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Commercial: Corporate, healthcare sectors lead the charge

June 24/July 1, 2019: Volume 35, Issue 1

By K.J. Quinn


An uptick in activity in key end-use sectors—namely corporate, hospitality, healthcare and education—drove the bulk of commercial flooring specifications in 2018. FCNews research shows total specified commercial flooring sales grew to $7.012 billion in 2018, a 5.9% increase over 2017.

“History will view 2018 as a solid year for nonresidential construction spending in America,” said Anirban Basu, chief economist with Associated Builders and Contractors. “Both private and public segments experienced growth in construction spending last year.”

The growth of the commercial market is heavily attributed to stronger demand for hard surfaces—specifically LVT—which have entered practically every commercial sector. “Resilient flooring, particularly LVT, is growing across virtually all commercial channels, as hard surfaces are seen more and more often in spaces that used to feature carpet,” observed Deb Lechner, vice president, marketing, Armstrong Flooring. “This is true from offices to hotel rooms.”

Hard surfaces’ versatility is a major factor in the commercial segment’s performance last year. FCNews statistics showed hard goods generated just over $3.2 billion in sales for 2018, a 15% increase over 2017. No surprise that resilient accounted for the bulk of that growth, representing about 52% of commercial hard surface consumption.

“We’re continuing to see an influx of competition within LVT, especially given the rapid growth of the rigid core category,” said Katherine Caringola, communications manager, Karndean Designflooring. “As a result, there appears to be higher market investment in floating floor options, especially rigid core/WPC.”

LVT is the headliner of resilient, posting double-digit sales growth and expanding its usage across all segments, the majority in specified contract. “Technological developments may also allow the floor to go into new spaces and take on other flooring categories inside the hard surface market,” said John Szilagyi, manager-market intelligence, Tarkett North America. “With the modularity of design that has accompanied LVT and new core technologies, there should be no end to the combinations that end users and A&D firms can leverage into new spaces.”

Not all hard surface categories fared as well as LVT. FCNews research found several major products such as VCT, sheet goods, hardwood and laminates experienced low- to mid-single digit declines in volume and sales last year. Rubber and linoleum sales and volume held steady, as they are positioned as healthy flooring choices, especially in healthcare and education.

One hard surface that sustained growth despite competition from LVT is ceramic tile. While statistics are hard to pin down due to fragmented distribution channels, tile sales experienced a low single-digit increase to $1.086 billion according to FCNews research. “We have seen the growth of LVT due to lower installation costs and faster installation costs,” observed Raj Shah, president, MSI. “We believe that finding ways of keeping ceramic tile’s value [proposition] is important in its long-term growth.”

Despite its high price tag, tile is positioned as the most formidable hard surface alternative to LVT. An estimated two-thirds to 70% of ceramic’s commercial sales come from specified contract and half the volume.

“The greatest impact on the ceramic commercial market is the continued development of segments that use a lot of tile in their structures, such as healthcare, hospitality and education,” said Gianni Mattioli, executive vice president, Dal-Tile.

Meanwhile, soft surfaces showed a slight decrease of 0.8% from $3.805 billion in 2017 to $3.774 billion in 2018. Approximately 75% to 80% of carpet sales and 65% to 70% of volume were generated from specified contract while the remainder came from the Main Street commercial sector, research shows.

Within the segment, carpet tile boosted its position as the top soft surface, representing about half of sales and more than 60% of volume, according to FCNews research. The subcategory maintained nearly double-digit increases in both areas, while broadloom’s presence in commercial spaces continued to dwindle—even in the bedrock hospitality sector. “The main reason why people buy tile is it works in any segment,” Mike Gallman, president, Mohawk Group, explained. “People know how to use it from a design standpoint.”

The largest sector remains corporate/offices, representing roughly 40% of commercial flooring sales. Although key economic indicators such as new construction, asking rents per square foot and leasing activity point in the right direction, major design trends taking hold are reportedly influencing flooring choices.

“As more employees put in more hours at work, many offices are beginning to offer unique amenities to make employees feel relaxed, comfortable and happy,” said Kerri Convery, a spokesperson for Parterre Flooring Systems. “Current trends in office design focus on improving both the functionality and aesthetics of a space, and we expect that pattern will continue.”

The workplace is among the most diverse segments in terms of flooring selections. Among the key factors impacting specs are functional and design needs of the space. Carpet tile is the most popular choice, representing close to 60% share.

“The ‘resimercial’ trend of creating offices that feel more like home lends itself to innovative uses of carpet tile, both in terms of design and texture,” said Matt Miller, president, Interface Americas. “Designers are often looking for more of a homey feel than before.”

Armstrong’s Lechner agreed, noting, “LVT and rigid core illustrate a blurring of lines between products that are considered strictly residential or commercial. These products are increasingly gaining traction in commercial environments, bringing authentic wood looks to spaces, along with the durability to maintain their beauty even under high traffic, high moisture and high impact.”

Hard surfaces such as resilient, hardwood, porcelain tile and polished concrete are preferred for areas where fashion and functionality are required. LVT is gaining ground in reception areas, workrooms, kitchens, dining areas. “We are seeing a trend toward more hospitality-like finishes, including LVT or laminate flooring, polished concrete, specialty decorative tile—all items to bring personality and warmth to the previously sterile workplace,” stated Alana Lopez, RA, NCIDQ, LEED AP, director, hospitality and workplace studio at Stantec.

Still, broadloom remains a favorite in speculative workspaces or “market-ready” offices looking for cost-effective upfront investments. “You see broadloom in high-end areas such as conference rooms,” said Jeanette Himes, Mohawk’s creative design director for workplace. “Sometimes it’s in offices adjacent to open areas where you might use tile and, of course, on stairs.”

The hotel/lodging sector is one of the fastest growing markets, due to economic growth that’s driving more business and leisure travel, experts say. Designers and hotel proprietors are seeking to create a higher-end environment than their guests live in at home. “Hotel design seeks to help guests feel at home,” said Kim Drautz, director of segment strategy, hospitality and senior living, Tarkett North America. “As we’ve been shifting our residential interiors to have more hard- surface flooring than carpet, the hospitality industry is following suit.”

An increasing number of major hotel chains are specifying LVT for its good looks, durability, acoustic and hygienic qualities. “LVT feels cleaner to the everyday traveler because it gives them peace of mind knowing they can clean it themselves,” said Doug Detiveaux, interior designer, associate, at Gensler’s Houston office. However, not all hotel owners are onboard with using LVT, due to its higher initial cost and potential for longer cleaning times, he added.

Carpet is not expected to be phased out completely, as there will always be people who prefer the plush feel underfoot after waking up in their guest room. “A trend in the healthcare market is to use carpet tile to create an accent rug inset into a hard surface product,” noted Brenda Knowles, vice president of commercial marketing and product development, Shaw Industries.

Performance, style and sustainability needs are impacting flooring selections and driving demand for new hard surface options. For instance, large-format porcelain tile is reportedly viewed by hospitality designers as a cost-effective alternative to ceramic or marble floors and coveted for aesthetic qualities and resistance to staining and chipping. Polished concrete is gaining popularity in commercial spaces, offering a different twist to products specified in contemporary design.

“Hotel lobbies, guest rooms, schools, grocery stores, etc., have all used concrete,” explained Curt Thompson, president and CEO, Aggretex Systems. “The trend now is to start to blend seamlessly the exterior concrete, which is becoming more and more decorative, with the interior concrete.”

Similar to hospitality, the retail business is undergoing a makeover to attract more foot traffic and distinguish locations from competitors. Online shopping continues to reduce the number of brick-and-mortar stores. What’s more, it contributed to the decline in retail store sales last year, according to recent studies. “While the retail segment has been a little softer than expected, we are seeing positive signs in key areas,” Dal-Tile’s Mattioli said. “Car dealerships and fitness centers, as well as quick-service restaurants, are areas of growth that are positively impacting the tile market.”

Retailers are redesigning their stores to create inviting and comfortable shopping environments that appeal to all customers. Flooring selections run the gamut, often depending on the end use. Ceramic, wood and carpet tile are often specified in high-end retail spaces while resilient, VCT and rubber flooring are found in other public areas.

“We have an opportunity to continue to take share from broadloom in retail and hospitality as designers recognize the performance, maintenance and flexibility benefits of carpet tile in other segments—coupled with technology advancements in carpet tile design,” Interface’s Miller said.

No surprise that LVT is a popular choice among commercial specifiers in a segment renown for staying on top of interior design trends. “Retail has dramatically shifted to hard surfaces, with the advent of LVT and more younger shoppers,” Mohawk’s Gallman observed. Hard surfaces accounts for nearly 25% of commercial flooring sold to the sector, FCNews research shows.

