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

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

By Lindsay Baillie

 

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

 

Thomas Baert
President
CFL

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

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

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

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

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

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

 

Larry Browder
Chief sales/marketing officer
Karndean Designflooring

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

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

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

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

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

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

 

Shane Calloway
President and CEO
EarthWerks

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

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

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

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

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

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

 

Piet Dossche
CEO
USFloors

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

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

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

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

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

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

 

Steven Ehrlich
Vice president sales and marketing
Novalis Innovative Flooring

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

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

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

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

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

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

 

Jeff Fenwick
President and COO
Tarkett North America

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

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

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

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

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

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

 

Chris O’Connor
President and COO
Congoleum

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

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

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

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

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

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

 

Michael Raskin
CEO
Raskin Industries

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

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

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

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

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

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

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Resilient: Suppliers raise the bar on surface protection

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

A floor’s design is only as good as its protective wear layer. A consumer can love the look of her new floor, but if that floor starts to show scratches and scuffs, she won’t be in love for long. To keep floors looking newer for longer periods of time, flooring manufacturers are developing innovations in surface protection for resilient flooring.

Following are various surface protection technologies used and/or made by resilient flooring manufacturers.

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Sono: Innovation personified

October 29/November 5, 2018: Volume 34, Issue 10

By Lindsay Baillie

It has been more than a year since Inhaus launched Sono—the company’s 100% recyclable, PVC-free flooring. Made up of 60% mineral powder and 40% polypropylene, Sono is waterproof, easy to install and highly stable under both humidity and heat, according to the company. What’s more, the company continues to invest in its digital printing to ensure quality, on-trend visuals.

All this has not been lost on the company’s distributor partners. “Inhaus’ Sono has been a great introduction for Hughes Western Sales,” said Zack Cone, the distributor’s vice president, marketing. “The product has given us something to offer in our market that is significantly different from any other rigid products that are available. Due to the ceramic composite core we have a product that gives us the ability to install in colder weather and offer a larger installation square footage than any other product available in this category. We love the direct-to-core digital printing, which gives us better visuals and allows us to offer a higher-than-normal, unique plank repeat.”

Scott Rozmus, president and CEO, FlorStar Sales, also lauds the product’s attributes. “Sono is an exciting product because it is unlike any other. German-made and featuring a ceramic-based core while also being PVC free, it is a wonderful extension of our Inhaus laminate collection. Aside from being very environmentally friendly, the product’s ceramic roots mean that it is essentially inert. Neither heat nor moisture impact its performance. That has proven to be a winning combination.”

Inhaus’ latest innovation starts at Classen’s manufacturing facility in Kaisersesch, Germany. The building, which is fully automated, produces Sono using patented Ceramin technology—a one-step manufacturing process that produces a homogenous product where the core is formed with mineral powder and polyolefin. Unlike other manufacturing facilities that use chemicals to create products, Classen’s production plant uses low-pressure heat to create the finished core.

“Sono is fundamentally a different product,” Derek Welbourn, CEO, Inhaus, told FCNews staff during a tour of the factory. “No one has ever done this before.”

Behind the curtain

The development of Sono starts with the preparation of the product’s two primary ingredients—mineral powder and polyolefin. Both materials are sourced from Europe and are medical grade, according to Welbourn. To ensure top-quality products, the raw materials are tested in a lab every hour.

Daniel Lang, vice president sales and marketing, Inhaus, reiterated Sono’s inert attributes. “Heat doesn’t affect it; water doesn’t affect it. Furthermore, because of the great ingredients, it’s not a vinyl [product]. The way you cure this product makes it more like a tile. It’s harder than a plastic or vinyl. However, it’s not as hard as a tile because it is still flexible.”

Next the boards are developed on a double-bed press, where the company can produce different sizes and lengths. The boards’ visuals are then digitally printed in high definition directly to the core, followed by the application of a UV-cured, clear acrylic lacquer that highlights the digital print, according to Welbourn. During the printing process, ink is also used to create texture on the boards.

