing the value of the property and increasing its saleable value. Furthermore, 92 per cent of UK house buyers consider the garden or outdoor space to be the most important factor when looking for a property.

The deal will also help in the acquisition of a number of key senior hires that will strengthen the existing board and help generate future growth, with the business expecting to double its number of employees within the next three years.

Commenting on the deal, founder Adam Leah, said: “The team at Arete have a great understanding of the e-commerce market and can provide us with invaluable guidance as we approach this new phase of business.”

Simon Lord led the deal for Arete with support from Mike Bound and worked closely with Victoria Daly, Mark Metcalf and India Kendrick in forming the funding package for the deal.

Arete partner Ben Hatton, who will join the board, added: “It’s a crucial time for the UK home heating market. Not only has there been an increase in consumers choosing to create focal points out of fireplaces in their homes, but in recent years we have also seen a resurgence of wood burning stoves and other alternative means of heating.”

“We have built a strong relationship with the team and have been extremely impressed by the ambition they have shown to work alongside Arete.

“The business is already very well established and is forecast to generate over £20m turnover in the next financial year, so our goal now is to work with the group to develop its portfolio of brands and drive the business into its next stage of growth.”

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