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Executive forecast: Resilient—Rigid core, WPC-type products are expected to maintain upward trajectory

December 10/17, 2018: Volume 34, Issue 14

By Lindsay Baillie

 

Despite uncertainty around U.S. tariffs on Chinese imports and the projected slowdown in housing starts, resilient manufacturers are confident heading into 2019. LVT, WPC and SPC segments are expected to continue to lead the category to another year of double digit growth, capturing more market share. Many manufacturers are launching new designs and technologies to take the category to the next level.

 

Thomas Baert
President
CFL

What is your projection for category growth next year? We’re hoping for a 25% growth.

What segments and/or products will fuel this growth? We expect that the fastest growing subcategory of resilient, SPC and other rigid products will continue to be the category’s main driver for growth.

What is the predicted growth of your company in 2019? We’re forecasting strong double-digit growth for 2019.

What is the “X factor” that will impact your business next year? N/A

Where do you see opportunities for next year? Challenges? We expect rigid to continue to drive our company’s growth next year. The fact of the matter is more than 90% of rigid is currently made in China. We’ve been working fast to set up new fully integrated plants in several countries outside China. While many are talking, we are already doing.

What are some of your biggest initiatives for 2019? Besides having all three new facilities up and running outside China by January, we will continue to strengthen our distributor and retailer partnerships through stronger marketing support and offering a wide range of innovations.

 

Larry Browder
Chief sales/marketing officer
Karndean Designflooring

What is your projection for category growth next year? The LVT market should again experience strong double-digit growth in 2019. The U.S. Government’s decision on another tariff could certainly have an impact on certain products and competitors, but much remains to be seen at this time.

What segments and/or products will fuel this growth? Commercially, loose lay and glue-down will continue to be key product formats, but we will see a ramp up of rigid core in segments where sound reduction and speed of installation are drivers. In retail, rigid core should continue to fuel the growth, though glue-down and loose lay still command a large portion of the market.

What is the predicted growth of your company in 2019? We expect to outpace the market in every segment. Our expertise in LVT across glue-down, rigid core and loose lay uniquely positions us to be a premier value-added supplier to our customers.

What is the “X factor” that will impact your business next year? Evolution of our “See Flooring Differently” campaign that we launched this year will be key for us. Our premium products, selection, services and brand provide our customers with a differentiated partner in Karndean that allows them to “see” and “sell flooring differently.”

Where do you see opportunities for next year? Challenges? Dealers buying into the commodity game will always be a challenge for the industry, but it also provides Karndean Designflooring the opportunity to showcase how our unique, component-style business model can help our customers make more money.

What are some of your biggest initiatives for 2019? We have significant launches planned in all three product categories: rigid core, loose lay and gluedown.

 

Shane Calloway
President and CEO
EarthWerks

What is your projection for category growth next year? We expect the overall LVT category will continue to experience double digit growth into 2019.

What segments/products will fuel this growth? SPC will fuel growth, but EarthWerks continues to see strong growth within the glue-down segment for the multi-family and commercial markets.

What is the predicted growth of your company in 2019? We plan to outperform the market in 2019 by expanding the strategies we have already put into place, as well as by building a stronger supply chain with our best and most reliable vendors.

What is the “X factor” that will impact your business next year? Style and design. Our team works diligently to make an impact in the market, relying on our innovation and attention to detail to stand out in a competitive category.

Where do you see opportunities for next year? Challenges? Educating the retail salesperson will be both an opportunity and a challenge. We need to make sure we are educating them on our products—what stands out, how to help consumers find the right products for their needs and why EarthWerks will meet those needs and more.

What are some of your biggest initiatives for 2019? Having a successful product launch for 2019 is our biggest initiative.

 

Piet Dossche
CEO
USFloors

What is your projection for category growth next year? We continue to see double-digit growth in the LVT category for 2019. Growth will be a bit tempered compared to current year levels. Absolute dollar sales growth will continue to exceed this year’s volumes, with percentage growth below 2018 levels.

What segments and/or products will fuel this growth? Rigid core products and constructions will again be the big driver for growth next year, taking market share from all categories. Rigid constructions in plank, tile as well as engineered wood formats with a common ‘waterproof’ denominator will fuel both top and bottom line in every channel of our industry.

What is the predicted growth of your company in 2019? As previously mentioned, our 2019 budgets call for a double-digit growth albeit somewhat reduced from 2018 levels.

What is the “X factor” that will impact your business next year? Increased capital spending to support and increase our U.S. manufacturing will help us to realign our supply chain with more focus on domestic supply.