Renovation and new construction are reshaping healthcare to accommodate the needs of an aging U.S. population. Designers are paying close attention to specific criteria for meeting safety and sanitary requirements. According to FCNews research, the segment saw a slight uptick in flooring sales in 2018 with much of the growth coming from hard surfaces.

“In 2018 we saw growth in the healthcare segment, specifically clinics, assisted-living communities and urgent care centers,” Dal-Tile’s Mattioli said. “This segment is anticipated to continue to soar, particularly due to the shortage of spaces available to care for the currently aging population and the high usage of tile in healthcare buildings.” The channel accounts for roughly 12% of the commercial hard surface market.

Natural materials such as ceramic tile, hardwood, rubber and linoleum are considered sustainable options. Rubber sheet, vinyl and linoleum are the mainstay in areas that require high sanitary levels. Carpet, rubber, luxury vinyl and vinyl composition tiles have found their way into non-critical areas such as corridors, medical, patient and waiting rooms.

Infection control is a major area of emphasis and concern as hospital-acquired infections can be both deadly and costly. Homogenous resilient floors are preferred in surgical suites, where infection control and quick turnaround of the room is paramount while other spaces. “[Healthcare] continues to be a strong market for vinyl sheet due to the ability to heat weld and flash cove the flooring for a seam-free surface that is easier to keep clean and hygienic,” Armstrong’s Lechner said.

Similar to healthcare, there is a good amount of remodeling taking place in education, according to published reports. The amount of flooring sold is aided, in part, by increases in state and local government tax revenues and private schools investing in remodeling to attract high school and graduate students. “College and university endowment investment returns grew in 2018, which also helps to support construction spending,” Lechner observed.

K-12 represents the lion’s share of the education sector, accounting for approximately 75% of flooring sales, with the remainder generated from colleges/universities, according to FCNews research. The driving force impacting interior design within K-12 schools is the notion of the active learning classroom, experts say.

Performance, health and safety requirements are also important selection criteria, as flooring needs are changing to support new learning environments. For example, schools are looking for ways to optimize their learning environments to have the right sounds and acoustics, avoiding vibration issues. Materials such as flooring must meet stringent criteria for issues such as indoor air quality, sustainability and maintenance.

“University systems as well as high schools are looking at having a better teaching and educational space,” said Rives Taylor, director of design resilience, Gensler.

An estimated 50% to 60% of the business is hard surfaces, as its versatility enables it to be found in virtually all learning environments. LVT is the leading resilient product utilized across the board, FCNews research found. The latest WPC products offer color and design flexibility which enable designers to apply numerous looks into learning environments.

As awareness around the maintenance and lifetime cost of owning floors grows, school officials are seeing the budget-friendly benefits of investing in quality products, according to industry executives. Premium materials such as ceramic and porcelain tile, terrazzo, rubber and linoleum are often utilized in high-traffic areas on campus such as corridors, lobbies, retail stores and restaurants.

Education is the second-largest commercial segment for carpet, representing approximately 30% of sales. However, broadloom is limited to small areas, such as stairs. “Education has the second highest penetration rate of carpet tile,” Interface’s Miller explained.

Leading indicators such as ABC’s Construction Backlog Indicator and Construction Confidence Index strongly suggest that 2019 will be another year of nonresidential construction spending growth in the United States. “There are many variables to watch, including interest rates, worsening skilled worker shortages, rapidly rising construction compensation costs and the U.S. economy’s broader trajectory in the context of a slowing global economy,” Basu stated. “Rapid job growth should boost demand for office and commercial space. Healthier state and local government finances should help fuel additional spending across multiple categories.”

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Resilient: LVT, WPC battle for commercial market share

May 27/June 3, 2019: Volume 34, Issue 25

By Lindsay Baillie


It’s well documented that WPC continues to take market share from other resilient flooring options—as well as competing hard surfaces—specifically in the residential market. Now we are witnessing a battle for share in commercial applications.

This trend shows no signs of slowing down as flooring executives, such as Thomas Baert, president, CFL Flooring, predict WPC and other rigid products will continue to expand their reach. “Many companies have been focusing on WPC versions of multi-layer flooring,” he stated. “For us, SPC is the next logical step in the evolution of multilayer flooring in both residential and commercial applications”.

Despite WPC’s aggressive growth in the residential arena, flooring manufacturers say the red-hot product is not likely to cannibalize traditional LVT in the commercial realm. This is partly because certain issues found in commercial projects are better solved with glue-down applications than WPC.

“One of the biggest challenges with WPC—or any rigid core—is the installation in commercial settings,” said Adrienne Roseman, director, LVT marketing, Tarkett North America. “Traditional locking mechanisms present installation challenges when it comes to heavy rolling loads or rolling loads with pivot points.”

What’s more, according to observers like Amy Tucker, senior marketing manager, Philadelphia Commercial, WPC is more susceptible to dents from chair legs or divots from high-heel shoes, unlike traditional glue-down LVT or glue-down SPC.

However, that is not to say WPC doesn’t have a home in commercial. “From a durability and performance standpoint, rigid core products are suitable for hospitality, retail, corporate and some education uses,” Roseman noted. “They are easy to install and have the durability to stand up to heavy foot traffic.”

Rick Morris, vice president of commercial, USFloors, sees WPC thriving in living environments such as multi-family, student housing, senior living as well as hospitality. “The key reason for this growth is speed of installation compared to traditional LVT, thereby allowing clients to return to revenue generation faster. WPC [also] offers superior IIC qualities than traditional LVT using separate underlayment. Because WPC floats, it does not destroy subfloors when removed—something that is valued during the replacement cycle. It also feels better under-foot than traditional LVT and is often mistaken for real wood.”

Karndean Designflooring is also seeing WPC creep into the multi-family sector. “While the total square footage of these jobs is on par with other commercial projects, the floors themselves are being laid in smaller spaces, thereby eliminating the need for transitions,” Milton Goodwin, vice president of commercial sales, explained.

Others point to WPC’s appeal in commercial applications from a suitability perspective, especially hospitality. “It’s a lighter-traffic application,” said David Thoresen, senior vice president of commercial hard surface, Mohawk Group. “If you look at a hotel room, you basically have an advanced heavy residential application. It really doesn’t come as a surprise that it would work adequately in there.”

While WPC has made its way into certain commercial sectors, manufacturers say it represents only a small share of the commercial resilient market. “When you move from LVT to WPC, you would do so to solve a specific challenge,” said Kurt Denman, chief marketing officer and executive vice president of sales, Congoleum. “Otherwise, you would be adding features—and cost—that are not necessarily needed for that project.”

According to Denman, a WPC product may be specified over an LVT floor if there are subfloor imperfections (which a rigid base could help mask). Or, for example, if there is a need to mitigate sound transfer between floors, WPC’s integrated backing may make it a better choice. “At the same time, the click profile may allow the product to float, but that type of installation is not well suited to commercial environments,” he added. “And gluing a click profile adds a layer of complexity to the installation.”

Traditional glue-down LVT is expected to remain king in several commercial sectors such as healthcare, education and budget-conscious multi-family projects. “Standard glue-down LVT offers the ability to meet lower product budget thresholds and some of the above-mentioned sectors still lend themselves to preferring a glue-down floor,” said Jeremy Whipple, vice president of commercial business development, Novalis. Reesie Duncan, vice president, global design, Shaw Contract, agrees. “There are definitely some segments that are embracing the performance attributes of WPC, but we predict the higher performance environments will still have a place for traditional glue-down LVT. Healthcare and education are holding strong with traditional glue-down LVT due to important performance attributes, for example rolling and static loads.”

Karndean’s Goodwin sees flexible LVT also holding ground in commercial settings such as restaurants and areas with high potential for slipping. “Specifiers want to ensure that the planks or tiles stay in place by fully adhering them to the subfloor,” he explained.

LVT’s glue-down capabilities make it ideal for many commercial applications. “In situations with heavy rolling loads, a glue-down LVT will be necessary to endure the weight of a load,” Tarkett’s Roseman noted. “Because a traditional LVT would be glued down in those situations, the risk of significant weight damaging a click system or causing indentation on WPC is mitigated.”

The wild card
While WPC is known for stealing market share from other resilient products in the residential sector, manufacturers say the sub-category may get a dose of its own medicine in commercial. The main culprit? SPC, which boasts a denser core and greater dimensional stability.

Yon Hinkle, director, product design and innovation, Armstrong Flooring, sees rigid core flooring like SPC being used in a wide range of light commercial applications, including flooring for medical and dental practices, accounting or law firms, restaurants, local retailers, daycare centers as well as public places like libraries and museums. “Rigid core is an innovative hybrid product that combines some of the best features from multiple flooring categories, and so we’re likely to see it being used more often in commercial spaces for a variety of reasons,” he explained.

