August 8/15, 2016; Volume 31, Number 4
By Steven Feldman
It is rare to find multi-million dollar companies in this country run by 29 year olds, once you get past the Mark Zuckerbergs of the world. It is even more rare when that 29-year-old is a woman. And when that 29-year-old woman has only been in this country for seven years, well….
Flavia Baggio has been running IndusParquet’s North American operations since 2009. She has made a huge difference, not only for her company but also in her efforts of promoting the beauty and value of Brazilian hardwood to U.S. distributors and retailers. And that has been the easy part.
Baggio’s path has been anything but easy. In fact, when she landed on these shores seven years ago her immediate task at hand was daunting. Basically, she was charged with cleaning up a big mess—a mess that for some companies would have led to the sounding of their death knell.
A bit of history. Up until that time, IndusParquet’s presence in the U.S. was as the primary hardwood flooring supplier to a major Brazilian hardwood flooring importer. With the onset of the economic crisis that began in 2007, sales of upper-end exotics struggled and resulted in financial troubles for IndusParquet’s customer. “We tried to accommodate them to keep the business and keep supply without disruption, but we were not successful,” Baggio said. “We had to have inventory. They decided to change their business model and we took over. So we basically went from being the major supplier to a large wood flooring company to establishing our own brand within a month.”
To say it wasn’t easy would be a gross understatement.
“I came here to solve the financial problem, but we couldn’t come up with a resolution,” she said. “We abruptly split ways, and we did not have proper inventory at the time. We had to get inventory. We didn’t have a computer system. We didn’t have employees. And we had to get everything done within a month. This was the damage control phase where we put out the fire.”
It took about six months before she could put her extinguisher away. “Fast forward, next we had to go through the stabilization phase. That is where we had to rethink everything.”
Baggio’s résumé would suggest she was less equipped to reinvent a company than to handle the financial end of things. But she had the one critical trait: intelligence. She had graduated from FGV in Sao Paolo with a Bachelor’s degree in Business Administration. She also lived in Italy for a period of time, where she attended Univerita Bocconi, one of the best business schools in Europe. That education paid dividends. She sought a career in the financial markets, and in applying for her first job with UBS, she beat out 300 people for the one position.
Stabilization simply meant trying to keep the business in the U.S. throughout that turbulent first year. “We had a major lawsuit,” Baggio said. “Distributors back then thought we were partnering up with our former customer to go direct and bypass them. That obviously was not the case.”
That wasn’t all. The company had to start from scratch with the IndusParquet brand as opposed to the former client’s established brand, which had been known for 20-plus years. “It was the same products but a new brand,” Baggio said. “Thankfully, together with our distributors, we were able to convince the dealers to trust us. They knew the products and our quality.”
Long story short: Today the business is doing greater volume than ever before, up 50% in 2015 from 2014.
A lot of that has to do with what Baggio refers to as her “down to earth” philosophy. “Let’s do what we have to do at the right time and not exceed the budget to achieve that goal.” That, along with execution of the game plan. “We created the structure of the company in a very short period of time. And now that we have settled down with the team we have in place, we can determine our next steps.”
According to Jason Strong, vice president of sales, IndusParquet North America, that has been Flavia’s biggest contribution. “Executing fast when we needed fast and now taking the time to see the future,” he said. “She showed amazing calmness and resolve in the most difficult situations.”
With damage control as phase 1 and stabilization as phase 2, Baggio and IndusParquet are now embarking on phase 3: a rebranding, or revamping of the IndusParquet product line where the new fashions of Brazilian hardwood flooring are brought to market, a bit of a departure from where the company built its reputation: as a manufacturer of exotic hardwood. “As a team we decided to take the company in a little different direction,” she said. “After we had to restructure, settle and organize, we had to rethink the entire business model and really digest and identify our opportunities and competitive advantages.”
To that end, IndusParquet will be a design-driven company. “We are launching a new program with Brazilian flare and design,” she said. “This is creation with implementation and execution. Getting the right program, the right display, the right samples, the right inventory at the right price point and at the right time. That is what we will convey to the customers.”
The line is launching with 12 new, low-gloss SKUs in the popular brown and gray tones and employing just two species: Copaiba and Peroba. “Copaiba is full of veins; lots of character,” she said. “Peroba is a more uniform species and 30% harder than oak.” About 80% of the boards are 8 feet in length and 7½ inches wide. “The line responds to the trends of today’s American consumer at a price point that for the first time makes this type of product affordable to the masses.”
Her success has not been without challenges. “People notice me more because of my accent. Sometimes in a good way, sometimes in a bad way. The good way is that people may pay more attention to me; the bad way being you have to adapt to the culture quickly so people can respect the differences within their own culture.”
As an attractive woman on the south side of 30, earning the respect of a male-dominated industry can also be a challenge for some. But not Baggio. “I sought to gain respect simply by being myself and fighting for my own principles and values that were learned from my family. If you have strong ethics and do the right thing you have respect. And if you come from another country and do the right thing, people respect you even more because you come from a different culture.”
Baggio has proven herself as a leader and mentor in the short time she has been in the U.S. She has been a board member of both the National Wood Flooring Association and North American Association of Floor Covering Distributors from 2013-15. She will also be doing some speaking in the coming months.
What advice would she give a younger woman starting out in this industry? “Follow your beliefs, principles and values. Be persistent and never give up. With all the challenges and difficulties I sometimes face, I love it. I never want to settle into a comfortable position. The more challenging the more interesting. My advice is to throw yourself to the challenges.”
The challenge right now is running and growing IndusParquet. “My dad taught me to be humble and have my feet on the ground,” she said. “The most important thing is that businesses need to be successful in order to be eternal. Nothing is worth it if you don’t make money. Just as important, allowing floor covering dealers to make money with your product.”