s - Floor Covering Weekly

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Vol. 62 No. 24
A Hearst Business Publication
December 23, 2013
$25
2013 Industry Report
State of the
PREPARING
FOR GROWTH
Investments, product changes set stage for future
By Amy Joyce Rush
P e r i o d i c a l
Hard work, investments and expansion defined much of
what happened in 2013. For the first time in years, suppliers
talked about rebuilding and preparing for the upturn which,
they said, is finally here.
“2013 was the first strong recovery since the Great Recession,” said Randy Merritt, president of Shaw. “The improving economy has reinforced the value of preparation and
the importance of looking forward that has always been a
part of Shaw's strategy. Throughout the recession, we asked
ourselves, ‘are we prepared for our customer’s business to
improve? Are we prepared to service increasing demand from
all channels of our customer base? Is our product assortment
right for what the expanding consumer and end user base will
want? Are we prepared for growth in every segment of our
business?’” Merritt said that at Shaw, the answer is “yes.”
At Mannington, the integration of Amtico went
“extremely well,” said Kim Holm, president, residential
business, Mannington. “The year as a whole was a building
year — integrating Amtico, anticipating and keeping up
with demand as the economy came back to life, and adjusting our businesses accordingly.”
Tom Lape, Mohawk’s president of residential flooring, said
that 2013 was rewarding for the company because of the investments it made even in a down market. “These strategic investments have proven to reap rewards as we make gains coming
out of the recession. Additional capacity, improved quality and
enhanced production efficiency are all positive outcomes of
these investments, and our retail partners have benefited as well
to get better products at better values from Mohawk Industries.”
Growth realized
“The economy finally showed some improvement and
provided for a relatively strong year for Mannington,”
noted Holm. “Certainly the economy improvement was the
highlight of 2013. We are anticipating continued gradual
improvements in 2014 as well.”
Merritt said Shaw is pleased with 2013 growth. “We anticipate that the economy is going to continue to slowly improve,
driven by the housing recovery, a strong automotive market,
strong markets in some other manufactured goods and slow
✓
For breaking news updated each business day, visit us online at www.fcw1.com
fcw122313pages.indd 1
but steady improvements in employment,” he said.
Likewise, Lape of Mohawk said that the company is
pleased with the progress that the floor covering industry
is making as it rebounds. “2013 marks another year of
growth for both the flooring industry and the carpet segment in particular. This is due in large part to all aspects
of consumer demand showing varying levels of improvement,” he said.
Kevin Biedermann, Armstrong Flooring Products
senior vice president, noted, “We are looking forward to
another up year. I don’t think it will be spectacular but it
will be positive, which is good.” He noted that the company
will continue to focus on “managing expenses, continue to
drive cost productivity through process improvement and
adjust its manufacturing footprint based on demand.”
Challenges faced
At Shaw, one hurdle has been the shift in customer
demand within the company’s product mix. “For example,
growth on resilient, hardwood and carpet tile is changing the
Continued on page 6
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WINTER
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News
3
New Mohawk Flooring Center has it all
center for all new product and marketing
innovations launched from the Mohawk
[Calhoun, Ga.] This fall, the new Mohawk Flooring & Home division.
More than 100,000 square feet, the redeFlooring Center here became the home for
the residential, commercial and international signed building has brought together offices
teams, including sales, marketing and prod- and personnel from 11 different facilities and
uct management. Once home to a spinning located them just next door to the corporate
mill built in 1983, the building has been com- leadership offices.
Brian Carson, president of Mohawk Floorpletely renovated and is now the executive
ing, had a vision to build an industrial
building with a modern sensibility. He
also wanted “to create an atmosphere
where all of the flooring teams could
collaborate and push the limits in creative design,” said David Duncan, SVP
marketing. “It’s working beautifully
and the results will be clearly demonstrated with all of the new product
innovations shown during our 2014
Regional Product Markets.”
The cafeteria in the Mohawk Flooring Center uses
repurposed wood on the ceiling.
Some building details exemplify
By Janet Herlihy
Mohawk’s dedication to sustainability. In the
cafeteria, wood planks from old semi-trailers
were refurbished and installed on the ceiling.
Metal piping and other iron works from
various Mohawk facilities were repurposed
to become pillars and supporting columns
within the building. “The reclaimed materials
help us qualify for LEED credits,” Duncan
explained. “They also contribute to creating
a beautiful, industrial-chic style.”
Mohawk has begun the process of applying for LEED certification for the building.
These applications generally take months to
be approved, but the Flooring Center is full of
features that contribute to LEED certification.
A “brand wall” presentation that lines
the main hallway and leads to the showroom displays Mohawk’s latest products
and chronicles the company’s history. “The
showroom was the last room to be installed
on site,” Duncan noted. “All the products
Mohawk’s Flooring Center is the new hub for
residential, commercial and international teams.
that are sold under the Mohawk brands are
on display along with areas that feature our
other businesses — Dal-Tile, Unilin, Marazzi
Tile and Mohawk Home.”
The Mohawk Flooring Center also serves
as a key destination for customers and has
already welcomed guests from around the
world, according to Duncan. “Mohawk plans
to expand the facility in the future as the
company continues to grow,” he said. FCW FCW
Correction
Corrections
FCW
FCW
Redi Carpet rides multi-family market wave into 2014
[Houston] Suppliers have been reporting
that the multi-family market is a hot segment for flooring and Redi Carpet is a good
example of why.
Redi Carpet, based here, operates facilities
in 17 cities in eight states that primarily serve
the replacement flooring market in apartment
complexes as well as some new multi-family
projects, according to Jerry Hosko, president
and COO of Redi.
Redi’s 2013 flooring business, primarily in
base grade carpet, sheet vinyl (especially fiber
glass) and luxury vinyl plank and tile (LVP
and LVT) was up overall about 15 percent over
2012, according to Hosko. “Most of that growth
was organic and exceeded our expectations,”
he reported. “There’s a lot of pent up demand.
The apartment industry did not suffer like
single-family construction. It has been fairly
consistent without the severe ups and downs
of retail. Even in the worst of the recession, we
were only down 10 to 20 percent. Also, being
Texas-based with a lot of our business in Texas,
there was still a lot of new construction. We
actually benefitted from the recession because
when people lost homes they still needed housing so apartments have grown. We expect the
same kind of growth in 2014 in terms of new
apartments and replacements,” he explained.
When it comes to what kind of flooring is in
demand in multi-family replacement, Hosko
advised, “Look to what the new complexes are
putting in. Older properties have to compete
with newer properties. If the new properties are
using new flooring products, the older apartments have to replace with the new product too.”
Luxury vinyl flooring is the fastest growing
category for Redi. “LVT has taken over any
SmartStrand takes on Mo the dog
[Dallas] Mohawk’s cross
10 million viewers. Mo
country License to Spill
will be at the Puppy Bowl.
campaign in 2013 was so
When Times Square
successful, the company
is closed off for the NFL
announced here at conextravaganza, Discovery
vention its new campaign
Communications, parent
for 2014 will center around
company of Animal
Mo, a yellow lab quite capaPlanet, will host an expo
ble of creating hard to clean
from Jan. 26 to Feb. 1
messes putting SmartStrand
with Mohawk carpeting
Mohawk’s Elise Demboski presents
to the test.
the 15,000 square foot
the Mo campaign to the press at
To get the campaign, convention.
facility. Again, Mo will be
SmartStrand Unleashed,
in attendance.
started, Mohawk will be the official sponsor
Mo will appear on The Better Show —
of Puppy Bowl X which airs on Animal Planet which was an integral part of the License to
the same time as the Super Bowl to more than Spill campaign. He will also film 12 webi-
laminate and there is virtually no ceramic used,” carpet with every new lease, while others
Hosko said. “There is less carpet and more LVT try to wait longer by cleaning it to extend
going in now. It (LVT) is more forgiving, has its life, Hosko said. In the past three to four
great fashion and it’s cost effective because it years, polyester (PET) carpet has increased
doesn’t have to be replaced as often,” he added. and is close to 50/50 with nylon carpet in
“We have had huge growth in LVT for the last Redi’s business now. “The PET does work,”
five years. The residents have not found a way Hosko said. “We have had some of it down
to destroy LVT. Sheet vinyl gets tears and dents. four years.”
— Janet Herlihy
Once the wood plank look started in LVP, the
owners started to change out more
floors to it. The product has moved
from the kitchen to the dining room
and into the living room. Some are
even putting it in bedrooms. We expect
that LVT might ugly out by losing its
luster and then it will be more expensive to replace, but that hasn’t started to
happen yet,” Hosko explained.
Redi Carpet’s showroom in Houston spotlights
Some properties change out carpet and LVT.
sodes of Mo’s Next Mess. The effort will be
supported by a “blow out on social media,”
said Elise Demboski, vice president of creative services at Mohawk. The fully integrated campaign offers point-of-sale kits,
advertising tools, social media content,
digital banners, customizable press releases
and fully loaded event kits for its dealers.
In addition, SmartStrand will be promoted
on air and a digital campaign will invite fans
to Instagram a photo of their dog watching
Puppy Bowl X for a chance to win a dog bone
shaped SmartStrand bound carpet.
In addition to generating excitement for
SmartStrand, Mo is raising awareness for
pets in need through Mohawk’s partnership
with the Petfinder Foundation. Mohawk is
donating $2 for every “‘like” the company Mo is the cornerstone of Mohawk’s new Smartreceives on its Facebook page. FCW FCW
Strand campaign.