Mohawk Group also sees the value of SPC over WPC in commercial settings. “WPC has really maxed itself out in the commercial arena,” Thoresen said. “We have found rigid vinyl products have a better story, and we’ve launched a couple of those. But we actually took a pass on WPC for commercial. While we know people are using it, we just don’t feel the attributes really warranted going into all commercial environments.”

Despite SPC’s threat to WPC, manufacturers agree there will always be a market for LVT and WPC products. “Designers and building owners will choose the product that best suits their needs based on multiple factors including design, performance attributes, schedule and budget,” Armstrong Flooring’s Hinkle explained.

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Suppliers look to fill voids on Main Street

May 27/June 3, 2019: Volume 34, Issue 25

By Ken Ryan


Small businesses, which includes Main Street, are the lifeblood of the U.S. economy. According to the U.S. Small Business Administration, businesses with fewer than 20 employees make up 89.6% of all U.S. enterprises and create two-thirds of new jobs.

By some estimates, nearly one-third of commercial hard surface flooring volume is tied to the Main Street segment, positioning it as a significant area of opportunity for flooring suppliers and their dealer partners. These Main Street projects can include flooring for medical and dental practices, accounting or law firms, restaurants and local retailers, day care centers and public places such as libraries and museums.

Various key factors are driving this trend, executives say. Jonathan Cohen, CEO of Stanton Carpet, which has made a major push into Main Street, said the new tax laws reduced corporate taxes by 14%, and with this new windfall, existing businesses are more willing to reinvest while encouraging new businesses to enter the market. Stanton launched Stanton Street Decorative Commercial in the fourth quarter of 2018 to offer its current account base fresh, better-looking aesthetics across select carpet tile and broadloom offerings.

“Carpet tile is an excellent solution for multiple project types with decorative broadloom for the higher-end spaces,” Cohen explained. “Main Street commercial continues to grow into a meaningful percentage of the overall commercial flooring market.”

Design trends for commercial spaces that adopt a more residential look is also trending on Main Street. “This has led to a blurring of lines between products that are considered strictly residential or commercial,” said Deb Lechner, vice president, marketing, Armstrong Flooring. “One case in point is LVT and rigid core flooring, which are increasingly gaining traction in light commercial environments on Main Street. These products bring authentic wood looks to spaces and are designed to maintain their beauty, even under high traffic, high moisture and high impact.”

Modular floor covering, hard and soft, has proven to be ideal for most Main Street applications. Observers say modular is design dynamic, cost effective, easy to install and easy to maintain. “Innovation in these categories continues to provide aesthetic and technical solutions, from performance to installation,” said Amy Tucker, senior marketing manager, Shaw Industries. “LVT, specifically, has evolved drastically over the last several years. What used to be limited to residential-centric wood visuals has now become a plethora of products engineered to address issues customers continue to face. For example, traditional glue-down LVT is great for commercial spaces. However, if a subfloor isn’t perfect, the end result/visual isn’t going to be what the customer expects. We’ve all seen those floors where trowel marks are visible, or the floor looks wavy because of subfloor unevenness. We recognized this issue and addressed it.”

Because Main Street is commercial without being specified, observers say there are nuances within the segment that take time to learn if you are a dealer. “The biggest challenges we see among retailers who serve commercial businesses are the limited amount of style options for both soft and hard surfaces,” said Jason Hair, vice president of hard surfaces, Phenix Flooring. “This ultimately limits their ability to sell products to their buyers that fit every need.”

To help flooring dealers work through these issues, companies like Phenix are creating programs specifically for Main Street. For example, Phenix on Main includes broadloom, carpet tile and vinyl plank. “Phenix on Main allows a dealer to have many choices when they present product to customers,” Hair noted. “Our Main Street collection includes a variety of carpet tile, broadloom and luxury vinyl plank and tile options from which to choose, giving retailers more opportunity to sell the most fitting product.”

Rigid core emerges
Within hard surfaces, LVT and VCT are among the go-to products for Main Street installations, each accounting for about 20% of square footage last year, research shows. Within the greater LVT segment, rigid core is poised to break away from the pack due to several key advantages. “First, these products align nicely with the ‘resi-mercial’ design trend,

with authentic elements like embossed-in-register texture,” Lechner said, citing Armstrong Flooring’s Rigid Core Vantage. “Second, the construction of rigid core includes a dense, solid core that provides superior resistance to indentation, an important consideration in many commercial settings such as a retail location that must hold up to foot traffic and falling objects. Third, small businesses need to return spaces to full operations as quickly as possible after renovations. Thanks to its dimensional stability, installers do not have to acclimate [rigid core] products in most installations. Rather, installers can get to work sooner and install faster.”

In 2019 Armstrong Flooring introduced refreshed collections of its PVC-free Migrations and Striations BBT, with Diamond 10 Technology coating. Lechner said these complementary collections offer a sophisticated palette of organic tones coupled with modular installation options to provide optimum design flexibility for many Main Street options.

As the Main Street segment grows, it is also evolving, especially with regard to LVT-type products. Whereas soft surfaces have unique characteristics that are tailored to a Main Street application vs. residential, within resilient, a 2.5mm vinyl product with a 12- or 20-mil wear layer can be put in a residential home just as easily as a non-specified doctor’s office. “As resilient matures we will see more defined programs for Main Street,” said Herb Upton, vice president of hard surfaces for Shaw Industries/USFloors. “We define Main Street in three categories; first as a glue-down straight-edge, 2.5mm and 12- and 20-mil wear layers; the second category is loose lay 5mm, true loose lay or perimeter glue; and the third category is SPC click.”

Philadelphia Commercial, a Shaw commercial brand, continues to design and develop products with an eye toward its customers’ wants and needs. Case in point is its newest Advantium Core SPC products—Revival and Line of Sight. According to the company, these offerings showcase the ideal blend of beauty and brawn. “They’re tough enough for the most demanding commercial spaces with best-in-class performance plus the luxurious, on-trend visuals are ideal for customers looking to take their style to the next level,” Tucker stated.

Advantium Core SPC is a direct-glue, non-pad SPC offering impact and dent resistance up to 2,000 psi. The SPC core requires no acclimation time, reduces subfloor prep, eliminates telegraphing and is 100% waterproof. Products utilizing this core are engineered for the most demanding commercial spaces. On the soft surface side, the brand has made major strides in carpet tile. Areas that have, in the past, been cost-prohibitive for carpet tile are now able to enjoy the benefits of tile without the price tag. Philadelphia Commercial’s Strataworx backing and Pivotal fiber are the latest examples of high-end style and design at half the cost of traditional carpet tile.

No matter the Main Street application—be it office spaces or grocery stores that were historically dominated by VCT—resilient hard surface has a piece of it. So said Kurt Denman, executive vice president of sales, Congoleum. In anticipation of broader demand for resilient across Main Street, Congoleum has expanded its portfolio to include a commercially rated construction in ArmorCore, a resilient sheet product; Structure, a traditional glue-down LVT; Triversa, a floating WPC with natural cork backing, and Cleo Home, its latest PVC-free product—all of which are entering the segment.

Stanton Street Decorative Commercial, meanwhile, came to market with 16 offerings in a concise sophisticated display that is offered throughout its existing account base. Cohen said the new Stanton Street program is progressing nicely with several new styles scheduled to be introduced in the second half of 2019.

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HD Expo: Products adapt to fit hospitality, restaurant trends

May 27/June 3, 2019: Volume 34, Issue 25

By Megan Salzano


Las Vegas—The evolution of the hospitality industry remains apparent through dramatic changes in product, design and specification, but flooring’s role as a foundational element to every built environment remains constant.

In fact, designers who spoke with FCNews overwhelmingly agreed that one of their pivotal goals at the show was to see what’s new underfoot. “We definitely look at flooring,” said Nicole Schneck, an interior designer with Gensler’s Houston office. “A lot of the time we try to go to the booths that we don’t know and learn about their products. We found a few new products that are pretty good on the flooring side.”

It’s no secret that LVT is growing in demand within the hospitality market as new technologies deliver more realistic design options, thereby easing the specification process. “It’s because of durability and cleanability, and brands are willing to not put carpet in hotel rooms anymore because they realize the customer wants something clean and easy for house-keeping to maintain,” said Tina Wichmann, principal and owner of Bunnyfish Studio, a design and architecture studio based in Las Vegas. “It doesn’t sound like it used to sound or look cheap, either. It’s looking a lot more realistic.”

Not surprisingly, the most desired look in LVT today is natural wood. These visuals allow designers to express a biophilic-inspired aesthetic that has come to reign in the hospitality market. Some manufacturers unveiled innovative wood looks that help keep the category’s standards high and meet the needs of the market. Karndean Designflooring, for example, showcased Art Select, which is crafted to enhance the unique grains, knots and textures of the wood that inspires it. The collection’s latest visuals were developed from reclaimed hickory, American chestnut and European oak.