Another noteworthy feature: The facility contains eight rows of printing heads with 19 heads in each row. Each printer head has about 900 openings which help create a sharp visual. “They are so accurate that when they print it’s scary,” Lang said. The facility also produces its own unique designs for each visual. Sono is available in 26 colors—22 wood visuals and four stone looks.

After the visuals have been applied, the boards enter the profiling section of the facility where tongue and groove are added to the product. Sono features Classen’s MegaLoc locking system, which allows installers to click the product together.

The end result is an extremely durable product that’s good looking as well. “You can put this product in the shower,” Lang said. “We can install [loose lay] up to 10,000 square feet without having to worry about transitions. And with a glue-down installation, you don’t have to worry about heat at all.”

Not one to rest on its laurels, Inhaus is eyeing future applications for the product. “We are better to the core—that’s our motto,” Lang explained. “What we want to do is take care of the whole concept—walls and floors.”

 

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Distribution: WPC, rigid core dominate

October 29/November 5, 2018: Volume 34, Issue 10

By Ken Ryan

 

The unprecedented growth of LVT has led to a spate of products entering the market, and some distributors worry this will hurt the category.

The above-referenced statement was published by FCNews not in 2018 but 2013, at a time when LVT was all the rage. Back then, WPC was barely making its presence felt, and rigid core products were not available. With a flood of entrants into the market, distributors were then concerned about LVT price erosion.

Five years later, much of the talk about commoditization and a “race to the bottom” on pricing seems to have dissipated. If anything, the explosive growth of WPC and now SPC has extended and accelerated the years-long rally of this resilient category. Today, distributors are enjoying 20% to 30% year-over-year growth in the segment and have shifted their mix accordingly.

“Two or three years ago, SPC and WPC were sort of a blip on the radar,” said Anne Funsten, president of the Manteca, Calif.-based B.R. Funsten, noting that LVT-related products now represent nearly 40% of sales.

Such tales are not out of the ordinary as waterproof vinyl continues to fuel industry growth. Jeff Striegel, president of Elias Wilf, based in Owings Mills, Md., said he has never seen a product category that has taken root quite like this one. “It starts with the fact that it is a true high-performance product embraced by not only the consumer but the retail salespeople. Flooring is a direct sale, meaning the RSA has tremendous influence on what the customer is going to buy. In this case, the retail salespeople are sold on this category like no other I have seen in this industry in my 43 years [in the business]. There is no downside to this product. I don’t think anyone can change that belief. As long as [RSAs] keep embracing it, I don’t see how it goes back.”

LVT-related products now represent 33% of Elias Wilf’s business (in 2015 it was 10%, but it jumped to 28% in 2017).  “In three short years it has caught up with my hardwood business,” Striegel told FCNews. “What [the LVT category] has killed is sheet vinyl; it has cut that in half and laminate by one third.”

Distributor executives said they are starting to see builders use rigid core products as a base grade versus hardwood. The downside is the lower cost of the vinyl product over wood or ceramic tile hurting wholesalers’ bottom lines. “We are selling more units than dollars,” said Hoy Lanning, senior CEO advisor at Haines, the industry’s largest distributor, noting its LVT, WPC, rigid core business is increasing more than 30% annually.

Other distributors, including Gilford-Johnson Flooring in Jeffersonville, Ind., also reported a dramatic shift in the overall product mix. In this case, hardwood is being supplanted by LVT/WPC/SPC as a leading category. “These products now account for approximately 30% of our business, which is almost double where we were last year,” said Chris Nelson, vice president of strategy, marketing and business operations at Gilford-Johnson Flooring.

Even stalwart hardwood distributors such as Denver Hardwood have seen a dramatic change. “Our network has experienced a shift in overall product mix that started six years ago and has ramped up the last two years,” said Enos Farnsworth, director of distribution sales. “It wasn’t that long ago that our network was 98% unfinished. But, due to changing consumer preferences, we have seen double-digit increases in rigid core, WPC and prefinished hardwood. These new products offer enhanced margins and innovative features.”