Where do you see opportunities for next year? Challenges? Opportunities are plentiful with this new rigid core expansion in full swing, and USFloors and Shaw Floors intend to take full advantage. The uncertainty surrounding the trade negotiations between the U.S. and China and the threat of further tariffs could present some challenges.

What are some of your biggest initiatives for 2019? Both Shaw Floors and USFloors are launching an incredible line-up of new product introductions, which again will revolutionize and disrupt our industry. Establishing COREtec as ‘the consumer brand’ for rigid core flooring is also a prime initiative and goal we set for the years to come.

 

Steven Ehrlich
Vice president sales and marketing
Novalis Innovative Flooring

What is your projection for category growth next year? We predict LVT will continue to grow at a double-digit pace in 2019. The category is continuing to take market share from all other categories.

What segments and/or products will fuel this growth? We believe the SPC segment will continue to fuel growth as it has the last two years. Product-wise, we’re seeing more interest in LVT that has cores, for that matter, in Main Street, multi-family and specified commercial applications.

What is the predicted growth of your company in 2019? We are tracking along and exceeding with the category growth very well, thanks to growth in both our NovaFloor residential and AVA commercial brands.

What is the “X factor” that will impact your business next year? We plan to continue strengthening our presence in both this market with investments in logistics and service. We call it “connecting all the dots” for our customers in service and products.

Where do you see opportunities for next year? Becoming the supplier of choice in LVT for our customers. We are committed to service, partnership, innovation, reliability and cutting-edge thinking across the board. Challenges? Same as for any company in a highly dynamic product category—keeping pace.

What are some of your biggest initiatives for 2019? We are bringing out a whole new display system with our NovaFloor brand as well as new product developments. For example, a new premium rigid core collection that’s thicker, with attached underlayment and new sizes.

 

Jeff Fenwick
President and COO
Tarkett North America

What is your projection for category growth next year? The resilient market is still robust.

What segments and/or products will fuel this growth? LVT will be a continued source of growth for resilient flooring. Technological developments continue to happen in the market around LVT. Current market intelligence points toward several segments that are well positioned for growth next year in both commercial and residential markets.

What is the predicted growth of your company in 2019? N/A

What is the “X factor” that will impact your business next year? It is difficult to pin down the one thing that will impact the business next year. However, we are most excited for new product launches, Tarkett’s continued leadership in sustainability initiatives and of course our acquisition of Lexmark.

Where do you see opportunities for next year? Challenges? Next year will certainly be one with plenty of opportunities, but it will have its challenges.

What are some of your biggest initiatives for 2019? We want to continue to lead the way in innovative products and designs and focus on being a complete flooring solution for our customers in all spaces.

 

Chris O’Connor
President and COO
Congoleum

What is your projection for category growth next year? For the resilient category, we expect 3% to 5% overall growth.

What segments and/or products will fuel this growth? LVT will certainly continue to drive the lion’s share of the growth with emphasis on rigid products and a growing concentration of eco-based solutions like our PVC-free Cleo products.

What is the predicted growth of your company in 2019? The company has geared up for significant growth in 2019 with an anticipated 15% to 20% overall growth.

What is the “X factor” that will impact your business next year? We previewed Cleo Home for the first time at the 2018 TISE show and the reaction was incredible. The platform has been a lightning rod in generating excitement for our existing distributors and has opened several opportunities for incremental distribution across the U.S.

Where do you see opportunities for next year? Challenges? We have moved to a regional model for distribution in the western half of the U.S., which represents an untapped opportunity. As for challenges, a potential slowing in residential housing starts that are connected to both increased pricing attached to tariffs and rising interest rates.

What are some of your biggest initiatives for 2019? The Cleo platform with its eco-forward construction and high-fidelity digital imaging has been well received in the residential market. Our biggest focus will be on launching Cleo Contract.

 

Michael Raskin
CEO
Raskin Industries

What is your projection for category growth next year? 25%

What segments and/or products will fuel this growth? Rigid core and acoustic-backed products.

What is the predicted growth of your company in 2019? 25%

What is the “X factor” that will impact your business next year? Design and marketing materials. We have new displays and more offerings. Our products are not being offered in big box stores, which allows us to market Raskin as a unique product with our proprietary designs and colors.

Where do you see opportunities for next year? Challenges? Tariffs are still not settled and currently at 10%. Our goal is to use this as an opportunity to show we are a very strong partner with diversified production in Korea, China and the U.S. We’ll be able to produce most of our products without any tariffs.

What are some of your biggest initiatives for 2019? Bigger better and larger displays. We will have displays that are more suited to sell our copyrighted designs and showcase them on larger boards.