Carpet tile has also edged its way deeper into the design plans of specifiers and building owners, and some carpet manufacturers at the show turned to new technologies to help unleash the next wave of design evolution. Shaw Hospitality, for instance, unveiled its Tailor Tuft technology. “This is a brand-new, four-color technology,” said Robert Stuckey, director of hospitality and retail. “The differential precision we can create really cannot be replicated at this point. Everything here is a custom collection as of right now, which, is to say, it’s an idea starter.”

Milliken also unveiled new technologies meant to inspire designers: woven axminster and Color Point. The company unveiled its Force of Nature collection, which the company said is the real story behind the tech. “The technologies for this collection were the secondary story,” said Roy Acosta, hospitality marketing manager. “We wanted to lead with the design and patterns and also show how they can be produced in each of these technologies. Now Milliken can play in any space.”

One product trend developing from the growth of LVT and carpet tile is the merging of the two categories within single collections. Some took the literal route, showing collections that include coordinated hard and soft surface lines; others revealed hard surface collections with innovative soft surface looks.

Tarkett, for example, unveiled its first collection as one Tarkett brand: MergEmerge. The collection is an experiment in the blending of soft and hard surfaces—incorporating hard surface LVT with woven axminster, tufted and broadloom carpet.

Durkan, on the other hand, launched Sakiori, which combines visual texture and physical attributes to create hard surface flooring with a soft textile aesthetic.

The tile category surprised some designers at this year’s show. Several said new colors and sizes turned heads and brought a breath of fresh air to the category. When it comes to tile trends, size has been a major headline grabber. Designers at the show noted larger sizes are growing in demand and will continue to do so. “Porcelain has been at the forefront for a really long time,” Gensler’s Schneck said. “I don’t think that’s going to go anywhere. I think it’s just sizes that are really driving porcelain now.”

Emser Tile showcased its Yakedo porcelain plank line, designed in collaboration with Gensler. It’s a nod to the growing focus from manufacturers toward the needs of their design partners and the segment overall. The collection taps the large-format trend with elongated 8 x 47 plank tiles. The offering also features a unique aesthetic of burnt wood, which reflects light from its crackled texture. In addition to a variety of new colors and designs, Daltile also tapped the size trend with its Panoramic Porcelain Surfaces, including the new Metallic Selection. The porcelain slab collection features a reflective, iridescent metallic sheen. An unrefined essence of concrete enhanced with mixed metals is provided on large format scale.

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Contract: State of the industry—LVT, ceramic, carpet tile dominate field

May 27/June 3, 2019: Volume 34, Issue 25

By K.J. Quinn


It’s “Groundhog Day” for the commercial flooring business. Similar to the Hollywood comedy in which a cynical TV weatherman finds himself reliving the same day over and over again, industry members expect many of the trends and economic indicators that impacted the business the past two years to continue into 2019. Which means hard surfaces—led by LVT and WPC products—will sustain double-digit growth rates and further penetrate every major segment.

Preliminary research shows commercial flooring is on track to post similar numbers as last year. Specified contract is projected to retain the lion’s share of both dollars and square footage (approximately 70%) vs. 30% for Main Street, according to industry estimates. Soft surface sales rose 1.5% to 2% in 2018 to roughly $3.3 to $3.6 billion and volume leveled off between 220 to 280 million square yards. Specified contract remains the dominant end-use market for carpet, representing approximately 75% to 80% of sales and 65% to 70% of volume.

Modular tile is supplanting broadloom as the leading soft surface, accounting for more than half of soft-surface sales and boosting its share of value to more than 60%, estimates show. Experts cited ease and speed of installation as key advantages for carpet tile. What’s more, recurring issues—i.e., proper seam matching, row cutting, roll sequencing and seam diagrams—related to broadloom can be difficult to address and reduce profits if not properly executed.

“Carpet tile is also more cost effective to store replacement tiles due to its modular size vs. broadloom,” noted Brenda Knowles, vice president of commercial marketing and product development, Shaw Industries. “Additionally, carpet tile offers sophisticated design options that broadloom can’t cost effectively replicate.”

While carpet sales moved at a snail-like pace, hard surfaces’ momentum can best be described as a runaway train. Category sales rose an estimated 11% to 13% last year to between $3 and $3.5 billion, with volume estimated at 2.5 billion to 3 billion square feet. Specified contract represents about two-thirds of commercial sales while Main Street accounts for the balance.

“The overall commercial market is in the middle of a very big transition,” said Mike Gallman, president of Mohawk Group, the commercial division of Mohawk Flooring. N.A. “There’s a mixing in terms of what’s going on the floor and a lot of growth in hard surfaces. LVT and other hard surfaces have put some head winds in front of carpet’s growth.”

Among hard surface categories, LVT continues to lead the pack. Research indicates the sub-category saw both sales and volume rise 10% to 20% last year, expanding across virtually all segments but particularly in healthcare and hospitality settings. Some believe it represents approximately 60% of commercial LVT sales.

“We are seeing increasing interest and installations of LVT in the commercial market,” said Deb Lechner, vice president, marketing, Armstrong Flooring. “This is consistent with the trend of commercial spaces being designed to appear more residential in nature.”

Resilient is not the only segment on fire in commercial at present. Right behind it is ceramic, which accounts for roughly 40% of total sales and 25% to 30% of volume, according to industry estimates. Approximately two-thirds to 70% of the business is from specified contract. Ceramic is also emerging as a major factor on Main Street, as roughly half of commercial volume is generated from this segment.

“There still remains tremendous growth opportunity for the tile category,” said Gianni Mattioli, executive vice president, Dal-Tile. “Our company is diligently working to take advantage of this opportunity and the tile industry as a whole also appears to understand this reality.”

While tile is among the most well-rounded floor coverings, it’s also the priciest (on a per square foot basis) and challenging to install. Nonetheless, suppliers say they are committed to boosting tile’s value proposition in the wake of designer preferences towards VCT as a low-priced alternative. “It’s important, as an industry, to continue to work to make ceramic tile the best overall value possible,” said Raj Shah, president, MSI.

With the trade wars and the recently announced anti- dumping petition by U.S. manufacturers of ceramic tile, however, the industry is seeing some instability in pricing. “Adding tariffs/duties to the ceramic tile category reduces the overall value of the tile vis-à-vis other flooring options,” Shah said. “This will affect overall demand and, most likely, tile installers and retailing jobs.”

End-use trends
Further analysis of the commercial sector reveals unique issues affecting product specs in the five major segments: corporate/offices, healthcare, education, hospitality and retail. As such, flooring choices and volume are expected to vary this year in some segments while remaining constant in others, industry watchers say. “Resilient flooring, particularly LVT, is growing across virtually all of these commercial channels, as hard surface is seen more and more often in spaces that used to feature carpet,” Armstrong’s Lechner said. “This is true from offices to hotel rooms.”

The largest sector remains corporate/offices, representing roughly 40% of commercial flooring sales. While the segment grew modestly in 2018, the ongoing growth in employment coupled with trends in workplace design for aligning people, culture, processes and technology with organizational goals are expected to positively impact flooring sales. Carpet tile emerged as the top flooring choice, representing an estimated 55% to 60% market share, thanks in part to evolving aesthetics and formats.

Broadloom is expected to remain a favorite in speculative workspaces or “market-ready” offices looking for cost effective upfront investments. “Broadloom, particularly hospitality-inspired, large-scale or plush patterns, can also be fashioned into area rugs for cost-effective rug solutions for those looking to create visual appeal or to use a mixture of flooring types in corporate settings,” Shaw’s Knowles explained.

Construction and renovation are rampant in healthcare, which remains among the most challenging environments for the A&D community to service. For one, it requires an understanding of the impacts building materials have on the health of those who work, visit and are cared for, experts say.

“We consider the floor to be critical in addressing infection control,” said Jocelyn Stroupe, director of healthcare interiors, CannonDesign, New York. “For that reason, resilient flooring is primarily the choice.”

Natural materials such as ceramic tile, hardwood, rubber and linoleum are considered healthy choices. “Rubber sheet, vinyl and linoleum are the mainstay in areas that require high sanitary levels, such as an emergency rooms, triage, operating rooms, treatment rooms, etc.,” said Mark Tickle, director of marketing, American Biltrite. “Rubber tiles, LVT tiles and planks have found their way into non-critical areas such as corridors, waiting rooms and patient rooms.”

VCT is among the least expensive resilient floors, but its high life-cycle costs limit its usage in healthcare, observers note. Carpet tile is specified primarily in non-patient areas such as waiting rooms and medical offices, although some experts are bullish about growth prospects for senior living spaces. “The availability of large- scale patterning and more hospitality driven, and high-end luxurious aesthetics in carpet tile are driving its increase in popularity, along with the inherent moisture barrier,” Shaw’s Knowles explained.