Correction
Corrections
December 23, 2013
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FLOOR COVERING WEEKLY
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12/18/13 9:23 AM
4
News
2014 Mohawk Solutions: Own the Moment
By Amy Joyce Rush
[Dallas] Mohawk certainly owned the
moment here at the 2014 Solutions convention last week. Integrated product launches
and a sharp focus on digital — The Cloud —
which included everything from web to social
media and managing one’s online reputation.
“Our goal is to be your go-to company
for all flooring — from premium to value,”
said Jeff Lorberbaum, chairman and CEO of
Mohawk. “Mohawk today is in the strongest
position than ever in our history.”
In fact, Lorberbaum revealed that Mohawk
is now listed on the S&P 500 along with Facebook and that, “in a little over a year, our stock
prices doubled. We strengthened our balance
sheet and reduced our debt. This year, we
changed our approach moving from a conservative approach trying to reduce costs to an
aggressive growth strategy,” he said, adding
that the company invested some $2.2 billion
in new equipment and acquisitions.
“In the first half of this year, we acquired
three companies,” he reminded dealers. The
Marazzi purchase, he said, gives Mohawk 40
percent of the U.S. ceramic market. Pergo
also gives the company more than a 40 percent share of the U.S. laminate business. And
Spano, a niche, regional board manufacturer,
will help the company expand its product
line and address more customers.
I believe we are building the infrastructure to
separate us from everyone else,” Clauson added.
Hard Surface
The hard surface message was a cohesive
one. Popular character wood looks, for example, were made available across all product
categories and price points so that no matter
the platform or budget, Mohawk hard surface
has a product to fit the consumer’s need.
“You’ll see character wood looks being
fairly significant,” explained Roger Farabee,
senior vice president, marketing for Mohawk
Hard Surfaces and Unilin Flooring.
The Cloud
Across all platforms —
Lorberbaum noted at genhardwood,
ceramic
and
eral session that the Internet
porcelain tile, laminate and
and social media are among the
luxury vinyl tile (LVT) — the
biggest game-changers in hiscompany brought a strong
tory. Mohawk is working with
design focus coupled with the
its dealers to not only create
goal of reaching different price
strong sites and have a meanpoints within the market. All
ingful social media presence,
the introductions were driven
but it has a plan for managing
by technology and innovation.
dealers’ online reputations.
ArmorMax was expanded
“The Cloud is a digital serand even combined with
vice to help your online pres- Jeff Lorberbaum
Scotchgard. “We are always
ence. Mohawk is here to give
trying to find smart ways to use technology,”
you an advantage,” said Lorberbaum.
One of the most important efforts Mohawk noted Farabee.
Mohawk is also adding SKUs to LVT visuis making is to help dealers manage their
online reputation. “Online reputation is als as well. Said Farabee, “We are incredibly
critical today. That is ratings and reviews and excited about the additions we are making to
Architexture is a new engineered
social media," said Kent Clauson, vice presi- the LVT category.” Additions were made to
hardwood with a European look.
dent, brand and digital. Mohawk will help its the Simplesse line and Prospects collection.
dealers manage reviews and The company also introduced the Prospects
ratings by generating content Plus line which boasts longer planks and a
on its site from consumers. tougher wearlayer.
Ceramic visuals were enhanced by Reveal
“If we don’t actively solicit
reviews, all we will be is victim Imaging for design purposes. Unique wood
to a few people out there looks and mixed media looks as well as glass
giving negative reviews,” he mosaics launched here.
In laminate, board production was
said. Mohawk is also providing its aligned dealers with expanded and proprietary technology
increased to create new wood surfaces.
Facebook content.
“We are taking a hard stance
Seth Arnold with The Captivator — the new
on digital — it is a way we can Soft Surface
destination display system for SmartStrand Silk.
Mohawk reinforced its Good, Better, Best
measure our marketing efforts.
Dal-Tile completes Marazzi integration
[Dallas] Dal-Tile Corporation, the largest manufacturer and marketer of ceramic
tile and natural stone products in North
America, has completed the integration of
the U.S. business of The Marazzi Group,
which was acquired by Mohawk Industries,
Inc., Dal-Tile’s parent company, earlier
this year.
The combination brings together the four
leading brands in the tile industry: Daltile,
American Olean, Marazzi and Ragno; DalTile remains committed to providing its
extensive product collections within each
brand to tile and stone customers, through
its three primary distribution channels across
North America: company-owned stores,
independent distributors and home centers.
To support its approach of maintaining
unique brand, product and distribution
strategies, the company has implemented a
new leadership and organizational structure.
Gianni Mattioli, previously president and
CEO of The Marazzi Group’s U.S. business,
will serve as Dal-Tile’s executive vice president of marketing and R&D, and will have
responsibility for Dal-Tile’s product strategy,
brand marketing and product marketing.
“With Gianni, we have added an excep-
tional leader whose 30 years of industry
experience and business acumen enabled
Marazzi’s U.S. business to flourish,” said
John Turner, Jr., president, Dal-Tile. “We are
excited to have Gianni continue to execute
his proven track record of delivering product
innovation and customer service excellence
across our industry-leading brands.”
With the growth of the company’s brand
marketing function, Lori Kirk-Rolley has
been promoted to vice president of brand
marketing for the Marazzi and Ragno
brands in addition to her support of Daltile
and American Olean.
Correction
Corrections
·
·
The Karastan brand is known for its high-end
wool carpets.
structure by adding PET to the Wear-Dated
brand, offering that mid customer a strong
polyester option. The brand, which stands
for quality and performance, will reach new
products and price points, according to
Mohawk executives.
“Mohawk is the only manufacturer that
offers products with 4th generation softness in
all three categories, which is a huge opportunity
for retailers to up sell their customers in the
value category,” said David Duncan, senior vice
president of marketing and sales operations.
Wear-Dated Allure, for example, will
undergo the new Continuum process. These
products resist dirt, grime and contaminants
and are made from 100 percent recycled
content. “At every stage of carpet development — from the fiber technology to in-store
merchandising — Mohawk continues to
innovate, to lead, to invest in products and
technologies that offer the greatest advantages for retail partners,” said Duncan. It was
announced here too that Continuum was
awarded its first patent.
Another convention highlight was the
unveiling of “The Captivator” — a 15 foot
long display system for SmartStrand Silk that
holds up to 40 styles.
Seth Arnold, residential brand director,
Continued on page 20
Jim Fanning will now lead the company’s
home center and distributor sales segments
as senior vice president of those functions.
Within Fanning’s organization, Hector
Narvaez has been named vice president of
sales for Marazzi and Ragno brand distributors; he will also support Marazzi brand
sales to key home center customers.
Jon Shedlosky, vice president of American
Olean distributors and Sandra Reilly, vice
president of home center sales, will continue
in their roles and also report to Fanning.
Dal-Tile’s store operations, including its
network of company-owned Daltile, American Olean and Marazzi Sales Service Centers
(SSCs), will be led by John Cousins, senior
vice president. FCW FCW
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FCW
December 23, 2013
12/18/13 1:58 PM
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1-800-FLOOR-US
12/12/13 4:01 PM
6
Retailers report solid growth in 2013
to its Manhattan flagship store, ABC is not a
typical carpet and rug dealer. Larry Chiprut,
After years of yo-yo market conditions, floor vice president of ABC’s broadloom, said,
covering retailers report that sales in 2013 “Broadloom did surprisingly well in 2013. The
showed consistent growth. In its Floor Cov- stock market has done well and ABC is tied to
erings Industry Quarterly Update, Catalina the stock market. We are up 10 to 15 percent,
Research agreed, stating that U.S. floor cov- mostly from sales of higher end merchandise.”
Location is key for its broadloom sales and
erings sales (shipments minus exports plus
imports) surged in the third and fourth quar- Brooklyn is a growth area, according to Chiprut,
ters of 2013. Catalina estimated that dollar floor who said, “Brooklyn has taken off and lots of
coverings sales increased by 7.6 percent in the people are moving there. We have done a lot of
second quarter of 2013 and could have risen by town houses as older areas are being gentrified.”
Having the latest and greatest is ABC’s speanother 6.9 percent in the third quarter.
ABC Carpet & Home, the fifth largest floor- cialty and fueled sales in 2013. Chiprut said,
ing retailer in FCW’s Top 50 Retailer report, “We had a lot of help from the vendors with new
built its business on broadloom and rugs. introductions that make a statement in higher
Now, operating three locations in addition priced goods — $150 to $250 a yard carpet.”
Broadloom that is selling
well includes Karastan’s
SmartStrand
products.
“They have every style,
fashion and density. It
feels great and people love
it. We are selling a lot of it
to people who would have
bought wool,” Chiprut said.
Other star suppliers include
Nourison, Dixie, Fabrica,
Carousel and Robertex
brands and Stanton.
Rite Rug, ranked 6th in
Rite Rug’s store in Dublin, Ohio offers a wide range of flooring.
By Janet Herlihy
FCW’s Top 50 retailers report, is based in
Columbus, Ohio and operates 18 stores in
nine states. Michael Goldberg, owner and
CEO of Rite Rug, said, “We experienced
growth from all segments of our business
in 2013. Our builder division has had
unprecedented growth in new markets
over the last few years and we are expecting
the same in 2014. Property management
continues to take market share and retail is
enjoying new found growth in hard surface
categories as well as an increase in average
ticket price due to the popularity of soft
carpets and wood.”
CAP Carpet Inc. based in Wichita, Kansas,
and ranked 13th in FCW’s Top 50 Retailers
report, operates 14 locations in four states.