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Resilient: Demand fuels manufacturing output at home

October 15/22, 2018: Volume 34, Issue 9

By Lindsay Baillie

 

It seems, as of late, most eyes are on resilient flooring. This comes as no surprise, especially when considering the category’s red-hot products from the past five years. However, resilient flooring is now receiving extra attention as a result of the newly imposed Chinese tariffs. While manufacturers who import products are working through the current 10% tariff—and preparing for the potential 25% tariff at the start of 2019—those who manufacture domestically are considering ways to boost their current capacities.

Regardless of the tariff’s influence, many flooring manufacturers see domestic production of resilient flooring on the rise in 2018—a continuation of a trend seen in 2017 when domestic production increased 1.4% from 30.2% the previous year. One driver of this increase is the growth of LVT, observers say.

To keep up with the demand, manufacturers are making significant investments in their domestic facilities. Case in point is Mannington, which has more than doubled the size of its LVT plant over the last six years and has tripled the output, according Jimmy Tuley, vice president, residential resilient. “I think there’s continued investment because the category is growing and there are a lot of benefits to domestic manufacturing. Also, there’s still a big gap in the amount of capacity that’s here vs. what’s in Asia and Europe.”

Armstrong Flooring, a company that has manufactured the bulk of its flooring products in the U.S. for more than 100 years, sees the benefits of domestic production as a main driver of growth. “Manufacturing in North America typically gives us improved lead times and the ability to more rapidly integrate customer feedback into the product design and development cycle,” said Jamey Block, vice president, product management, resilient.

For Kurt Denman, chief marketing officer and executive vice president, sales, Congoleum, the increase in domestic production can be attributed to both its overall benefits as well as a strong economy. “There are market segments that are simply better served by domestically produced goods. Domestic manufacturing allows for more direct control, responsiveness to market demands and shorter lead times.”

Other industry observers see the tariffs on Chinese imports as a potential driver. “We see a steady increase in demand on our domestically produced resilient and expect this trend to continue with the uncertainty over import tariffs,” said Michael Finelli, director, Beauflor.

Tariff talk
The newly imposed tariffs on Chinese imports have the potential to effect domestic sales of resilient flooring. However, many manufacturers believe it is too early to determine the precise outcomes. “The imposed tariffs, if they remain in effect, will likely have a gradual and positive impact on domestic production over time,” Congoleum’s Denman said. “In the short-term, domestic production will likely see an increase where existing capabilities and capacity are aligned with the market needs.”

Denman added that the long-term impact is less clear, specifically because businesses often thrive when influencing factors are consistent. “Tariffs can be imposed or reversed with relative ease and speed. Adding domestic manufacturing capacity is expensive—which, if the tariffs remain in place, may be a good strategic initiative. However, if there is a reversal, a company that has invested in domestic capacity can find themselves with excess capacity and an overhead structure that is not competitive.”

Others, such as Adrienne Roseman, director of LVT, Tarkett, predict the promotion of domestically manufactured goods will significantly increase over the next several months. “The duration of the tariff will steer the amount of domestic manufacturing that comes online in the coming year. LVT manufacturers will have to closely consider new launches to ensure we can bring value to our customers.”

While the tariffs could spark an increase of investment in domestic production, manufacturers say initial investments started long before there were talks of tariffs. “Investment in domestic capacity has been well under way for the past five to seven years,” said David Sheehan, senior vice president, product management, Mohawk resilient. “Most of the traditional resilient players have all made investments in their facilities to increase capacity. There has also been investment from both Europe and, most recently, Asia to expand U.S. capacity.”

In fact, even though this investment is expected to increase, observers expect the bulk of it to come from manufacturers who already have hands in U.S. soil. One main reason for this: the cost of admission. “There is a large barrier to entry for any of the resilient manufacturing facilities,” Mannington’s Tuley said. “It’s a challenge for people who aren’t experienced manufacturers to do that.”