Similar to healthcare, the hospitality business is seeing major investments being made in remodeling. Hospitality is one of the fastest growing sectors, as a bullish economy is helping drive business and leisure travel back to pre-recession levels. “All major hotel chains are continuing to grow, with new builds steadily occurring,” Dal-Tile’s Mattioli said. “Additionally, we have seen incremental new business from boutique hotels.”

Floor design varies widely, often depending on location and brand. For example, hotel chains are reportedly turning to materials that bring value to their brand while giving guests a feeling of warmth and cleanliness. “Hotel guests often prefer carpet in their guest rooms due to its feeling of warmth,” noted Cindy Kaufman, director of marketing, Interface Hospitality. (An estimated 25% of commercial carpet is sold in these spaces, the majority of which is broadloom.) “However, there is less of a perception of cleanliness when dealing with carpet. LVT is another solution because it’s easy to clean and maintain.”

Indeed, the hottest flooring in hospitality spaces is LVT. “Many LVT products offer an acoustic backing option to help with sound performance,” said Whitney LeGate, director, commercial LVT, Mannington Commercial, citing the company’s Quantum Guard Elite line. “LVT is a long-term flooring option that doesn’t wear out quickly.”

LVT is a popular option in retail spaces, a segment renown for staying on top of interior design trends. Flooring choices run the gamut, as end uses range from national and regional retail chains to local grocery stores, restaurants and other establishments. Sales to the sector declined in 2018, observers say, as online shopping continued to stifle retail construction and reduced the number of brick and mortar stores.

“While the retail segment has been a little softer than expected, we are seeing positive signs in key areas,” Dal-Tile’s Mattioli said. “Car dealerships, fitness centers and quick-service restaurants are areas of growth that are positively impacting the tile market.”

Then there’s the education sector, where interior design is fast becoming a major point of emphasis. Research shows K-12 represents the lion’s share of this market, which accounts for approximately 75% of flooring sales; the remainder is generated from higher education, according to industry estimates.

Most of this work involves hard surfaces, accounting for an estimated 50% to 60% of flooring sold to K-12 spaces. Product types vary as grade schools encompass a wide range of end uses ranging from classrooms and athletic facilities to offices.

LVT—the leading resilient product—checks a lot of boxes for K-12 and higher education building needs and almost every area of the school offers growth opportunities, observers say. Premium floors—such as ceramic and porcelain tile and terrazzo—are coveted for their durability and utilized for high-traffic areas such as corridors, lobbies and toilet rooms. Rubber and linoleum are positioned as green flooring choices while sealed or polished concrete allow schools to replicate industrial looks found in retail stores and restaurants.

And lest we forget carpet, as education surpassed hospitality as its second largest commercial segment, representing approximately 30% of sales. Modular tile makes up the overwhelming majority of installations while broadloom is limited to small areas. “Carpet tile offers sophisticated design options that broadloom can’t cost effectively replicate,” Shaw’s Knowles explained.

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A look back at 2018’s top introductions

April 29/May 6, 2019: Volume 34, Issue 24

By Lindsay Baillie and Ken Ryan


In a marketplace plagued by “me-too” products, it is up to manufacturers to develop standout flooring. Whether it’s carpet, hardwood, laminate, tile or resilient, suppliers have had to step up their game in style, design and performance to excite flooring dealers and customers alike.

In 2018, the industry saw a plethora of new products enter the scene. Following is an overview of those products that stood out to flooring retailers.

Terra Linda by Anderson Tuftex

About the product: Terra Linda is a 100% Stainmaster Luxerell BCF nylon carpet with textured styled. Available in 24 colors the signature product also features A/T’s Softbac Platinum Backing.

Sierra Nevada by Audacity from CFL
About the product:
Audacity’s water-resistant laminate floors are available in five collections—Classic Naturals, Hearthside, Lodge, Monticello and Vintage. In the U.S. and in Canada, Audacity Flooring is sold exclusively through select Armstrong Flooring distributors.

Adventure II by Engineered Floors
About the product:
EF’s Adventure II is a 5.5mm luxury vinyl plank with a 22-mil wear layer and a ceramic bead finish. Available in nine wood-look visuals, the 7 x 48-inch plank can be installed floating and comes with a 10-year commercial warranty and a lifetime residential warranty. What’s more, Adventure II is Floorscore certified for indoor air quality.

Sono by Inhaus
About the product: Sono is a 100% recyclable, PVC-free flooring that is made up of 60% mineral powder and 40% polypropylene. Sono is waterproof, easy to install and highly stable under both humidity and heat. The company continues to invest in its digital printing to ensure quality, on-trend visuals.

RevWood Plus by Mohawk
About the product: 
RevWood Plus is a revolutionary wood floor destined to make consumers rethink the wood category. RevWood Plus planks offer reliable durability that resist stains, scratches and dents. Thanks to its 100% waterproof flooring system, spills, accidents and tracked-in-stain-makers are kept on the surface for quick, easy cleanup.

Sweet Memories collection by Mirage
About the product: 
Mirage’s Sweet Memories collection features the manufacturer’s exclusive staining and brushing processes to create floors with the charm of yesteryear. Variations, knots, cracks and other natural characteristics help to create the collection’s authentic appearance.

Titanium by Karastan

About the product: Karastan’s Titanium rug collection is grounded by a careful combination of both traditional and transitional patterns. The collection is meant to satisfy a craving for contrast with a fashion-forward fusion of matte and sheen finishes.

Acrylx by Raskin

About the product: Acrylx is a solid surface waterproof floor available in three collections: Premier Home, Premier XL and Premier G-Core XL. Acrylx’s high-density core is made of pure materials and minerals that are tightly bonded with polymers to create a solid core that is more impact resistant and denser than other floors.

Great California Oak by Republic Floors

About the product: Great California Oak is an extra-wide, pure SPC floor with beveled edges and realistic grains. The 100% waterproof flooring carries a limited 25-year residential warranty and a limited 10-year commercial warranty. What’s more, it features the company’s new antibacterial EVA underlayment padding.

Bellera by Shaw Floors

About the product: Created with a holistic approach to meet the design and performance needs of consumers, Bellera is a top-to-bottom innovation known for style and durability. With Bellera, Shaw’s new Endurance high-performance fiber is combined with proven technologies such as R2X soil and stain resistance and LifeGuard backing to create a worry-free carpet.

Harbor Plank by Southwind
About the product: 
The Harbor Plank series features planks 6 x 48, with a high-density wood plastic composite core and a Uniclic locking system. Attached to each luxury vinyl plank is the Southwind IXPE underlayment pad, which is impervious to water, hides subfloor imperfections, provides added sound absorption and comfort underfoot.

COREtec Pro Plus by USFloors
About the product: 
The COREtec Pro Plus Series consists of two collections: COREtec Pro Plus (5mm total thickness) and COREtec Pro Plus Enhanced (7mm total thickness). COREtec Pro Plus Enhanced includes all the features of the Pro Plus collection coupled with a four-sided enhanced bevel for added realism.

Radius by Stanton Carpet

About the product: Stanton’s Radius broadloom carpet is available in Stanton Street, the company’s Decorative Commercial line. Radius is a cut-pile nylon and is crafted for residential to heavy commercial application.

TruTEX by Tarkett
About the product: With its unique textile backing, TruTEX luxury sheet flooring resists mold and mildew while adding superior strength against rips, tears and gouges. With 20 realistic, high-definition stone and wood designs, TruTEX is easy to install over existing floor coverings, greatly reducing the time spent preparing subfloors.



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Main Street lined with profit opportunities

March 18/25, 2019: Volume 34, Issue 21

By K.J. Quinn


It can be a lucrative business and provide a bit of a buffer against fluctuations in the bellwether residential replacement and new home construction arenas. But truth be told, the Main Street market—sort of a hybrid between specified commercial and small-scale remodel—is a different animal. It not only requires the right portfolio of products to meet the diverse needs of small local businesses such as shops, salons, doctors’ offices and the like, but it also requires a separate focus, a dedicated mindset and the requisite knowledge to be successful.

To that end, some of the industry’s major suppliers have put together a package of programs, products and tools to put independent specialty retailers in a better position to succeed in their Main Street marketing efforts. Case in point is Philadelphia Commercial, which earlier this year announced a number of new developments aimed at, among other things, helping dealers capitalize on opportunities within the Main Street sector. For example, Mainstreet by Philadelphia introduced Pivotal carpet fiber, offering technological advances and design at a desirable price point through two collections: In The Press, a modular carpet tile, and All Business, a commercial broadloom carpet. According to Amy Tucker, senior marketing manager, its UNLimited! Random-Mergeable products eliminate the worry about dye-lot issues, installation limitations due to color variation and remnant loss. Lastly, the StrataWorx carpet tile backing was designed following an intense study that revealed Main Street market’s demand for modular flooring to fit diverse, space-driven needs.