“2013 has been really good,” said Aaron
Pirner, owner and CEO of CAP. “We did
close some stores in St. Louis but overall same
store sales are up in single digits,” he stated.
A new store concept, The Floor Project,
launched in the spring, has been successful.
“We are looking to grow and expand it to
other locations in 2014,” Pirner noted. “In
terms of product mix, hard surface flooring
continued to take share from carpet, but
soft carpet sales did well, as did LVT and
innovative wood styles,” Pirner reported.
Porcelain and natural stone sales were also
up at CAP.
Nourison’s Nepal broadloom is performing well
at ABC Carpet & Home.
Correction
Corrections
Growth to continue in 2014
Chiprut is optimistic about the broadloom
business in 2014. “The consumer is getting
back to wanting to make their homes more
comfortable,” he said. “Lately, the consumer
has wanted rugs and carpet on stairs so we
have done a lot of cut-to-fit, but we are seeing
designers begin recommending more wallto-wall broadloom and that will be good for
the entire industry.”
Goldberg added, “Customers are looking
for luxury products in all categories now
more than ever. The soft carpets are hugely
popular in both nylon and polyester as well
as specialty hard surface items.” Despite concerns with the political climate
in the U.S. and uncertainty with the world
economic outlook, Pirner is also generally
optimistic about 2014. He said, “We expect to
grow in the low single digits and are budgeting for more than that. We expect a down
tick in housing but continued growth in the
remodel segment.” FCW FCW
FCW
2013 Industry Report
State of the
Continued from page 1
structural needs of our distribution network,”
said Merritt. “As a result, we are investing
$55 million to streamline our distribution
network and add an additional 535,000 square
foot expansion in Dalton. These changes will
allow us to more effectively service customers,
increase roll and pallet capacity and improve
efficiency. We are working hard to ensure our
distribution and logistics teams are prepared to
service increasing demand in both carpet and
hard surface in the most efficient manner. And
we are working to insure we are prepared to
service the expanding product demands, not
only in the United States but also globally. All
this has required focus, preparation and additional investments.”
Workforce — finding, training and retaining
the right people — too has been an industry-wide issue. Merritt added, “We are working hard to better train not only our current
associates, but our future workforce via a joint
effort with the Governor’s Office on Workforce
Development, the Northwest Regional Commission, Georgia Northwestern Technical College and other manufacturers to create the Fast
track Innovation Program — a unique 10-week
training program to help meet the manufacturing industries’ employment needs.”
The two areas that continue
to plague the industry from a
consumer perspective and potentially a construction perspective,
according to Mohawk’s Lape,
“are, one, job and income growth
and, two, Washington. The
uncertainty of government shutdowns certainly is not helpful for
discretionary consumer spending
or the markets. The continuation Kevin Biedermann
Kim Holm
Tom Lape
Randy Merritt
Mannington
Mohawk
Shaw
of income rates, although slug- Armstrong
gish to date, we believe can only
At Armstrong, despite the economy over
improve from this point forward,” he explained. demand in the Asian market. “With two-thirds
For manufacturers of hardwood, shortages of the world's carpet tile sold outside of North the past several years, the company will not
and rising raw material pricing still threaten America — the majority in Asia — our new cut investments being made in what makes it
the rebound of that market. “The low for us plant expands our opportunity to participate in successful such as “fulfilling our brand promise,
new products, quality and programs that drive
was the availability and cost challenges of logs this growing market,” explained Merritt.
The company also expanded its existing profitable sales,” said Biedermann.
for our hardwood business. This issue started
He also noted that Armstrong continued
in late 2012 and continues to challenge us as Cartersville carpet tile facility to its maximum
we go into 2014,” said Mannington’s Holm. and announced plans for a new $85 million to “take the high road in product design,
Biedermann at Armstrong said, “For all carpet tile facility in Adairsville, Ga. Shaw is launching upscale American-made genuine
manufacturers, the cost of raw materials con- investing $55 million to streamline its distri- scraped woods as well as commodity-busting
tinues to rise at an extraordinary rate. Despite bution network and add an additional 535,000 laminates and LVT in a multitude of interchangeable and customizable sizes.” In 2013,
the challenge, Armstrong is positioned to square foot expansion in Dalton, he said.
Other investments include $45 million to Armstrong rolled out 20 new SKUs of lamleverage our scale to ensure a profitable cost/
value proposition for retailers and consumers.” expand capacity within Shaw's existing extru- inate and “redefined what constitutes highsion facility in Dalton and the company pur- end design within the category,” he added.
Both Mohawk and Mannington made
chased an adjoining piece of land for future
Investments meet new demand
With an eye on growth, Shaw made a expansion. Another $40 million investment substantial investments in their manufacturnumber of key investments this year. It opened will help Shaw meet the growing demand ing this year as well. (See December 9 issue of
its 210,000 square foot carpet tile facility in for its Epic engineered hardwood product by FCW for more details about all major indusNantong, China which addresses growing expanding the South Pittsburg, Tenn. facility. try investments.) FCW FCW
Correction
Corrections
·
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·
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December 23, 2013
12/17/13 1:05 PM
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FLOORS
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12/16/13 12:34 PM
8
Laminate
Deflationary conditions impact laminate
help mitigate costs. The other, Kelley noted,
is to provide products that will allow conWhile market conditions continue to improve sumers to move their preference upstream
throughout the country, the laminate category and away from basic commodity laminates.
Most manufacturers also noted that one of
is still impacted by many challenges. And as
some of the smaller laminate suppliers con- the biggest challenges to the category contintinue to fall by the wayside, for the leading ues to be low priced imports. Mannington’s
manufacturers 2013 was about responding to response is to focus on the high end.
“We have pretty much abdicated the lower
these challenges and rising above.
According to George Kelley, CEO of Krono- end of laminate and are letting the imports
tex USA, the challenge continues to be fighting duke it out with some of the larger manufacoff the same deflationary conditions that have turers that still play in lower end laminate,” said
impacted laminate for years. “The fact remains Dan Natkin, director of wood and laminate at
that external raw material costs have risen and Mannington. “Our focus is on the style and
quality of upper end laminate.”
our prices have not kept pace,” Kelley said.
Paij Thorn-Brooks, vice president of brand
One key focus that Kronotex has taken on
this year is its investment in paper treating to marketing at Unilin, agreed that Chinese
imports have created a
more challenging environment for domestic
manufacturers,
and
continued to do so in
2013. “However, one
very important point
to consider is that
the Chinese presence
revolves predominately
Paij Thorn-Brooks
Drew Hash
Milton Goodwin
around price. This gives
Unilin
Shaw
Armstrong
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*See technical data sheet for full details.
domestic manufacturers the opportunity to
lead in the other product attributes important to consumers,” she said. “During 2013,
the non-price features weighed more heavily
during the consumer’s selection process than
in the past few years.”
Touting inherent attributes
Some industry insiders told FCW that the
2013 laminate market continued to be eroded
by strong sales of luxury vinyl tile (LVT).
However, domestic manufacturers noted
that projecting laminate’s Made in America
story, as well as its numerous environmental
attributes, helped boost laminate sales.
Mannington finished with laminate imports
this summer and now proudly touts that its
laminate is 100 percent made in the U.S. “Our
core values have always been in American manufacturing. This year we were finally able to say
that all of our laminate has been onshored,”
said Natkin.
Kelley at Kronotex strongly believes that
domestic manufacturers need to champion
the message that U.S. manufacturing integrity ensures that companies are being environmentally responsible.
“Our manufacturing plant keeps up with
Schönox AP with
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George Kelley
Kronotex
the latest technology to ensure air and water
quality. This is done because it is the right
thing to do and is done at cost to our bottom
line,” Kelley noted.
Laminate products that meet and exceed
indoor air quality requirements are continuing to become more of a differentiation point
with consumers, especially as they compare
to imports, manufacturers said.
Many executives referred to commercial
initiatives in 2013. Some of Mannington’s
bigger pushes this year were around builder
acceptance, Natkin noted.
Thorn-Brooks at Unilin added that 2013 came
with a substantial amount of pent-up remodeling demand from which the flooring industry in
general, including laminate, benefitted.
Optimism around the upper end
Milton Goodwin, Armstrong vice president
of wood and laminate, feels his company leads
in terms of bringing innovation to the market.
“We try to stand apart in the category in that
we continuously try to introduce new innovations,” he said. Goodwin pointed out multiple
width planks in a single box to produce unique
and different flooring options for the consumer,
as well as cross-cut graining and the company’s
focus of designing unique and authentic visuals.
“We brought products to market this year that
most, if not all, of our competitors would be
challenged to make. So far, we are very pleased
with the progress we have made in 2013.”
Goodwin also noted that this year, Armstrong has added approximately 20 new SKUs
in the high-end design laminate category.
Key product introductions, he said, included
antique structures, white wash products, and
the company’s Architectural Remnants collection continues to bring success.
Natkin noted that Mannington focused on
adding smaller display units to better feature
its high-end products.
Drew Hash, hard surface category manager
at Shaw, said there is always some pressure
from other categories and potentially losing
share. But, he said, “The way we came at that
was by making better looking and better quality
products. In the simplest terms, we just focused
on making laminate better texturing, style and
design wise. This year we made some great
strides with our laminate visuals. We’re happy
with where we took our market offerings this
year and are excited with where it is going.” FCW
Correction
HPS North America,Inc.