In addition to the literal cost of creating a new facility, the time it will take to build poses another obstacle for manufacturers looking to break ground. “Our state-of-the-art plant took three years to bring from idea to realization,” Beauflor’s Finelli said. “These shifts do not happen quickly.”

Facility updates
While it might take some time for importers to construct new domestic facilities, U.S. manufacturers are continuing to expand and diversify. For instance, Shaw Industries, which provides both domestically manufactured and internationally sourced products, has invested in the U.S. in a big way. “We are building on our $130 million investment to create domestic LVT manufacturing at Plant RP in Ringgold, Ga., by adding additional product and innovation capability,” said Tim Baucom, executive vice president - residential business. “Regardless of where our LVT is manufactured, we will uphold our current standard of excellence, which consistently outperforms our customers’ expectations.”

Armstrong produces 100% of its residential vinyl sheet products in the U.S. It’s Lancaster, Pa., plant focuses on mainly fiberglass-backed products, while its Stillwater, Okla., facility handles predominately felt-backed products as well as the company’s proprietary limestone-encapsulated felt product, StrataMax.

“We have invested millions of dollars in the domestic production of LVT to produce resilient flooring in a cost-effective manner, improve styling and be more responsive in servicing key market segments,” Block said.

Mannington is increasing its domestic capacity via the expansion of its LVT plant as well as the development of a new cutting building. “We’ve only had our new cutting building for north of a year,” Tuley told FCNews. “We’ll expand over the next nine months to a year, and this is absolutely a place we’ll continue to invest in.”

Meanwhile, Tarkett is also taking advantage of its domestic space. The company kicked off a three-year investment period back in January to increase production capacity at two facilities in Florence, Ala. “This expansion addresses significant demand for Tarkett’s vinyl modular flooring,” Roseman said.

Mohawk/IVC, which has more than 1 million square feet of production space, continues to expand its capabilities. Sheehan predicts it will soon be the first fully integrated North American producer of rigid products.

Over the past two years, Congoleum has invested millions of dollars into its Trenton, Pa., plant. According to Denman, this investment paved the way for the launch of Cleo Home. “[Cleo’s] eco-forward construction is 85% locally sourced limestone and is produced entirely in the U.S. This type of market-leading innovation simply isn’t possible using offshore manufacturing.”

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The brand power behind COREtec

By Mara Bollettieri

What’s in a name?, Shakespeare famously asked. It’s more than a label; it’s about identity, reputation and, ultimately, trust. Not only does a brand represent a company name, but it also represents everything that comes with it and how it distinguishes itself
 from other products and/or services.

COREtec—which has the power of four strong brands supporting it—knows this all too well. The synergies between Berkshire Hathaway—led by world-renowned investor Warren Buffett—along with the powerful name recognition and stature of manufacturers such as Shaw Industries and USFloors are at the very core of what defines a strong brand in the mind of the consumer.

Here’s a closer look at how each brand relates to the other.

USFloors
USFloors is largely credited with giving the flooring industry its first resilient offering featuring a 100% waterproof rigid core—aptly named COREtec. Launched in 2013, COREtec has not only spawned various iterations within the brand—each successively featuring innovations that aim to improve on the preceding collections—but also imitators looking to cash in on the latest craze. But USFloors is working relentlessly to maintain its leadership position while continuing to evolve the technology, launching successors such as COREtec Plus Premium,
 COREtec Plus HD and COREtec Plus XL.

Berkshire Hathaway
Headquartered in 
Omaha, Neb., Berkshire
 Hathaway holds major shares of numerous global companies, many of which
 are household names. The corporation also has minor shares in others, namely GEICO, Dairy Queen, Fruit of the Loom, Kraft Heinz, Duracell and Benjamin Moore & Co., to name a few.

All totaled, Berkshire Hathaway—which boasts a market value of $491.6 billion—owns more than 60 companies, according to Forbes,
 which ranks Berkshire first on its America’s Largest Companies list and No. 4 on its list of the World’s Largest Public Companies. Its much-ballyhooed purchase of Shaw Industries in 2000 elevated the manufacturer to an even higher level of prominence.