“Philadelphia Commercial's products enable retailers to meet the needs of small businesses within their communities, whether a dentist's office, church, school, bakery or boutique,” Tucker said. “When we design a product, we think through the customer's perspective, about where the product will be used, how the flooring relates to the purpose of the space, what the traffic in the space will be like, etc. We want to help our customers better serve small businesses without compromise.”

One challenge for independent specialty retailers and contractors when it comes to servicing the Main Street market is finding high-quality products that also deliver great value for money. After all, many bona fide commercial products are either too expensive or lack the quality and design appeal clients require. To that end, companies like Engineered Floors has developed programs aimed at helping dealers overcome these challenges.

“We provide a broad range of products and price points in both modular and broadloom that use our enhanced Nexus or PremierBac Plus backing systems,” said Adrian Massiah, regional commercial specialist with Engineered Floors. “We offer three different yarn systems to suit customer needs—olefin, Apex solution-dyed polyester and Encore solution-dyed nylon. We offer a very robust quick-ship program covering a large portion of our collection.”

Engineered Floors also helps dealers present the offering to potential Main Street clients via a user-friendly (and affordable) retail display platform along with architect folders of all its products, Massiah explained. In addition, the company offers a tool called the EF EYE Visualizer, which helps dealers promote Pentz Main Street carpet by allowing their customers to see what the product is going to look like in advance of a purchase.

Other major mills, including Mannington, are also working hard to make life easier for retailers looking to expand into the Main Street realm. For Brack Dukes, the company’s manager of Main Street and commercial sundries, it all begins with the right training. “Having well-developed relationships within the local community can be a challenge for some retailers,” he said. “We offer world-class customer support, sales teams and training programs to assist retailers with technical issues they may encounter.”

For starters, Mannington makes sure its retailer partners have access to a broad portfolio of hard surface aesthetics to meet the unique design needs of the Main Street customer base. “Additionally, we offer some of the most advanced performance technologies, a knowledgeable and dedicated sales team to support them, along with a comprehensive distributor network giving them quick access to inventory,” Dukes explained. “As an added benefit, if the dealer is part of our One Mannington program, their Main Street business has access to rebates, promotions and pricing advantages.”

And like Engineered Floors and Philadelphia, Mannington offers flexible merchandising programs. “With options to cover different market specific product needs, space constraints and extensive product lines, Mannington gives retailers the opportunity to service virtually any Main Street need,” Dukes said. “The Mannington program offers endless product choices that position them to be well ahead of their competitors far faster than attempting to build a program from scratch.”

Creativity is king
While some manufacturers offer defined, structured pro- grams to help retailers get into the Main Street game, other suppliers believe their retailer partners can succeed by developing a better grasp on the overarching factors that go into specifying flooring products for light-commercial applications.

Case in point is Armstrong Flooring, which transitioned to its distributor partners certain merchandising and marketing responsibilities—including those that were formerly part of the company’s popular Main Street “Elevate” program. Nonetheless, Armstrong Flooring continues to support retailers as they look to expand into Main Street.

“Servicing Main Street needs offers flooring retailers an opportunity to grow their business by expanding their expertise into new markets,” said Meredith Hafer, channel marketing manager at Armstrong Flooring. “While this can involve challenges, such as becoming familiar with commercial market specifications and requirements, there are also factors that play in retailers’ favor.”

Chief among those factors, according to Hafer, is the importance of spotting how flooring is being used in the grand scheme of a project. “There’s an ongoing design trend for commercial spaces to adopt a more residential look,” she explained. “This ranges from designing offices that are warm and welcoming to healthcare spaces that make patients feel more at home.”

Second, while commercial projects may have more stringent requirements, the basic attributes are similar to what residential consumers are looking for in flooring—great-looking designs, durability to stand up to high traffic and everyday wear-and-tear, and easy installation and maintenance.

Third, there’s a blurring of lines between products that are considered strictly residential or commercial. One case in point is LVT and rigid core flooring, which are increasingly gaining traction in light commercial environments on Main Street.

“These products bring authentic wood looks to spaces and are designed to maintain their beauty, even under high traffic, high moisture and high impact,” Hafer noted. “It’s important for retailers to consider how their Main Street customer’s space will be used. Although LVT and rigid core that’s primarily used in homes can be installed in some light commercial applications, projects with high traffic will require flooring that’s commercial grade. It’s also important to modify installation based on the type of environment and expected use.”

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Multi-family sector: Are dealers leaving opportunities on the table?

January 7/14, 2019: Volume 34, Issue 16

By K.J. Quinn


There is a silver lining for dealers and builders serving the multi-family housing market. Despite published reports that project a slowdown in 2019, numerous economic indicators provide cause for optimism that the market will drive most construction activity in the decade ahead.

Multi-family housing permits rose 4.6% to a seasonally adjusted rate of 480,000 in November compared to the same month in 2017, according to the U.S. Census Bureau and U.S. Department of Housing and Urban Development (HUD). While the modest increase was welcomed by industry members—following a year when the market slipped by 4% over 2016—the growth rate pales in comparison to 2009 to 2016. During this time, multi-family housing was a powerhouse in the overall construction recovery, as the number of starts rose 281%, Dodge Data & Analytics reported.

“We have heard from some larger builders that their sales have plateaued,” said Scott Baker, vice president of national accounts single-family at Shaw Industries. “They cited several reasons, such as rising costs and interest rates, as affecting their ability to sell homes.”

Lending rates indeed rose in 2018, which, when combined with years of home price appreciation, contributed to a 10-year low in housing affordability as measured by the National Association of Home Builders (NAHB)/Wells Fargo Housing Opportunity Index. “This means despite improving income growth and tax cuts, housing demand will be under pressure...going into 2019,” Robert Dietz, NAHB’s senior vice president and chief economist, predicted.

Housing starts are expected to edge downward in 2019 as inflation heats up, interest rates rise more quickly and substantially and the economy begins to slow, Dodge reported. It projected multi-family starts will drop 8% to 465,000 units and fall 6% to $87 billion this year.

“The biggest concern multi-family housing has entering 2019 is the amount of new construction and redevelopment business that has gone on the last six to eight years, and whether there is overbuilding,” said Layne Dugger, Shaw’s vice president national accounts multi-family.

Market growth influencers
Nonetheless, multi-family is expected to quickly rebound thanks to several favorable trends. For example, vacancy rates have never risen to levels that would cut off construction despite the vast amount of new supply added during the recovery. High demand for rental apartments over the past eight years tightened rental-unit vacancy rates and drove up rents, Dodge reported, laying down prime conditions for multi-family housing development.

“Demand kept pace with supply and is expected to remain elevated in the years ahead thanks to demographic trends—population growth among young adults—that will remain supportive,” said Kim Kennedy, Dodge’s manager of forecasting. “The lure of downtown living will continue to remain strong, and incentives for homeownership may not be replaced. All these factors add up to a healthy multi-family housing market in the coming years.”

While all of this was happening, the supply of apartments and condominiums surged, as builders responded to rising demand fueled, in part, by young Americans who preferred to rent rather than purchase a home in the aftermath of the recession, according to published reports. “Many enjoy urban life with all the amenities a city has to offer,” said Christopher King, vice president of sales, Armstrong Hardwood Flooring. “But many city locations are out of reach, financially, for some first-time buyers.”

Indeed, changing demographics is reshaping multi-family housing dynamics. For example, more baby boomers are increasingly renting by choice as they downsize their living spaces. “It’s really interesting how the traditional multi-family property was really a function of necessity,” Shaw’s Dugger said. “As multi-family housing evolved with the next generation of renters, properties feature more Club Med-type amenities as a lot of dollars are being spent in public areas such as clubhouses, yoga rooms and fitness centers.”

Multi-family is a mixed bag, which includes everything from apartments and condos to senior living spaces, student housing and factory-built homes. Each sub-sector faces its own set of macro issues impacting growth. For example, NAHB reported the market share for townhouse construction continues to rise; the typical unit is about 2,000 square feet, up 23% year-over-year for the second quarter of 2018.

“We expect the trend toward smaller units to rise,” Dietz said. “We also expect gains for factory-built housing—although the market share will remain small—and ongoing dominance of the built-for-rent segment of multi-family.”

There is a general movement toward smaller housing designs following years in which builders disproportionately constructed high-end homes. “Smaller size units, both in condos and apartments, are trending,” said Randy Rubenstein, owner, Rubenstein’s Contract Carpet/North American Terrazzo, Seattle.