The Schönox Provider
Toll Free: 855.391.2649
www.hpsubfloors.com
·
Dan Natkin
Mannington
·
Corrections
FCW
WWW.FCW1.COM
FCW
FCW
December 23, 2013
12/17/13 1:07 PM
9
Strategic Insights
view (POV) and narrative. Ensure every from Krystal to The Ritz-Carlton.
The key to success is adding your POV
touch point is about your brand. Make the
product secondary to your brand. People and narrative with a sense of excitement
BY CHRIS RAMEY
are emotional; not rational. Leverage that 95 and “over the top” distinction to your store.
percent of the flooring is indistinguishable Dump everything that is outside your POV.
from other products to a consumer. A unique It takes discipline and vision, but the future
POV may be as simple as leveraging color. Or belongs to those who execute.
it could be owning a certain “look” or style ___________________________________
ne of the buzzwords in business promise less and they deliver less, and the of rugs. Scandinavian furniture stores don’t Chris Ramey is a keynote speaker, trainer and
show traditional furniture for a reason. But, consultant. He is also president of The HomeTrust
is “experience.” It seems everyone customer is happier.
if you wanted that “look” then you’d only and Luxury Marketing Council Florida. Ramey
wants to call visiting their showroom
go to a Scandinavian store. They succeed has over 30 years’ experience in floor coverings.
an experience. I visit a lot of showrooms What can you do?
Take a trick from the luxury segment. because they have a POV and the discipline He resides in Miami and welcomes your comacross dozens of categories, and I have a lot
of experiences. Very few of these visits are Infuse your store with your own point of to manage it. Ditto for every successful brand ments at [email protected].
good experiences. And then recently in New
York City, I heard an owner of a famed floor
covering showroom end his presentation with,
“Visiting X (his showroom) is an experience.”
A person sitting at my table starting laughing
at the thought. Even my Fresh Market in
Coconut Grove has a sign on their front door
that reads “Experience the Food.” C’mon,
really? You want me to experience the food?
“Experience” has been hijacked by marketers who believe it will become true if they
say it enough. It joins a cadre that includes
“quality,” “luxury” and “service.” If you have
to say it then it probably doesn’t exist. Worse,
everyone says it. And everyone lies. So there’s
no distinction from competition. That makes
it irrelevant. So, please stop saying it.
Experience should not be confused with
“experiential.” Consumers desire things that
are experiential. I work with many clients on
what we call “Surprise & Delight” programs.
Programs/services that can’t be bought. We
may invite Northern Trust clients for a night
cruise on a Ferretti Yacht, or a private event
with Sting. In the restaurant business, they
refer to it as an amuse-bouche. Today, great
service is the cost of the entry. The question
you should be asking yourself is “how can I
‘surprise and delight’ my clients?” Victoria’s
Secret recently promoted a $10 million
bejeweled bra. And Neiman Marcus will promote something “over-the-top” for its Holiday Catalogue. Trust me on this: beige bores
everyone. Beige (the best-selling color) is the
default when you haven’t done your job.
Customers are the core of your business
— not beige product. Most of the things
that fascinate a product specialist, like most
of those in floor coverings, mean very little
to your clients. They aren’t buying what
you’re selling.
At GE Capital, we understand your commitment to helping homeowners—getting the right
And they aren’t judging your store against
flooring for their project and their budget. Just as homeowners trust and respect your expertise,
your specialty store competitors. They will
you can rely on GE Capital’s special financing solutions to help you build long-term relationships.
judge you against their collective experiences
— which likely includes Neiman Marcus,
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Apple, Marriott and home centers. As a specialty store they will expect you to be consisStop just banking. And start building. Enroll today by calling 1-866-209-4457.
tent with their expectations; today that means
Apple and Nordstrom. They’ll expect less at a
home center and the home center will deliver
less. So it isn’t about who is best; it’s about
imagination at work
who matches expectations. It’s a paradox.
Home centers deliver what they promise and
Credit is extended by GE Capital Retail Bank
they meet their customer’s expectations. It’s
© 2013 General Electric Company. All Rights Reserved.
the same reasoning that Southwest Airlines
keeps winning awards for great service. They
Good and Evil
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021190_Flooring_FloorCoveringWeekly_LikeBankCarpet_7_735X9_125_0413.indd 1
December 23, 2013
WWW.FCW1.COM
·
·
4/11/13 10:56 AM
12/17/13 1:07 PM
10 Laminate
Quick-Step takes pride in distribution
together and work closely with the retailer as
well, that is what makes a great successful relaWith 15 distribution partners across the tionship. It’s amazing some of the things we
country, Quick-Step takes pride in acknowl- have discussed and how many things actually
edging the crucially important part inde- have come to fruition.”
pendent distribution plays in the company’s
Strengthening relationships at retail
continued success.
The Quick-Step brand is currently carAnd what Quick-Step believes to be one
of the most integral pieces in maintaining ried by approximately 95 percent of the top
a strong and successful relationship with 50 retailers as reported by Floor Covering
its partners is simple. According to Shane Weekly (FCW) this year, according to Unilin.
Calloway, vice president of North American The company feels that partnering with the
independent distribution at Unilin, one thing right distributors is a key factor in initiating
its partners appreciate is the company’s ability an audience with these top retailers.
“These distributors have developed treto listen to needs at the distributor level.
“We are big believers in listening to our mendous relationships at the retail level that
advisory council,” said Calloway. “We believe have been formed over the last 20 to 30 years
that if we listen to their input, we can actually on average,” said Calloway. “They have a very
make some of those things happen for them seasoned and tenured sales team through disand it helps to drive our business. It also tribution, so partnering with the right network
makes our relationships with our partners has made us much more powerful.”
Calloway also noted that distributors
even stronger as well.”
Rich Kearsley, senior vice president of sales know their markets very well and have keen
at Elias Wilf, said the way the Quick-Step team insights into what will work for the specific
listens to input from distributors is extremely audience in their region.
valuable. “I think because of that, we have been
able to establish a relationship of trust with Benefits of distribution model
While some manufacturers are turning to
them,” said Kearsley. “When you collaborate
By Brittany Walsh
a direct approach, Quick-Step
believes strongly in the success
of its independent distribution
channel. Calloway said the
coverage that its distributors
provide is second to none.
“Sometimes going direct
takes a little longer and you’re
forced to figure out how to make
it work. Our distributors are very
quick and flexible with moving
product,” added Calloway.
Craig Folven, vice president
at Herregan, said that one thing Rich Kearsley of Elias Wilf accepts Distributor of the Year
that makes Quick-Step a valu- award from members of the Quick-Step team.
able manufacturing partner is
“A few times a year they offer us the opporthe understanding of a “true partnership.”
“[Quick-Step] knows that they are a tunity to speak and offer input,” said Kearsley.
strong manufacturer and they believe in us “They bring representatives from some of
and our abilities as a strong distributor. We their partners together a few times a year and
are able to feed off of each other in order to competitiveness is checked at the door. The
forum is an opportunity for us to learn from
be successful,” he said.
each other so that we can all benefit.”
According to Quick-Step, the council acts
Positive focus on the future
One thing Quick-Step distributors noted as a means of communicating what the comas an important tool in maintaining a suc- pany and its partners have achieved since the
cessful relationship was the Quick-Step Dis- previous year’s meeting.
tributor Council.
We give you everything that’s important to consumers,
including social media and product education,
so you can close more sales.
·
·
WWW.FCW1.COM
December 23, 2013
12/17/13 1:06 PM
Resilient
11
Addressing continued growth, expansion
comes with a cautionary note. “It’s the same just price. “The challenge
lessons the industry learned from the laminate lies in the flooring industry
As the year draws to a close, resilient manu- craze many years ago,” Train said. “Many being able to keep consumers
facturers reflected on the positive changes and companies will join the bandwagon, but you focused on value and not
growth of the category. Across the board, sup- have to stay true to your core competencies.” primarily price,” said Kevin
Biedermann,
Armstrong
pliers said the year was a tremendous success
Flooring Products’ residenand they expect the growth to continue well Addressing the challenges
Another key strategy has been to train tial senior vice president.
into next year. But while they remain buoyantly optimistic, they also plan to examine both the retailer and the consumer to focus “This category provides treContinued on page 12 Xavier Steyaert, IVC US
hurdles and lessons they learned over the year on the quality and value of resilient and not
to better improves their business next year.
IVC US had another strong year, said
Xavier Steyaert, Co-CEO, because the
company focused on growing its customer
base. “Despite a maturing sheet vinyl
market, the nice growth we experienced in
this segment was fueled by a combination
of success in our traditional channels and
also into new channels,” he said. IVC US
expanded beyond traditional retail and
distributor to property management and
multi-family housing markets, and even
the RV industry. Expanding its distribution
Karndean LooseLay is an innovative new format of LVT
also meant expanding its distributor netthat’s quick and easy to install. Ideal for commercial and
work, which also contributed to its growth.
residential environments, its friction grip backing holds the
Russ Rogg, president and CEO of Metroflor Corp. echoed the sentiment and is
product in place; no clicking, no locking.
grateful that the year was completed without any major crisis. “Fortunately, we did
not meet any significant obstacles this year.
Our business remains strong and we anticipate that this level of growth will continue
for the foreseeable future.” The key to that,
he noted, is continual innovation and new
product development.
Emil Mellow, vice president of marketing
for Karndean Designflooring US, noted that
“2013 has been a tremendous year for growth
of the overall US Karndean business. The
challenge in a growing market is keeping up
with demand.”
By Sharyn Bernard
Ed Duncan, Mannington Mills
No slip. Just grip.
