When Belgium-based IVC wanted to put a recognizable face on its U.S. operations, the company turned to industry veteran Paul Murfin, who had spent the last six years as vice president of sales and distribution for industry-leading Armstrong World Industries’ flooring operations. Murfin, who also had high- level stints at Beaulieu of America and former Midwest distributor Misco Shawnee, joins a company that is certainly in growth mode having just completed the construction of a $75 million plant in Dalton. FCNews editorial director and associate publisher Steven Feldman recently caught up with Murfin to talk about his decision to leave Armstrong and essentially trade volume for potential.
What attracted you to IVC?
For better or worse, I am now a veteran of the industry. If you are going to stay in the flooring industry, and you look at where you are today and where future opportunities may lie, there are not going to be many attractive options. This represents an opportunity to do a bigger job in a smaller company.
IVC was attractive to me because it is a company that has grown very rapidly. It has built a wonderful, new plant in Dalton, so it is positioned for growth in the U.S. The vinyl segment as a whole is enjoying somewhat of a resurgence, and fiberglass as a category is growing. Now we are getting into LVT. So IVC is positioned in arguably the two fastest growing categories in the industry. We have a fantastic product line, we are a low-cost manufacturer, and we have an owner who is willing to help us grow. I don’t know what else you could ask for.
I know you haven’t been on the job for a month yet, but what do you see as IVC’s strengths?
IVC is privately held, and the owner of the company is very eager to grow the business. We are committed to winning in the long run and are not held hostage to quarterly results. In an industry that is very mature, we have a state-of-the-art facility that will put us in the position to make material at a very attractive price. Because we are a smaller company, we are very nimble, so we can move and react quickly. If we make a decision to do something, we do it.
Where are you focusing your attention right now?
The No. 1 thing I’m doing is listening. I am reaching out to my new colleagues and as many customers as we can to get as much feedback as possible on how we can do things better. The immediate goal is to get up to speed as quickly as possible.
What’s so special about IVC’s sheet line?
First and foremost, color and design. We have a remarkable depth of color, clarity of pattern. Our designs are second to none. IVC has made sheet vinyl fashionable. And the industry is warming up to glass. It is easier and less expensive to install. I’m not saying felt is dead, but it is not the future of vinyl.
Talk a little about the new LVT collection.
The company will complete a new manufacturing facility in Belgium that will be up and running by the first of the year. The collection is being developed as we speak. I think it’s important to point out that while most people will be importing from the Far East, we will be manufacturing product in Belgium. The obvious advantage is that Europe is closer than Asia. If you are buying containers from China, you are probably waiting 12 weeks for product. If you are buying from Europe, you are probably waiting only about four weeks.
Are there any plans to manufacturer LVT in the U.S.?
Our location in Georgia has sufficient space available to build an LVT site. So provided we are successful in building the market in the U.S., we would certainly be interested in building a plant here, too.
What do you view as short-term opportunities?
Many people look at IVC and have seen the relationship we have developed with CCA [Global Partners]. The immediate opportunity is for the company to explore new channels, such as commercial, and get deeper into the existing channels such as independent retail. While we have the relationship with CCA, non-aligned retailers may not be so familiar with us. We need to spread the word and work with our distribution partners to do this.
What about the challenges you face?
We have this fabulous new plant, which has an enormous appetite. So we have to get the plant as busy as possible. Long term, it’s about getting into more categories, like LVT and commercial. We are going to have to go through a learning curve in the new channels.
Talk about some of the similarities and differences between your past and present employer.
The obvious similarity is we are both in the same business and we sell into the same channels. So that all feels familiar. The difference is Armstrong is an established company, while IVC is much smaller and less established. When you are the market leader, which Armstrong is, it’s hard to get that extra percentage point of market share. So even though the market is tough, IVC still has an opportunity to grow significantly because we don’t have anywhere near the share Armstrong has. Finally, we are focused on the vinyl segment, where as Armstrong is a portfolio company. There are benefits and drawbacks to both, but we are not distracted by having other categories such as hardwood or laminate.
What did you learn at Armstrong over the past six years that will play to your advantage at IVC?
Armstrong is the industry leader that does a lot of things very well. As a result, there is so much I have learned there. But, I also learned a lot at Beaulieu and Misco Shawnee. The important thing is to learn from all that experience and apply the good things to your next role. If you forced me to identify one thing I learned at Armstrong, it would be to be more analytical. You just can’t allow this to slow you down.
Who else do you view as strong competitors?
If the future of the sheet vinyl business is glass, which I believe it is, the primary competitors are Armstrong, Tarkett and Mannington. On the LVT side, there are any number of competitors. It is a hot category right now, so it remains to be seen how this plays out.
How are IVC’s products priced relative to the competition?
The opportunity we present to everyone in the channel is to make an above average gross margin.
Marketing plans?
It’s too early to answer that question. I’m coming from a company that was a consumer-driven brand. And it is way too expensive and would take way too long to establish a consumer brand. So we will focus our efforts and energy on the trade.
IVC to this point has been more focused on industry partnerships than establishing the brand. We will have to see what the next steps are.
Any specifics?
The most important thing for us is to get our message across to retailers, contractors and distributors that we have a fantastic collection of products they can make money with. We probably have some education to do to convey why our products are different and superior to others.
Will you be exhibiting at Surfaces?
Will not be showing on the show floor. But we will be meeting with our primary distributors and key customers.
Talk about that decision.
We just revamped our residential vinyl collection, which is called Flexitec V—lots of new products and a wonderful new display. Our distributors are taking it to market as we speak. The decision not to be on the show floor at Surfaces is driven by the fact we will focus our investments on other opportunities, such as the new LVT line and new commercial line.
How do you view the future of resilient?
I think it has a very healthy future. Both sheet vinyl and LVT are winning back favor and are fast growing categories. However, I think we are in an industry that has a lot of capacity and not enough demand, so there probably will be some consolidation.
Final thoughts?
First of all, I’m very fortunate to have been given this opportunity. I’m looking forward to adding my U.S. experience to IVC and building on the unbelievable foundation that has already been put into place. You may think I am crazy but I believe IVC has the potential to be the most exciting company in the flooring industry. Our product line is fantastic, we are involved in some of the fastest growing categories, we are eager to grow and have the infrastructure to support it, and we are located in Georgia, where it is easy to get material in and out. I think we can attract the best people in the industry to come and work for us as we represent an exciting, profitable alternative to dealers, contractors and distributors.