The market seems to be shifting to higher-density living, industry members say, as more people are trending toward the “live, work, play” lifestyle in cities. “We are seeing smaller unit sizes but overall larger projects,” said Curtis Blanton, vice president, DCO Commercial Floors (DCOCF), Athens, Ga.

Issues, trends affecting choices
When it comes to flooring, the multi-family builder business is witnessing shifts in buyer preferences similar to the single-family new home construction and residential remodeling sectors. While choices vary by region, carpet remains the leading flooring for multi-family spaces, observers say, although market share is dwindling due to the growing popularity of hard surfaces. “Designers are specifying the so-called clean look of LVT,” Rubenstein said. “Laminate and engineered wood flooring [are being specified] in condos and apartments. Carpet tile is being limited to the corridors.”

Hard surfaces and higher-end goods are trending up. “The evolution of the LVT business has really affected multi-family to a greater degree because end users are willing to pay more as long as the return on investment is higher,” Dugger said. “Initially, residents were willing to pay more for that look vs. carpet.”

Among the fastest-growing hard surfaces are LVP and WPC products. “Buyer preferences are leaning toward hard surfaces, mainly LVT because of its great looks, durability and water resistance,” Armstrong’s King said. “Laminate is also playing second fiddle to LVT, which is constantly improving its visuals, durability and performance features.”

While homebuyers still crave natural products such as hardwood, this is not a point of emphasis in most multi-family homes. “These tend to include less-expensive commodity products that require less time and skill to install and less maintenance post-installation,” said Anita Howard, COO, National Wood Flooring Association.

Finding and maintaining installation crews who can quickly install flooring in large projects is a major challenge, experts say, given the tight labor market and higher wages paid to skilled workers. “Fast track construction schedules are also a challenge,” DCOCF’s Blanton pointed out.

Opportunities, challenges
While multi-family housing can be a lucrative business, it requires residential flooring contractors to have the necessary resources and financial wherewithal to keep up with daily service demands. “The gravity toward efficiencies has affected the mix, margin and specification of product,” said David Gheesling, CEO, FEI Group.

This transactional business requires dealers to closely monitor day-to-day operations and cash flow to keep their businesses humming. Dealers are at the builders’ beck and call, and those who can’t keep up are left behind. “Construction schedules continue to get faster and more complicated,” Blanton said. “Full-service project management as well as dedicated supervision and quality control are a necessity.”

It’s also not unusual for dealers to receive notifications from builders for next-day installations on a jobsite. This requires staff to be in sync with product and inventory needs, which helps explain why most dealers servicing the multi-family business are reportedly well-financed specialists. “Dealers who target these sectors understand the demands,” said Bob Weiss, CEO, All Tile/Carpet Cushion & Supplies, Wood Dale, Ill.

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Commercial: Retail sector lags behind improving economy

June 26-July 2, 2018: Volume 34, Issue 1


By Reginald Tucker

What do Sears, Kmart, J.C. Penney, Macy’s, Payless, Toys ’R Us, Walgreens, Michael Kors and Gymboree have in common? They are among the scores of big retail names that announced massive store closings last year. Sears (358 stores in 2017; 63 in January this year alone); J.C. Penney (138 stores); Macy’s (68 stores); and Payless Shoe Source (900 locations), to name a few.

According to a CNN Money report, retail outlets announced the closure of more than 6,000 stores in 2017, which beats the previous all-time high of 6,163 store closings in 2008 amidst the financial crisis. On top of that, more than 300 retailers filed for bankruptcy by mid-2017—a 31% increase over the same time in 2016. That begs the question: Why is it that the retail sector—which represented about 7% of commercial flooring activity in 2016 but only about 4% last year—is lagging behind other end-use markets that are on the rebound in an improving economy? Industry experts cite increased pressure from online operators combined with dramatic changes in brick-and-mortar retail design. A recent study from Pew Research Center found that nearly 80% of Americans do at least some shopping on the internet, with 43% shopping online weekly or a few times a month.

“Technology has accelerated the decline of retailers who have not been in touch with what their consumers wanted as much as their competitors,” said Richard Kestenbaum, contributing writer for Forbes magazine. “Technology helps consumers see more of what’s available, and that makes the comparison between brands so much more stark and apparent.”

One reason behind all the retail store vacancies—the highest they have been in six years—is the ongoing evolution of retail formats. According to Kestenbaum, the main reason why we are seeing so many vacancies (even though more stores are opening than closing) is the footprint and locations of the stores being closed aren’t suitable for the stores being opened. Simply put, the old stores’ formats can’t be transformed, and their locations don’t work for the new stores that are opening.

Outlook for remainder of 2018
Unfortunately, the trend seen in 2017 and in the years prior is expected to continue for much of 2018. According to a CNBC report, the amount of retail space “going dark” in 2018 is on pace to break a record, as companies with massive floorplans are either trimming back their store counts or liquidating altogether.

As of April, more than 90 million square feet of space is expected to be vacated, according to commercial real estate services firm CoStar Group, which closely tracks the non-residential construction market. The firm believes that’s on track to surpass a record 105 million square feet of space shuttered last year.

“I think there’s probably a couple more announcements coming,” said Suzanne Mulvee, a senior real estate strategist with CoStar, which predicts 2018 should be a peak year for the amount of retail space closing. “It wouldn’t surprise me to see a few more significant announcements from department stores, and more chains that continue to struggle.”

On the upside, observers believe property owners see the vacancies as an opportunity to fill spaces with new tenants that operate more profitable businesses. In a recent case study on U.S. malls, CoStar Group found top-tier, Class-A mall owners were more likely than other landlords to release a space within one year of a department store anchor moving out. “I think it gets harder and harder [for owners to find replacements] the more these big boxes come on the market,” Mulvee said.

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Commercial: Corporate, hospitality specifications drive sales

June 26-July 2, 2018: Volume 34, Issue 1


By K.J. Quinn


A flurry of activity in key end-use sectors—corporate, hospitality and education, among them—drove the bulk of commercial flooring specifications in 2017. FCNews research shows total specified commercial flooring sales grew to $6.62 billion in 2017, a 3.5% increase over 2016’s $6.396 billion.

Performance of the respective product categories varied widely, as each sector encountered macro issues impacting demand. Sales of hard surface products such as resilient and ceramic tile continued to surge, while carpet tile increased its share of the total soft surface pie. Designers cited access to a plethora of products to meet a variety of end-user needs ranging from function to price to sustainability requirements.

“To meet these needs, manufacturers have increased focus on the impacts of their products on occupant well-being and productivity,” observed Matthew Miller, president, Interface Americas, “offering a wider range of aesthetic and functional solutions to deliver against the requests of designers’ clients.”

Carpet, while it has lost share to hard surface, remains king of the hill in commercial spaces, generating approximately $3.8 billion in sales, according to FCNews research. Specified contract represents nearly 80% of carpet sales with the remainder utilized in Main Street commercial applications. As in years past, carpet tile consumption outpaced broadloom, claiming about half the volume and 60% of dollars. “This is due to two main factors—cost improvements, as additional options at the low-end range are continuously being added, making carpet tile a more competitive, appealing alternative to low-end commodity broadloom,” Interface’s Miller noted. “Second, carpet tile has added design elements, thanks to enhanced tufting technology that has come to market over the last five years at the mid- and high- end levels, expanding the settings where broadloom is traditionally used.”
Surprisingly, a fair amount of broadloom was consumed in commercial applications last year as the product remains a viable option for commercial spaces requiring a luxurious look and feel. “A lot of low-end broadloom is being sold for Main Street applications,” said Richard French, vice president of sales, Bentley Mills. “We still see some higher-end broadloom sold to the hospitality, legal and financial services sectors.”

But carpet continues to lose market share to hard surfaces. Soft surface saw its share of the commercial sector slide from 61.3% in 2016 to about 57.4%, FCNews research shows. Meanwhile, resilient grew its share of commercial sales from roughly 19.8% of the business in 2016 to about 21.3% last year. Ceramic tile’s share also grew slightly during the period, inching up from 12.9% to 14.1% of commercial sales. And while wood grew its share of the specified contract pie to 3.5%, up from 2.8% in 2016, laminates’ share fell to just under 0.4%.

Resilient is the leading hard surface, posting approximately $1.407 billion in commercial sales last year, according to FCNews research. Proponents cite its installer-friendly attributes as well as its track record in the market. “It has the advantage of comfort and flexibility when compared to unforgiving hard surface flooring like ceramic or terrazzo,” noted Robert Brockman, segment marketing manager, commercial, Armstrong Flooring. “Compared to carpet, it is more durable, has less concern around dust, moisture, bacteria and virus harboring. It also offers an ease of maintenance that costs less to keep looking newer longer.”