Increased LVT demand
One of the biggest drivers in 2013 was the
increasingly strong demand for LVT products.
“A key focus for us this year was keeping up
with the incredible, continued growth and
demand in the rapidly changing LVT market,”
said Ed Duncan, senior vice president of
residential marketing for Mannington Mills.
“Early in the year we had a major product line
expansion which was very successful.”
Added Jonathan Train, vice president of
product development for EarthWerks, “LVT
has taken off and the economy is growing
again.” That demand creates its own challenges, he noted, particularly in keeping up
with stock and inventory.”
Mellow at Karndean said they, like others
saw explosive growth in the category. LVT
sales grew across the board, he said, noting
that the company’s premium business performed well this year, but along with that
the company had to focus on merchandising
tools, inventory and customer service.
Still, the issue with such explosive growth
December 23, 2013
WWW.FCW1.COM
Karndean
LooseLay
·
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·
12/17/13 1:06 PM
12 Resilient
Expansion
mendous value to a consumer.”
There are other key elements that drove
the business and that will continue to
impact the market. Some of these are out of
the manufacturers’ control but are critical,
nonetheless. “The lesson I learned this year
is that there are external issues we can’t
control,” said David Reichwein, president
and CEO of FreeFit. These include macro
views of what’s going on globally, from
geopolitical factors to domestic issues.
“We can control costs, quality, new
product development. We do our best but
are impacted by outside forces,” such as
a meltdown in the EU, a debt crisis or a
wildly fluctuating interest rate.
In addition, he said an often overlooked
but critical aspect is intellectual property
protection. “The industry level of intellectual
property awareness could be improved. It
surprises people. I warn people all the time Kevin Biedermann, Armstrong David Reichwein, FreeFit
Glen Hussman, Tandus-Centiva
that a lot of problems could be avoided if
people educate themselves on intellectual
There were other lessons learned and sure it has the right structure for each channel.
property law.”
challenges faced. Rogg of Metroflor “There is not a one size fits all,” Reichwein said.
Tandus-Centiva launched a number of prodacknowledged that the company learned
that having too many new products and ini- ucts and will continue to expand both lines.
tiatives can have unintended consequences. “We experienced very robust growth and it’s
The firm launched the most new products forcing us to get better and stay competitive.”
Armstrong focused extensively on realin its history — from LVT to other lines
— and while that is positive, “it was a lot istic designs and will continue that trend.
to manage at one time,” Rogg said. “We “Certainly the trends continue to be all about
will be committed to a more sequential color and design; however, the realism is
launch of new products in the future so that what truly differentiates the resilient products
something fresh is hitting the marketplace for the consumer,” Biedermann said. Other
consistently during the course of the year.” major initiatives included new shapes and
Some changes in the market have been sizes to its LVT lines.
Manufacturers agreed that while there has
unique to specific companies, such as Tandus-Centiva’s purchase by Tarkett. “This been sustained and long term growth in the
has been a year of dramatic change,” said category, and while they expect it to continue
Glen Hussman, president of Tandus-Cen- into the next year, suppliers need to proceed
tiva. “The change of ownership has been a with caution. “There is no quick path to succhange on steroids for us.” But, he added, cess,” Biedermann said. “Tried and true
the changes enabled all parties to focus on products and programs continue to perform,
their strengths and grow all their businesses. and that means great products that consumers
“We’ve had a lot of wind in our sails, and want to buy, well-trained sales associates and
I think going forward we will continue distributor partners that can provide support
to focus our energies on how to bring a — the model works.” FCW FCW
multi-surface solution.”
FCW
FCW
Correction
Corrections
Expanding product lines
All this activity leant itself
to a spate of new products and
new lines across resilient categories, notably, unsurprisingly,
in LVT and locking systems.
FreeFit expanded its line to
take advantage of economies of
scale while also examining its
distribution network to make Emil Mellow, Karndean
Quick-Step
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“We go through 2013 and discuss all of
the positives and negatives. What needs to be
fixed on the negatives and how we can expand
on the positives. And most importantly we
talk about where we’re going,” said Calloway.
“Where we’re going entails first and foremost
products, product innovation and what we’re
looking to launch in the coming years.”
By involving its distributors in the brainstorming process, Quick-Step believes that
not only do distributors have their voices
heard, but also allows the company to better
equip them with new marketing opportunities at the retail level.
“When it comes to marketing and mer-
Jonathan Train, EarthWerks
chandising, nobody does it better than Paij
Thorn-Brooks and Quick-Step,” said Kearsley. “They provide a great blend of technology, new and old. And none of the products
we sell are offered at home centers. These
things you can’t really put a price on when
you need to market a brand.”
Folven noted that Quick-Step provides
its partners with a total selling package
of complete merchandising units, great
representation, a great brand name and is
well advertised in the trades as well as to
the consumer.
But according to Kearsley, the bottom
line comes down to trust. “We like to work
with people that we can trust,” said Kearsley. “And when you pair that with people
who work as hard as you do, it makes for a
very successful relationship.” FCW FCW
Correction
Corrections
·
·
FCW
WWW.FCW1.COM
FCW
December 23, 2013
12/17/13 1:06 PM
12/16/13 10:49 AM
14 Wood
Demand, price define 2013 market
By Mallory Cruise
2013 has proven to be an active year for the
hardwood market. Though sales were up
this year, and the market continued on a
growth pattern, rapidly rising raw material
prices, a limited lumber supply plus growing consumer demand have all resulted in
a number of challenges for the rebounding
hardwood industry.
Two combined key factors characterized
the hardwood market this year, according to
Dan Naktin, director of wood and laminate
business at Mannington. Demand continued
to grow, he said, despite unprecedented raw
material price increases. “The category gains were due to con-
Kevin Thompson, Shaw
Wood shows strength
As far as volume is concerned, 2013
marked a solid year for the hardwood
market, noted Milton Goodwin, vice
president of product at Armstrong.
Rick Knowles, Anderson
“We saw the dam break from a growth Harry Bogner, Unilin
and sales standpoint, and every segment
of the market has been better. Sales are up, costs housing starts and remodel.
“We are seeing strong growth in not only the
are up — those would be some things we saw
in 2013 and will continue to see through the builder market but in the remodel sector as well.
And, housing starts have also greatly improved.
remainder of the year,” he said.
Kevin Thompson, hardwood category man- We are also seeing some significant regional
ager at Shaw, attributes the rebounding market growth throughout the country,” he said.
Brian Greenwell, vice president of sales
and growing builder market as the key factors
and marketing at Mullican, noted that these
defining the wood industry.
“Finally, we’re seeing a consistent market increases in raw material costs left an indelible
rebound fueled by a strengthening new home mark on the hardwood industry in 2013.
“Raw material prices escalated at an astonconstruction market. Also, the
unprecedented raw material ishing rate, and manufacturers had no choice
price increases that are pri- but to increase prices to stay ahead of (or
marily impacting solid have even with) raw materials,” he said.
also had a big influence on the
Challenges persist
wood industry,” he said.
While sales indeed are up, the wood market
Rick Knowles, vice president
of sales and marketing at Ander- faces a number of challenges. Unfavorable
son, agreed, saying other key weather throughout the year, coupled with
drivers characterizing the wood increasing consumer demand, has resulted in
Milton Goodwin, Armstrong Brian Greenwell, Mullican market undoubtedly include the rise of raw materials prices.
Greenwell at Mullican noted, “The biggest
challenge was balancing demand with increased
raw material costs. Manufacturers had to
increase production while trying to manage
lumber inventories and not drive prices even
higher,” he said.
Goodwin at Armstrong explained that the
availability of lumber ebbs and flows with the
market, which has proven to be a major challenge for the hardwood industry.
“We saw challenges in the availability in
lumber. We had a wet spring and a lot of snow
in the winter — it was difficult for the loggers to
get into the forest. Loggers were able to cut trees
and fill up log decks in the summer. Now everyone is holding their breaths hoping we don’t
have a bitter winter. If that happens, it’ll make
the logging season shorter which will reduce
the availability of raw materials in the marketplace,” he said. He also noted that the flooring
industry is competing with other industries
when it comes to wood procurement.
Another challenge, said Knowles at Anderson, is anticipating and planning for the
increase in demand on the manufacturer side.
“Many things have to happen up front. We
have to plan for capacity, raw material supply
and some long term processes to be able to stay
in front of everything,” he said.
tinued upward movement in both the new
home construction and remodel markets.
Consumers still make hardwood the
‘flooring of choice,’ which drove improved
demand throughout 2013,” he said.
Hardwood flooring manufacturers industry-wide had to raise prices on their finished
goods, in response to increased lumber costs
during 2013. That, said Harry Bogner, senior
vice president of hardwood at Unilin, had a
significant impact on the wood market.
“The increased cost of lumber was something out of the control of manufacturers. These
increases were heavily driven by shortages in
lumber due to wet weather in logging areas,
increased demand, shortage of loggers and lack
of adequate saw mill capacity,” he said.
Dan Natkin, Mannington
The year’s bright spots
Industry executives agreed that the housing
market was, and continues to be, a huge driving factor of the hardwood industry in 2013.
Additional bright spots include market growth,
improved demand and increasing sales.
Armstrong, for instance, added crews to
·
·
WWW.FCW1.COM
December 23, 2013
12/18/13 11:33 AM
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16 Wood
Executives report a growing industry
FCW talked with industry executives to iden“The housing market showed new signs of
tify key reasons for this year’s market growth. life, and demand increased at the distribution
Here is what they had to say:
level for the first time in a while.”
