Posted on

Armstrong Hardwood reborn under new name

Sale of wood division opens new opportunities to strengthen brands

January 21/28, 2019: Volume 34, Issue 17

By Ken Ryan

 

It was a move that many industry observers didn’t foresee—the divestiture of Armstrong Flooring’s wood products division via the sale of key assets to American Industrial Partners (AIP), an operationally oriented, middle-market private equity firm focused on buying and improving industrial businesses with operations in North America (FCNews, Nov. 12/19). The deal, valued at $100 million, allows Armstrong Flooring to focus solely on its resilient flooring business.

So, where does that leave well-known consumer brands such as Bruce, Capella and HomerWood—not to mention the intellectual property and human resources that supported the company’s marketing initiatives and manufacturing operations since Armstrong acquired the Triangle Pacific brand way back in 1998?

FCNews managing editor Reginald Tucker caught up with Michael Bell, AHF Products chief transition officer, and Wendy Booker, vice president of marketing and product development, to find out some of those answers.

What’s the new marketing strategy with respect to the Bruce, Capella, Armstrong brands?
Wendy Booker: From a marketing strategy standpoint, the No. 1 need is to truly listen to our customers. We’ve had extensive conversations with some of our distributor partners as well as other customers in terms of customizing products for their particular needs. So it really all starts with finding the right product portfolio opportunities for each customer. From a branding standpoint, we’re lucky to have a really strong stable of brands. We’ll have products with different positioning such as Bruce, which is our powerhouse brand. We will also continue to utilize the Armstrong Flooring brand, which has a lot of equity, for a couple of years. We will also be focused on reinvigorating the Bruce brand. We’ll be working on that from a digital standpoint as well as from a product portfolio standpoint. And, we have Capella, a brand that has taken a strong foothold as well in areas such as builder. It’s also starting to gain some traction in independent retail. Capella provides well-designed, well-constructed products at affordable prices. The last brand we’re really focusing on is HomerWood, which provides high-quality products for independent retailers. We’re also looking at commercial opportunities for HomerWood.

What about your plans for the Hartco brand? Robbins?
Booker: We do have opportunities for those as well in the works. We’re going to continue to look at what makes the most sense for the right customers at the right time. The focus is really on the right product portfolio for each customer for their individual markets. That’s where it all starts.

Will the brands be available to both the home centers and specialty retailers?
Booker: I would say that stratification is really going to take place within specific collections. We will have differentiated collections for each of the channels. We will be leveraging brands across multiple channels, but the collections will really provide some individualization and regional preferences associated with the product so our partners will have clear product differentiation.

What feedback have you had thus far regarding the sale and branding strategy?
Michael Bell: I think there’s a lot of optimism around what AIP brings to the party for us. Certainly as a standalone business focused solely on wood really positions us to give this business the focus it deserves while ensuring we’re meeting customer needs and doing it in a very vast and precise way.

Booker: I would echo that. I think people are excited about new product innovation and new product design opportunities as well. So there’s a lot of excitement around here and some opportunities we’ve been needing in our marketplace.

What’s does the “AHF” in AHF Products stand for?
Bell: It is a derivative of Armstrong Hardwood Flooring. It’s similar to what Armstrong did with cabinets, or ACIPI, which was originally Armstrong Cabinets Inc.

Booker: But, the name of the company is not Armstrong Hardwood Products in any way. The name is AHF Products. There’s a little confusion out there because of the acronym. It’s intuitive to think it’s Armstrong, but it’s not. It’s just a name on its own.

In a recent interview, Chris King, vice president of sales, AHF Products, said the company will enjoy greater flexibility to pursue strategic growth opportunities as a result of being 100% focused on the hardwood market. Any details on that?
Bell: Right out the gate we’ll listen closely to customers. We want to make sure we’re looking at the go-to-market process, customer needs and leveraging our distributors connectivity in the market. Next, is making sure our people processes systems are closer aligned with the markets and channels we serve. Again, focused on the customer, promoting much faster decision making and driving improved responsiveness.

Next, we’ll be doubling down on product innovation and working to build a really strong growth pipeline to reinforce our leadership position. As the category leader, we want to make sure we’re helping to create value so our customers can profitably grow their own businesses. Finally, we’re going to make sure we’re making the necessary investments to increase the health and vitality of our wood portfolio, whether that’s in capacity, capabilities, new products or even new market innovations.

Will the wood products still be made domestically?
Bell: We’ll go with the best combination that puts us in the optimal position to serve our customers. In this really dynamic market we’re in, you have to be opportunistic and then be ready to move where the market takes you. The majority of our production is indeed domestic now, and if tariffs drive us to expand that we will. If the tariff outlook changes, then we won’t rule out expanding our source strategy.

Surfaces is right around the corner. What message will you convey to retailers?
Bell: We couldn’t be happier about our new owners. We think being part of the AIP family is the best possible outcome for our business. They’ve already proven to be tremendous partners; they’ve really engaged in how they’ve sought to learn the business. They bring tremendous ideas and the strength to what we’re already doing. So it’s already proven to be a tremendous partnership. We believe we’re going to be in a better position than anybody to establish ourselves as the leader and expand that lead.