Floorco Flooring Gallery offered to 5,300 members
By Steven Feldman
(Exclusive to FCNews)
Las Vegas—Alliance Flooring, parent company of CarpetsPlus Colortile and Carpetland, has entered into a strategic partnership with Nationwide Marketing Group, a resource group consisting of 5,300 members (14,000 storefronts) doing a collective $18 billion in sales, to offer flooring to its 3,300 furniture stores. The turn-key Floorco Flooring Gallery could potentially add around 500 members to Alliance while adding $1.5 million to $2 million to a participant’s top line.
Floorco Flooring Gallery will be a private label program exclusively for Nationwide members with Shaw and Mohawk as core suppliers. According to Ron Dunn, co-CEO of Alliance, the program will be attractive to furniture stores already in the flooring, those who may want to re-enter this category, or those who want to start from scratch.
The program launched at the Nationwide Primetime convention here Aug. 7 following a pilot with a few furniture dealers who had never been in the flooring business. Among the things they found attractive was no inventory requirement, margins averaging 40% and a private label. According to Dunn, it was determined that between 15% and 20% of Nationwide members wanted to enter flooring.
Those who take on the Floorco Flooring Gallery must commit 1,000 square feet. They will be required to have an individual salesperson exclusively devoted to flooring. “To succeed in floor covering you have to hire someone who knows the Xs and Os,” Dunn said. “We test launched this in a few furniture stores. Here’s what one of them said: “I didn’t realize we could knock on doors.”
Alliance will not have to solicit Nationwide members to take on the Floorco Flooring Gallery. Rather, Nationwide has 52 regional people that call on their own stores. “They’re the foot soldiers who will be selling this program,” Dunn said. “Our job is getting it set up.”
Nationwide has about 3,300 members who sell furniture, about 2,200 that sell appliances and 1,200 that sell electronics. A bunch of members cross over into other categories. In fact, some 200 are already into flooring and a few are CarpetsPlus Colortile members as well. John Laing, director of business development, Nationwide, said he is always looking to expand the product mix and has looked at segments like HVAC, countertops, cabinets and more. “We want to find categories that our members can participate in. They can jump into flooring very easily. It’s a category that’s adjacent to what they’re doing today. It helps make a house a home. The flooring opportunity popped up and has evolved to what we think is a great opportunity for our members.”
He believes any member can take on the Floorco Flooring Gallery, but furniture dealers represent the easiest opportunity. “They have the square footage. They already have designers on staff. But I'm not going to discourage anybody from looking at it because it’s an opportunity to make money. These appliance dealers are still struggling to make decent money and look for diversification themselves. Eight or nine years ago they got into bedding and that’s been a godsend. So there’s no reason why flooring shouldn’t be a good fit for many of our members.”
The partnership benefits Alliance in a few ways. First, it brings more size and volume to its suppliers, which makes it more important. Second is brain power. “You're going to see all kinds of things these guys have developed over the past 40 years that we haven’t had the attention to or the resources to do. We can now in a reciprocal way bring them to our members, including products as our members diversify.”
Of all the products that Nationwide members sell, Dunn believes the one that makes the most sense for CarpetsPlus Colortile members is mattresses. “We're talking with one of their suppliers that has a program that doesn’t take up a whole lot of space. It doesn’t require inventory and has margins of 60%.”
Dunn said the Floorco product mix will be mid-range to upper end, much like the CarpetsPlus Colortile lineup. Shaw, Mohawk, Dal-Tile and USFloors are the initial core suppliers primarily because of their vast warehousing capability to deliver product within two days. “In carpet, we’re taking 40 products from Shaw and 40 products form Mohawk, kind of the best of the best, and put them in a nice, private-label display with a color wall. So this becomes like their stocking board with next-day or two-day delivery on it.” The assortment also includes 40 SKUs of wood, 40 of LVT, 20 laminate samples and “a couple hundred” for ceramic. “We’re also sourcing out a whole custom rug display for them.”
An upgraded package is also available on an a la carte basis. Participating suppliers there include Armstrong, USFloors, Mannington, Tarkett, Emser, Dixie and Phenix.
Despite the potential for increased competition, CarpetsPlus Colortile members gave Alliance their blessing to pursue this program. “Keep in mind Nationwide will be going into the flooring business whether we do it or not,” Dunn said. “We said to our members, ‘Would you rather have it be us or someone else? They’re going to have all these things you will have access to where if they do it with someone else you won’t get.”
Nationwide a marketing group that started out in the 1970s with seven appliance dealers who thought they could buy better if they got together. That has evolved over the last 48 years to a group that sells appliances, consumer electronics furniture and bedding. Outdoor living started two years ago as a category we’re chasing hard.
“Our business model is really built on four pillars,” Laing said. “First is working with vendor partners to create programs that include pricing, merchandising, all the things you need to do to run your business from a vendor standpoint. The second most important pillar is getting footsteps in the door. The third is in-store experience. And the fourth is helping them run their business operationally—succession planning, all those things that are going to help these independents have long careers in their business.”
The typical Nationwide dealer is in the $4 million range, Laing said. “Our top 97 do $25 million or more retail business. Some are doing $200 million. And then there’s another group of 130 that are doing $8 million to $25 million. And then we have 5,000 that are doing under $8 million.”