— Brian Greenwell, vice president of sales
“Despite raw materials driving price and marketing at Mullican
increases in the market, hardwood continues
to be a flooring type that consumers aspire to
“The industry is in growth mode because
have in their homes.”
wood is a popular product. Consumer con— Dan Natkin, director of wood and lami- fidence is good and coming back strong.
nate business at Mannington
Measuring consumer confidence, there’s been
should be better than 2013. As the economy
improves, the expectation is that new home
construction will increase and subsequently
drive more demand for hardwood flooring.
periods throughout this year when confidence Residential/ remodel is expected to also grow.”
— Harry Bogner, senior vice president of
has declined but relative to when you look at
confidence to last few years, that confidence in hardwood at Unilin
the housing market has improved. The fore“The wood market is back to growth again
seeable future looks bright for our industry.”
— Rick Knowles, vice president of sales and due to an improved housing market and a
rebounding retail market fueled by residenmarketing at Anderson
tial remodel and replacement.”
— Kevin Thompson, hardwood category
“Economic indicators point to continued
recovery. For the hardwood category, 2014 manager at Shaw
Correction
Corrections
“The hardwood industry is being driven by
new housing starts and remodel, and both are
going up. It’s a growing business, and it’s very
competitive, but it’s definitely up.”
— Milton Goodwin, vice president of product at Armstrong FCW FCW
FCW
Demand
FCW
its facilities in order to meet rising demands.
“We’ve added crews in just about every
plant in the U.S. and around the world.
Hiring to keep up with demand is always a
good thing. We’re experiencing growth with
our products and we’re very excited about
where the future lies for us,” Goodwin said.
For Shaw, one particular bright spot is produced-based as the company’s Epic product
line has been doing very well.
“We’re experiencing continued phenomenal success with our Epic hardwood product
line with high double-digit growth and the
announcement of a $40 million expansion,”
said Thompson.
A changing consumer preference for certain types of wood products has been another
positive, according to Natkin at Mannington.
“Consumers appear to be moving back
towards more premium products and not just
focusing on the entry level. For example: wide
width, long length and hand distressed products are growing rapidly in demand,” he said.
“Despite raw materials driving price increases
in the market, hardwood continues to be a
flooring type that consumers aspire to have in
their home.”
Knowles at Anderson agreed, adding that
while more consumers are specifically buying
higher-end goods, they are also directing their
focus on domestically produced products.
“We are seeing an improvement in better
goods sales. People are feeling more confident and it seems to be gaining momentum.
There’s also a movement of products moving
back to the U.S.A. People are looking for
reduced lead times, which has helped to facilitate this movement,” he said.
Added Bogner at Unilin, “Considering all
that the industry had gone through with the
economic downturn and the length of the
recession, it was encouraging to see how
well hardwood flooring began rebounding,”
he said. FCW FCW
American
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®
MADE IN
THE USA
Correction
www.mullicanflooring.com 1-800-844-6356
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12/17/13 1:08 PM
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18 Carpet & Area Rugs
2013 residential carpet
buoyed by housing trends
omy and the attitude of the consumer. Ralph
Boe, co-CEO of Beaulieu, explained, “There
As housing goes, so goes the residential are government issues such as the Affordable
carpet business and 2013 was a good year for Care Act and concerns about where interest
housing. Rising consumer confidence led to rates will go that have created a lot of uncerconsistent 25 percent gains in housing starts tainty. Better goods are selling, but mid-level
price points are soft.”
and existing home sales
Base grade carpet, used
rose more than 10 percent
in both multi- and single
each quarter into the third
family units has been
quarter, according to
pretty strong, Boe added.
Catalina Research.
Tom Lape, Mohawk’s
Carpet is still fighting
president of residential
for share because changing
flooring, said, “We look
consumer tastes are resultback on 2013 as a year
ing in more hard surface
of transition, as the
flooring being chosen in
economic recovery conthe residential replacement
tinued to gain firmer and
market. Carpet and area
firmer footing throughrugs’ share is estimated
out the year.”
to have declined to 50.9 Timeless Charm II is a Shaw Soft
Mohawk expects pent
percent in dollars and 55.7 Shades carpet made of Anson nylon.
up demand to break
percent in square feet in the
third quarter of 2013, according to Catalina. loose. “Our 2013 trend analysis indicates that
Still, the report tallies carpet and rugs dollar consumers have begun to respond to this
sales (shipments minus exports plus imports) repressed demand by purchasing and renofor the first three quarters of 2013 up 4.2 per- vating their homes with new soft floorcovercent with a 2.9 percent gain in square foot sales. ing,” Lape reported.
By Janet Herlihy
response is innovation through advances in
soft fiber technologies across all major fiber
categories,” Lape said. Such advances include
Mohawk’s new Continuum process soft
polyester that will keep the company at the
forefront of the segment, he added.
For Invista, the greatest challenge was
insuring sustainable growth even though
the economy was sluggish, according to Dan
Haycook, executive vice president, Invista
Surfaces. “Innovation, in all aspects of our
business, was our core driver in people, R&D
and social media,” Haycook said.
Steve L. Griffith, CMO, Invista Surfaces,
added, “Our challenge was to create innovation and marketing for products such
as Stainmaster PetProtect, which answers
a specific consumer problem that is not
about price. Our research has shown that
only 20 percent of consumers are primarily
concerned about price. That means that 80
percent want other things,” he stressed.
Successful carpet launches
Shaw focused on soft carpet in 2013,
according to Trey Thames, Shaw’s residential vice president of marketing & product.
“Offering soft carpet products was definitely the biggest initiative of 2013. We
expect this to continue in 2014 and beyond.
It has demonstrated that consumers will
pay for innovative new products. Soft has
helped raise the average net selling price
and created excitement around carpet,”
Thames said.
Lape stated, “Mohawk now offers the
Challenge: Something new
Growth in better goods, builder qualities
Residential carpet must court the consumer widest array of next-generation soft styles of
To understand the state of the carpet
industry, look first to the overall U.S. econ- with stylish and relevant products.” Mohawk’s anybody in the residential carpet industry.”
Mohawk’s EverStrand Soft Appeal made with
recycled content from PET beverage bottles,
features soft polyester fiber.
Seeking to deliver meaningful benefits to the
consumer, Beaulieu launched Bliss Indulgence,
a solution dyed soft nylon, along with updates to
Magic Fresh (with odor reduction) and HealthyTouch with Silver Release (an antimicrobial).
To jump start Indulgence, Beaulieu put
together three promotional components,
according to Boe. “We got involved with
the March of Dimes and linked that to
Indulgence. We also launched the Spa
Sweepstakes Program that offered a chance
to win a vacation and other prizes. We got
the consumer’s attention and then reached
out to RSAs (retail sales associates) with our
American Express program.”
In 2013, Invista launched Stainmaster
brand extensions TruSoft, SolarMax (fade
resistant) and most recently, PetProtect,
which are all in store and being sold right
now. “It is key to be ready to sell in spring
2014,” stressed Griffith. FCW FCW
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Commercial carpet spotty in 2013
After being the bright spot in the carpet
industry from 2010 through 2012, specified
commercial saw only modest gains in 2013.
“Government spending cuts — federal, state
and local — slowed many public projects,”
said Stuart Hirschhorn, director of research
for Catalina Research. “However, hospitality is
doing well and private office projects are somewhat better as well,” he noted.
Supply everything, everywhere—quickly
Clients are asking for more, according to
Brenda Knowles, Shaw’s vice president marketing & product development - commercial
division. “Commercial customers are increasingly looking for suppliers that are true partners
Mannington’s Connected Collection
includes five patterns in 16 colors.
bringing to the table a full range of solutions
across product categories,” Knowles said.
Globalization was another challenge Shaw
answered in 2013. Knowles added, “Our market
research has shown demand growing across
the globe, so we have increased our capacity to
provide service and support across all regions of
the world,” Shaw’s new carpet tile plant in Nantong, China will enable the company to better
serve the growing Asia Pacific market.
For Mannington, delivery speed became a
challenge. Jack Ganley, president of commercial, explained, “Clients have gotten the design
work done but then there’s a delay for a variety
of reasons. When the OK comes, it’s a rush that
has shortened average delivery times. What
used to be five to seven weeks (for delivery) now
is either immediate delivery or three to four
weeks. We have done a lot in the plants to allow
things to move faster. We have added staff and
some machines are now running 24/7.”
Tandus Centiva dealt with change “on steroids,” according to Glen Hussman, president
of the newly merged company. “With new
ownership (Tarkett) and a merger with Centiva,
Tandus Centiva still outperformed the industry
in its traditional businesses,” Hussman said.
Lessons Learned
Ganley stressed, “Uncertainty is the new
normal. You have to be prepared to take
orders quickly, ramp up and slow down
quickly. We work with our suppliers to be
able to meet these demands.”
Mannington has also expanded its Express
Program to include about 170 SKUs including broadloom and modular carpet and LVT.
In 2013, Tandus Centiva learned how to
do many things at once. “It’s highly competitive and fast paced, but being able to take on
challenges has shown us that the right people
can achieve a great deal,” Hussman said.
Carpet Initiatives
In 2013, Mannington’s Connected, a
modular carpet collection that previewed at
Neocon in 2012, rolled out and is doing very
well. “It is geared to corporate and offers a
lot of options. Made with Antron Lumena
nylon, it speaks to large open floor plans with
visual cues and texture that is more luxurious
for new spaces,” Ganley said.
