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4th quarter retail outlook: Flooring retailers closing out 2018 on a high note

November 26/December 3, 2018: Volume 34, Issue 12

By Ken Ryan

 

Flooring dealers may be sad to bid adieu to 2018 as a strong fourth quarter has propelled many specialty retailers to better-than-expected results.

The only caveat: some signs of softening might spill over into 2019, worsened by the possibility of higher tariffs on Chinese flooring imports.

For now, however, many retailers are basking in the glow. “For us, 2018 has been a banner year, and the fourth quarter has not disappointed,” said Kevin Rose, president of Carpetland USA, Rockford, Ill., who cited strong activity in the Chicago suburbs and robust activity in the commercial and retail sectors.

Jon West, owner of Chillicothe Carpet, Chillicothe, Ohio, is also enjoying a strong fourth quarter. “We’re on pace to break our yearly record, and we’re also on pace to meet and possibly exceed our record from last year’s fourth quarter. I look for us to stay on pace through 2019 with 10% growth.”

The feeling is much the same at San Antonio-based Atlas Floors Carpet One. “The fourth quarter is shaping up to be the best quarter of the year for us, which it historically is,” said Billy Mahone III, vice president of operations. “We got off to a slower start to Q4 this year, which could probably be attributed to uncertainty caused by the November primaries. However, we are rocking and rolling now.”

Rob Elder, co-owner of Hiller Carpet, Rochester, Minn., told FCNews the last quarter is shaping up to be nothing short of amazing. “Traffic is great, sales are great and the LVP/LVT category continues to lead the way.”

Gainesville CarpetsPlus Color Tile is another dealer enjoying a stellar fourth quarter, with business up 27% from last year’s period, according to Josh Elder, co-owner. “I am optimistic that we will finish strong. We have some projects lined up for the beginning of 2019, which will get us off to a good start.”

A balance of commercial, new construction and retail has been steadily driving sales for Appleton, Wis.-based D&M Interiors, Flooring America. “An outstanding sales month in October will help us to have a strong end to the year,” said Bill Huss, owner.

Dealers have benefited by favorable economic conditions, including a high level of confidence in job security with unemployment at 3.7%, the lowest it has been since 1969. “This is allowing consumers to utilize their disposable income with a level of comfort that has not been there in the past recent years,” Rose stated.

Amidst a strong economy, some dealers are implementing their own initiatives to further drive business. Warren, Mich.-based Art Van Flooring, for instance, is closing out a strong 2018 on the heels of some aggressive moves made earlier in the year. “The biggest business move in 2018 is the big investment made in upgrading our online portfolio by not only adding products available for online purchase but also the big expansion of products that are available for our customers to view before they come into our showroom,” said Sean O’Rourke, director of purchasing and merchandising. “We have seen an immediate increase in sales of the products featured online, and it has helped our Shop @ Home business immensely.”

Art Van Flooring also expanded its portfolio by adding ceramic and porcelain tile as well as Hunter Douglas window treatments.

Several dealers have noticed higher sales in Main Street commercial. Case in point is Montgomery’s CarpetsPlus Color Tile in Venice, Fla. “We’ve had a busy fourth quarter thanks to Main Street projects,” said Mike Montgomery, co-owner. “These projects usually seem to gain traction in the second and third quarters, so that would be the biggest surprise for us as well as a good fourth-quarter return.”

Joseph Stern, owner of Brooklyn-based Boro Rug & Carpet, echoed those sentiments, citing the company’s fourth quarter growth with Main Street commercial business. “2018 was very strong for us. We have had a lot of growth on the Main Street commercial side partly because construction in Brooklyn is growing at a very strong pace.”

Stern also noted the lack of competition in the area, which has been dwindling of late, and the store’s strong installation team for its Main Street success.

However, not everyone is singing praises. For dealers like Rick Wiebe, co-owner, Carpet Colour Centre, Red Lake Alberta, being located in a province currently dealing with the ups and downs of the oil market, is taking its toll on business. “With the price of our oil so low, things are just slow. Our new home construction market is a disaster. We have a little light in the commercial section, but overall it is and has been tough.”

Wiebe expects more of the same in 2019 unless there are some major pipeline announcements that will swing the momentum the other way. “Competition is still fierce, and we are doing everything to get as much of the work as we can.”