LVT and WPC accounted for about 39% of square footage and 49% of dollars sold in commercial resilient flooring last year, research shows, as the category expanded dramatically into areas traditionally dominated by carpet. These include hospitality, multi-family, senior living and retail sectors. Sales and volume grew by double digits—an indication average selling prices held firm. “LVT has certainly taken some share from other resilient products and it is also likely taking share from soft surfaces as well,” said Jeff Fenwick, president and COO, Tarkett North America.

VCT remains a fixture in many commercial environments, experts say, but no longer is it considered a low-cost option due to high maintenance over the life of the floor. Rubber and linoleum are positioned as healthy flooring choices and maintain strongholds in healthcare and education settings. “I do think there is a big opportunity for linoleum in Main Street commercial, which is about getting the right product there,” said Denis Darragh, vice president, North America, Forbo Flooring. “I think people are looking for a floor that’s healthy, installs easily and maybe has a bit of unique flair.”

The second-largest hard surface category, ceramic tile, saw both sales and square footage rise over the prior year. FCNews research shows the category represented 14.1% of commercial sales in 2017, up from 12.9% in 2016. “We have seen positive growth in the tile segment, which can be attributed to a combination of factors, i.e., technological advancements, commercial market recovery, consumer confidence and interest rate fluctuation,” said Gianni Mattioli, executive vice president, product and marketing, Dal-Tile. “We see continued development in high tile usage segments such as hospitality, healthcare and education.”

Hardwood also saw its share of commercial sales rise, increasing from roughly 2.8% of sales to 3.5% last year. Meanwhile, laminates’ share of commercial continues to fall industry-wide, although some manufacturers report success in some niche sectors. “New improvements in laminates technology, such as waterproof cores and more water-resistant laminates, helped sales soar up a little bit,” said Al Boulogne, vice president, commercial resilient business, Mannington Commercial. “But it’s such a small share of the commercial marketplace today that it’s hard to tell if it’s way up or down.”

The leading end-use market is corporate offices, representing roughly 48% share, according to FCNews research. The sector experienced double-digit growth over the previous year as capital budgets opened up. Demand is reportedly driven more so by renovations than new builds.

The office sector is among the most diverse segments in terms of product selection. Flooring impacts everything from the level of employee motivation and efficient workflow to employee recruitment. “This has resulted in a movement to incorporate more comfortable and fun aesthetics while creating a uniform visual throughout the office and work environment,” Armstrong’s Brockman said. “Designs that allow for an ergonomic and dynamic feel or a warm, welcoming option are favored.”

An ongoing trend is the influx of multiple flooring solutions which coordinate in design and product thickness, meaning minimal transitions from soft to hard surfaces. A case in point is the uptick of woven products in C-suite areas and conference rooms, echoing the desire for more texture and a “resimercial” feel. “We’re finding hard surface in traditional areas—some in the foyer, some in the cafeteria—but also now in office runways and corridors to help direct the flow,” noted Michel Vermette, president, Mohawk Group. “A lot of tech companies that once had stained concrete are covering those surfaces with commercial enhanced resilient tile (ERT) to help with comfort and sound.”

Carpet tile is the top flooring choice, thanks in part to evolving aesthetics and formats. The product is expanding into workstations, board rooms and privacy rooms. “Product design teams are using the modular approach to achieve new and unique pat- tern options that give interior designers a great deal of control over the finished look, making the design of each client’s space truly unique,” said Sharon Steinberg, AIA, LEEP AP, a principal architect at Stantec’s Houston office.

Resilient, hardwood, porcelain tile and polished concrete are preferred for certain areas where fashion and functionality are required. But LVT is really taking off in corporate spaces. “We’re seeing it placed in a lot of conference rooms and reception areas where end users want to highlight a high-traffic area,” said Jenne Ross, director of marketing, Karndean Designflooring.

Fashion and function are paramount in hospitality, an industry sector reportedly investing millions of dollars to remodel existing properties and build new ones. Flooring choices vary widely, depending on application and budget. For example, broadloom remains the surface of choice in guest rooms, hallways and certain public spaces, thanks to its plush looks and sound-deadening qualities.

Stone, marble, porcelain tile, hardwood and LVT continue gaining coverage in hospitality spaces, experts say, as specifiers seek to create modern, homey looks. “During the last 10 years, hospitality spaces started moving to hard sur- faces to replicate the look of the home,” noted Elizabeth Bonner, director of hospitality design for Mohawk’s Durkan brand. “There have been advances in the manufacturing of LVT products which give them much better looks that resemble actual wood and stone.”

Further fueling interest in hard surfaces are technological advances
that enable high-fashion designs and products to
last longer. Hospitality, considered the second-largest commercial sector for tile, represents an estimated 12% of sales. “The hospitality industry continues to grow, with much of the spaces requiring tile,” Dal-Tile’s Mattioli said. “Designers in the hospitality space demand unique designs, and we are taking style and design to the next level through our latest introductions.”

Healthcare experienced a spike in refresh construction projects and cosmetic remodeling last year, as the business expanded to accommodate the needs of an aging U.S. population and rebranding efforts stemming from corporate takeovers, according to published reports. One of the fastest growing subsegments is assisted living, as facility managers are creating more “homey” environments for residents. “We’ve seen a lot of living spaces, kitchenettes and common areas going to hard surfaces,” Mannington’s Boulogne said.

While the A&D community utilizes green building programs and rating systems as a general guide, experts say, they’re finding there is much more to the equation than simply performance and cost. “Healthcare-built environments are demanding, non-stop living entities that require Lean Six Sigma methods of operational management,” noted Cynthia Hubbell, vice president of healthcare and senior living segments, Mohawk Group. “So not only do products have to be sustainable in their material construction, but they also have to be sustainable in terms of how they are maintained, cared for and replaced over the years.”

Fortunately, there are commercial floors with a proven track record, experts say, helping ease the minds of designers during the specification process. Resilient sheet goods and tile, rubber and linoleum are valued for their durability, hygienic and slip-resistant qualities. LVT is expanding into many healthcare areas while modular carpet, ceramic, porcelain and terrazzo tile are commonly found in hallways, making it easier to maneuver rolling equipment and mobile aids.

“We’re seeing more demand for carpet tile and hard surfaces in healthcare, whether that is in patient rooms, mini corridors or operating rooms,” said Brenda Knowles, vice president of marketing for Shaw Industries’ commercial business.

The retail business experienced its share of ups and downs last year, which impacted flooring sales. For example, hundreds of retail locations closed their doors in 2017 and more shutdowns are expected this year. Mall vacancies, in fact, are at a six-year high.

But on the flip side, new construction and remodeling plans were announced by several major chain stores, and the new stores that are opening are adopting much smaller footprints. For instance, supermarkets are honing their layouts and remodeling to improve the in-store experience for customers, and eateries are making investments to renovate, creating interior design around a common theme.

Like hospitality and education spaces, flooring types run the gamut. Traditionally, carpet tile and LVT are among the leading flooring choices at retail, experts say. Broadloom, ceramic and hardwood are usually found in high-end spaces, while resilient, laminates and rubber are utilized in public areas. “Advancements in digital printing technology allow us to offer what this segment really needs—beautiful tile that can withstand high foot traffic,” Dal-Tile’s Mattioli said.

The environmental movement is reportedly helping stimulate demand for natural materials such as ceramic, reclaimed wood and linoleum. Wood-grain tile planks, large-format tiles and patterned tile accents are among the most popular looks and formats, according to Nicole Rehfuss, senior associate, retail, at Little. “Existing subfloor in retail up-fits may dictate the kinds of flooring we can install,” she stated. “That means instead of hardwood, we are required to use LVT due to floor leveling.”

The fourth-largest commercial segment, education, exhibited growth across the board last year, industry members say. The amount of flooring sold for K-12 applications was aided, in part, by the passage of funding to support school construction and renovation. Meanwhile, higher education invested money to renovate existing facilities and build new ones, as recruiting and retaining students often hinges on the quality of academic and living facilities. Flooring types vary, as campuses encompass a wide range of applications, such as dormitories, athletic facilities, class rooms and retail spaces. “The schools are looking for flooring that supports future ready goals, requires less maintenance, will have a timeless aesthetic, have competitive upfront costs and are in need of quick delivery for the short window to complete replacements,” Shaw’s Knowles explained.

Across the board, the needs of the education sector are changing, in part, to adapt to the new design of school-learning environments. For example, flooring is being used to create a space within a space to identify collaborative or breakout areas for small group discussions. In some areas, design preferences are shifting toward non-PVC-based products, which observers say has contributed to an uptick in rubber floors. As schools move away from mundane looks, it’s opening up opportunities for stylish products, such as LVT and carpet tile, to be specified in place of VCT.