“At Interface, our key initiatives were driven
by our Mission Zero promise to eliminate any
negative impact we have on the environment
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by 2020,” said John Wells, president and CEO.
Interface’s Net-Works initiative is providing a
highly sustainable material source — salvaged
fishing nets — for the company’s yarns. Since
2012, Net-Works has worked with fishing
villages in the Philippines to collect discarded
fishing nets. Aquafil recycles the nets for use in
the nylon fibers for Interface yarns.
Shaw continued its tradition of innovation
with its unique hexagon shaped tile and with Patcraft’s Design Catalyst collection that includes
carpet and resilient products that are designed
to work together, according to Knowles.
Tandus leveraged technology and innovation in launching its collections String Theory
and Jackson, both created with Sero Design
technology and available as hybrid resilient and
modular products, according to Hussman.
 Janet Herlihy
Shaw’s Vance Bell speaks at the grand
opening of Shaw’s carpet tile plant in China.
WWW.FCW1.COM
December 23, 2013
12/18/13 9:23 AM
Tile & Stone
Demand, competition increase
As demand for ceramic tile rose in 2013, so
has competition.
“The business climate in the second half of
2013 was similar to the first,” said Raj Shah,
co-president of MS International. “We continue to see a pickup in overall business. Significant investment is being made across the
board by companies in the sector. The overall
employment, housing, interest rate environment and stock market picture is continuing
to drive demand despite short-term speed
bumps such as the government shut down.”
Midway through 2013, U.S. ceramic tile
consumption was up 11.7 percent from
second quarter of 2013, according to the Tile
Council of North America. Through second
quarter, 837.3 million square feet of ceramic
tile arrived in the U.S. This was an increase of
14.8 percent from the same period last year,
in which 729.3 million square feet of ceramic
tile were imported into the U.S.
Industry leaders continue to monitor
the stability of housing and commercial
recovery, the availability of credit, consumer
confidence and energy prices.
“To meet these challenges, we continue
to improve productivity at our plants with
newer, faster and more efficient equipment,”
said Lori Kirk-Rolley, vice president of brand
marketing for Dal-Tile.
Added Sean Cilona, Florida Tile marketing
director, “Overall, 2013 was a great year, but
some of the biggest challenges are still trying
to get customers to come out of their shell,
so to speak, and step out on commitment to
inventory and mid to higher priced products.
Everyone has been so scared and reserved for
so long, I think we are all hesitant to make big
investments.” The company launched a lot of
new product and discontinued others which
was a challenge, he said. “That is never easy for
an organization or customer base, but we are
doing it for the betterment of the group and the
bumps in the road now will lead to an overall
stronger product offering,” he explained.
Rising raw materials
There has been industry-wide concern
related to raw material costs.
“We’ve responded by focusing on alternative
sources to offset the need for virgin raw materials,” said Mark Shannon, executive vice president of sales for Crossville. “Our partnership
with TOTO has enabled us to generate feedstock
through the recycling of materials that would
have otherwise been land filled. This approach
supports our commitment to sustainability and
reduces the environmental impact of both our
and TOTO’s manufacturing processes.”
At Dal-Tile, they also look for alternate
sources for raw materials but have also moved
to consolidate freight to reduce overall costs,
added Kirk-Rolley.
Global challenges
“Overseas inflation and interest rates are
causing large changes in exchange rates,
which hampers the ability to make long-term
plans when it comes to imported product,”
Shah said. “Domestically, a large issue is the
non-renewal of GSP [generalized system of
preferences]. This is significantly raising the
prices of imported products.” As interest increases for ceramic tile,
business is getting more competitive. Home
centers expanded their focus on ceramic tile
over the last 12 to 18 months, increasing
competition among independent flooring
retailers in the ceramic category.
At the same time, “Floor covering retailers
who invest in the tile and stone category, and
commit to it, continue to show strong signs
of growth, particularly in the higher end of
the market,” Kirk-Rolley said.
19
Another rapidly accelerating trend is that
more and more retailers such as Lumber Liquidators and the Tile Shop are emerging and going
after the consumer directly, she added. “This is
an emerging opportunity for us, but also a competitive threat if we’re not continuing to build
relationships at the wholesale level,” she noted.
While consumer demand for tile and
stone increases, marketers are shifting strategies to reach them, particularly to social
media. The goal: to provide product information while driving the consumers back to
the brick-and-mortar showroom whenever
possible to make purchases.
MS International introduced a new online
application that helps customers visualize MSI
products in different kitchen settings. Showroom sales people can use the Kitchen Visualizer to mix and match cabinet colors with a
variety of stone and tile surface options.
Dal-Tile and American Olean re-launched
their websites in response to a usability study.
“In just a few months, we’ve seen significant
increases in overall website traffic and page
engagement, reductions in home page bounce
rate and an increase in unique visitors per
month,” Kirk-Rolley said.
The companies also converted their traditional print catalogs to virtual catalogs that can
be accessed online, offline and through various
devices such as smart phones and tablets.
Integration strategy
Dal-Tile & Marazzi Group
Dal-Tile recently completed the integration of the
U.S. business of The Marazzi Group. Floor Covering
Weekly spoke with Gianni Mattioli, executive vice
president of marketing and research & development,
and Jim Fanning, senior vice president of home center
and distributor sales, to discuss the merger and the
expectations of the business moving forward.
Jim Fanning
Gianni Mattioli
How did you manage customer expectations during the merger?
Fanning: When you have a merger of companies
this size, there is a lot of back-office and behindthe-scenes work that happens, systems integration, billing, and we attempted to make it blind
to the customer so that they would continue to
see the same look and feel that we are behind
them 100 percent. Five or six months later, it
has gone very well. We have been out talking to
our customers reassuring them that the business
they have done with Marazzi, Ragno, American
Olean and Dal-Tile is the same.
that goes on before the actual close and coming
together of the companies. Tactically, there
are a bunch of meetings and events around
integration, clarifying and defining our strategies among our employees. If you look across
industrial America, and mergers in general,
there two types: growth opportunity ones and
consolidation orientated ones. This is not a
strategy of companies coming together and
laying off 20 percent of the workforce. This is
a growth strategy and our market is growing.
We intend to grow faster than the market,
expand our capacity and we are bullish on the
market. That is the message we brought to our
Mattioli: We have new product and pro- employees on day one: keep focused on 2013
grams, and we have definitely tried to limit because it is the driver for 2014 and beyond.
any disruption for the customers. From all
the comments we are hearing, I think we Mattioli: Our overall strategy is to keep growhave accomplished that.
ing, to grow faster than the market grows, and
we think we can accomplish that. In order to
How did you bring the two companies do so, we are trying to get the best of both comtogether culturally?
panies. [In Dal-Tile] You have this very large
Fanning: That is a function of the planning
December 23, 2013
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Demand, increase
a ventilated porcelain stone façade, in partnership with Shackerley of England.
“These endeavors come on the heels of the
2012 launch of Laminam by Crossville, our
exclusive distributorship of Laminam porcelain panel collections in the U.S.,” Shannon
said. “These strategic partnerships allow us
to participate in new categories and enjoy
opportunities that wouldn’t have been open
to us previously.”
Crossville rolled out a new retailer program
this year that was created to bridge the gap
between professional, small firm designers and
retailers — offering a place where they can work
one-on-one with their clients.
Advancements in technology, such as porcelain panels, have introduced a new need for
more training education among contractors.
“It’s essential that installers know how to
correctly install large-format panels, and
we’ve taken a lead in bringing them practical knowledge, preparing them for the
growing wave of large format panel installations,” Shannon said.
really engrained in the tile and stone industry,
and for some people, their entire careers have
been around these brands. There is no big
bang theory or real disruptive changes that we
company, very structured, with a lot of infra- have planned. [Each brand has] carved out its
structure. Then you have Marazzi, which is a place in the market and we have looked at how
smaller company overall, and with an Italian to expand their positions.
philosophy to be more nimble, faster, with a
higher level of flexibility. If we can merge the What can flooring retailers and distributors
two at some point, we have a strong point in expect from this merger moving forward?
a market that is changing very fast. Even with Fanning: I think some things they can
our size, we need to be able to do that and we expect. Certainly this combination of what I
have termed capacity and capability. We are
are moving in the right direction already.
enhancing both through this merger. From
How will the brands work together or com- a North American production standpoint,
Marazzi and Dal-Tile have clearly — by far
pete within the U.S. market?
Fanning: If you look at the four brands, and — the most capacity in the North American
even including Mohawk, you have brands that market. Being able to reach back into Italy to
have been in the market for decades. They are the design community, and the science and
manufacturing of tile, and bringing that to the
U.S. market, you are going to see an accelerated pace, better products, better trends, better
designs. Accelerating the Cersaie trending to
the U.S. market — we will be able to turbo
charge that, which is important to the commercial market and the green community.
Crossville, which continues to create a
strong presence through blogs and social
media is using strategic partnerships to
position itself for growth. The company partnered with TOTO to introduce Hydrotect,
bringing the latest generation of air-purifying,
self-cleaning properties to its porcelain tile
collections. Crossville also launched SureClad,
Integration
Mattioli: If possible, we will have an even
stronger focus on the product in the future.
We want to get as close to the market as possible in terms of product development. We
will add more capacity in that we will have an
expansion in the Sunnyvale [Texas] plant. It
will be one of the most state-of-the-art plants
worldwide and certainly in the U.S. It will
allow us to go into larger sizes, 24 X 48 and
plank, and more of the products you have
seen in the latest Cersaie. FCW FCW
Correction
Correction
Corrections
Corrections
Marketplace
The New Leader
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2014 Mohawk
noted, “This is for retailers who want to
create a premium destination. The life of the
display itself is more useable than in the past
and holds up to 40 styles.”
The system, said the company, was in direct
response to the streamlined launch of the soft
category a year ago. In 2014, Mohawk will add
two new tonal LCL patterns, two solid LCL
products and a textured loop with fleck and a
70 ounce solid texture with 40 color options.
New in the EverStrand brand is EverStrand
Soft Appeal. Noted Duncan, “EverStrand Soft
Appeal represents the next generation of PET
carpet innovation. With our patented Continuum process, this collection of carpets is
soft, beautiful and easy to maintain.”
Karastan
Introductions to the Kashmere collection
— nine total nylon styles — represent the
ultimate in carpet styling. “We are investing in
the brand and the product,” said Bill Storey,
senior vice president of sales, Karastan, noting
that the high end of the market today is strong.
Karastan offered SmartStrand Silk and
solid and blended wool carpets as well. “Wool
performs, it lasts forever,” he said. “We are
taking wool to a new level of softness with
Worsted Wool.” FCW FCW
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Call: (516) 227-1407
Fax: (516) 227-1342
Next up in FCW,
January 13, 2014 Issue
• SURFACES
• Wool Carpet
• Software I
• Adhesives - Quality is the
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12/16/13 12:24 PM
22 The Last Word
Fast times in flooring (Part II)
O
f the many profound changes
we’ve witnessed this year, one
of the most dramatic has to be
in carpet: Mills are making major investments in plants and fiber systems as both
PET and “soft” have captured significant
and growing share of the market. With
three major fiber systems to choose
from, consumers have more reasons than ever to select carpet.
It has also reenergized the mills, and will hopefully inspire them
to advertise more directly to the consumer to drive interest, an
area where they remain woefully, painfully inadequate.
In distribution, large companies are becoming stronger as
they gobble up chunks of the market left behind by weakened
competitors. That’s good news since distribution plays such a
critical role. Add the fact that many suppliers are simply not up
to the task of going direct — even in limited markets — and
you’ll see why strong distribution is a good thing.
Hanley-Wood Expositions is also getting bigger with its
acquisitions of the Greenbuild show and its expansion into
the International Surface Event that includes the Tile show,
Stone Expo, Surfaces and now an October event in Miami
Beach. In spite of the continued fracturing of the flooring
market, industry growth should make Hanley-Wood’s play
to make its shows more important a solid bet, even if the
Miami event remains in question.
Mohawk has become a giant. With its recent acquisitions,
Mohawk has become a behemoth across several of the major
categories it produces — carpet, ceramic tile, patented locking
systems and laminate. Will this change the way the company
goes to market? We’ll have to wait and see.
Something that might have gone unnoticed is the
announcement by INSTALL that it would guarantee all of the
installations made by its certified installers. I think that could
have profound implications if retailers are willing to play up
the value of professional installation. Frankly, it is inconceivable why they wouldn’t since that is what differentiates specialty retailers from others and is what delivers real value to the
consumer. It is also why Home Depot has worked so hard to
devalue installation with its low-ball installation offers.
Finally, the Internet has emerged as the single most powerful weapon for specialty retailers to communicate with consumers. That’s not new. What is also not new is that no one
has come up with a complete Internet offering. If I’m a retailer
running a business, what I don’t want is to have to learn a
completely separate discipline — Internet marketing — which
is complex, expensive, time consuming and highly technical.
Instead, I want someone to offer me a complete package that is
worry-free. Ideally it comes from buying groups and franchises,
from manufacturers or even from the World Floor Covering
Association, but it should provide me with all the tools I need
to run my online presence with a minimum investment of
time. That is something I bet most retailers would be willing to
pay a premium for. The need is certainly there.
— Santiago Montero
The year in FCW
F
or better or worse, I like to take time at the end of one
year, beginning of the next, to look back, assess how
things were, see what the year was all about and begin
to map out how to make the next one better.
This year I decided to go through my editorials to see what
the year was all about, what was on my mind and yours.
It was a meaningful exercise for a couple of reasons. First,
it became really clear that what was going on at FCW was a
lot. We all spent a significant amount of time on the road,
be it a convention, seminar, vendor and retail one-on-one
meetings or a special event staying plugged in to all that was
going on outside of our own office.
We tackled emerging and tough industry challenges and
we dedicated full issues to important topics like Made in
America and Green, and we addressed the growing global
market with our all new dedicated World Marketplace issue.
Of course FCW's much anticipated State of the Industry
Report is an anchor of the year’s line-up. One distributor at
NAFCD asked — half seriously — if we could possibly deliver
that issue just a bit sooner in the year because it was an important part of his company’s business plan. That won’t likely
happen as our numbers are based on real government data and
a painstaking process.
Even in the editorials, we were diligent exploring the Gen
X & Y consumer as well as education at the store level. Edu-
cation is something we will continue
to talk about as we further develop
our Education Center on FCW1.com,
a clearing house for everything the
industry has to offer.
We challenged you to reenergize your
retail space and take advantage of what
your aligned group has to offer; and, we
encouraged you to tell your story in a
meaningful way to your customer.
Another hot topic this year was
all of the investments being made in
the flooring industry. We did a great job all year of bringing
you the news but we also dug deep and looked at what all the
millions being spent, especially here in the U.S., really means.
If you haven’t read our Outlook 2014 issue, you should. The
larger message is that we are again building and growing the
floor covering industry.
Lastly, I received a request from a dealer in Upstate N.Y.
who asked that I address the dress code on the selling floor.
I didn’t really expect the large amount of positive feedback
on that one. But it clearly struck a chord. And when I talked
about my hometown Pittsburgh, it also prompted response.
Both of these editorials covered simple things — how to
present yourself for the job you have and basic work ethic.
That was another running theme for 2013: The basics are the
things that will keep you moving into the future.
Welcome to 2014!
— Amy Joyce Rush
Wishing all of our readers a very happy
Holiday season and a Happy New Year!
— The Staff at Floor Covering Weekly.
The Industry’s Business News & Information Resource
FCW Editorial and Sales Headquarters
50 Charles Lindbergh Blvd., Suite 100, Uniondale, NY 11553
(516) 229-3600 • FAX (516) 227-1342
Editorial (516) 229-3600 Fax (516) 227-1342
Advertising (770) 919-7747 Fax (770) 919-1348
Classified Advertising (516) 227-1407 Fax (516) 227-1342
Editorial
Santiago Montero Publisher & Editor in Chief (516) 229-3617 [email protected]
Amy Joyce Rush Managing Editor (516) 227-1421 [email protected]
Kimberly Gavin Editor at Large (706) 278-3690 [email protected]
Mallory Cruise Assistant Managing Editor (516) 227-1361 [email protected]
Brittany Walsh Assistant Editor (516) 227-1358 [email protected]
Janet Herlihy (361) 906-1117 [email protected]
Columnists
Jon Trivers I take the floor (530) 876-8454 [email protected]
Kermit Baker Beyond the numbers [email protected]
Chris Ramey Strategic insights (561) 876-8077 [email protected]
Marge Redmond Heard on Main Street [email protected]
Tom Jennings First things first (785) 843-1678 [email protected]
Rhonda Robinson Making What Matters Most Happen (541) 383-8044 Rhonda @RobinsonRo1.com
Advertising
Southeast, Midwest, West Coast U.S. & Canada
Charlton Calhoun (770) 919-7747 Fax (770) 919-1348 [email protected]
Northeast U.S.
Cal Calhoun (770) 919-7747 Fax (770) 919-1348 [email protected]
Classified Ads
Stacey Iaccino (516) 227-1407 Fax (516) 227-1342 [email protected]
Production
Thomas Young Group Production Manager (516) 227-1369 [email protected]
Matthew Lippl Production Artist (516) 227-1354 [email protected]
Administration
Sherridan Basdeo Advertising Administrator (516) 227-1307 [email protected]
Carolyn Giroux Audience Development Director (516) 227-1376 [email protected]
Adriana Marzovilla Financial Manager (516) 227-1364 [email protected]
Steven R. Swartz President & Chief Executive Officer
William R. Hearst III Chairman
Frank A. Bennack Jr. Executive Vice Chairman
Richard P. Malloch Group Head & President
Steven A. Hobbs Executive VP & Deputy Group Head
Robert D. Wilbanks Group Controller
Sales Headquarters 50 Charles Lindbergh Blvd., Suite 100,
Uniondale, NY 11553 (516) 229-3600 • FAX (516) 227-1342
Floor Covering Weekly (ISSN-0015-3761) is published bi-monthly by Hearst
Business Communications, Inc./FCW Division, 50 Charles Lindbergh Blvd
Suite 100, Uniondale, NY 11553. Periodicals postage paid at Uniondale, NY
and additional mailing offices. Subscription rates: Domestic: $25 per year,
$48 two years; Canada: $60 per year, $110 two years. Sales Agreement No.
4001287. Foreign: $174 airmail. Single copy Domestic: $4.00, Canada: $6.00.
Printed in the U.S.A. POSTMASTER: Send address changes to FLOOR
COVERING WEEKLY, PO Box 3012, Northbrook, IL 60065.
To subscribe: call (866) 813-3752 or go to fcw1.com/subscribe
For reprints of articles: Wright’s Media (877) 652-5295
12/17/13 1:09 PM
12/12/13 4:13 PM
12/18/13 9:11 AM

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