More importantly, the
purchase revealed the driving philosophy inherent in Berkshire Hathaway’s investment strategy—it only invests in or purchases companies in which it truly believes makes in impact of the lives of the people who purchase their products.

Warren Buffet
Reverentially referred to as the “Oracle of Omaha,” Warren E. Buffett, CEO and chairman of Berkshire Hathaway, is one of the most successful business investors in the world. One could argue the powerful business magnate is a brand in and of himself. According to Forbes, the 87-year-old investor is currently worth $82.7 billion.

In 1962, at the age of 32, Buffett decided to invest in Berkshire Hathaway, a
 textile manufacturing firm that was on the decline. By 1965, he was in control of the company 
and changed management
 completely. This allowed him to
 make it the foundation of the 
holding company that it’s recognized for today.

Buffett heralded the success of USFloors in Berkshire Hathaway’s 2017 recap letter to shareholders. “USF’s managers, Piet Dossche and Philippe Erramuzpe, came out of the gate fast, delivering a 40% increase in sales in 2017, during which their operation was integrated with Shaw’s. It’s clear we acquired both great human assets and business assets in making the USF purchase.”

Shaw Industries
Shaw Industries, interestingly, also started as a small business. Back in 1946 it operated as the Star Dye Co., which dyed tufted scatter rugs. Fast forward to today, the Dalton-based behemoth manufactures and distributes a host of flooring materials, including carpet, resilient, hardwood, laminate, tile and stone, synthetic turf and more to both commercial and residential markets worldwide. The company, led by Vance Bell, chairman and CEO, has around 20,000 associates globally and generates nearly $6 billion in annual sales.

Along the way, Shaw Industries expanded its product portfolio via both investment and acquisition, picking up venerable brands such as Evans & Black, Queen Carpets, Dixie Group, Anderson Hardwood Floors and, more recently, USFloors. Since that time, the company purchased Scotland-based carpet tile manufacturer Sanquhar Tile Services (STS), thereby expanding its global footprint.

 

 

 

 

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Resilient: State of the industry—WPC, SPC continue to drive category growth

August 6/13, 2018: Volume 34, Issue 4

By Lindsay Baillie

In the first six months of 2018, the resilient category has shown no signs of slowing down. In fact, some industry executives predict even greater growth for the segment in 2018 above and beyond the strides made in 2017. In keeping with last year, industry observers attribute the category’s aggressive, record-setting growth to innovations in WPC and SPC.

Some executives also see factors outside the industry contributing to the category’s success. “We believe there are several factors for resilient’s growth,” said Steve Ehrlich, vice president of sales and marketing, Novalis Innovative Flooring. “On a macro level, the overall U.S. economy is strong—GDP may reach 4%—and the housing market, both new and re-sale, is strong. All of that is good, but what makes it successful is a resilient product category coming on the scene that satisfies consumer needs so well.”

Based on FCNews research, residential LVT and its subcategories were the products to successfully satisfy consumer needs in 2017. In fact, residential LVT finished 2017 with an estimated $1.888 billion in revenue, which represented 73% of total residential resilient sales. In terms of volume, the category captured 1.379 billion square feet, or 48.1% of residential resilient volume. What’s more, WPC and SPC claimed 45.8% of residential LVT dollars and 31.8% of the category’s volume.

“LVT is a product that has come at the right time,” said David Sheehan, senior vice president, product management, Mohawk Industries. “It’s providing the right value proposition to the consumer. Retailers have really embraced this notion of leveraging waterproof, which appears to be resonating in the minds of consumers.”

Rigid products, according to Sheehan, boast physical properties that make it attractive to homeowners and end users. “It tends to be thicker, and thickness is viewed as something from the consumer that equates with high quality. It seemingly has solved some installation concerns on behalf of some retailers and flooring installers vs. its flexible counterpart.”

Much of the trends seen in 2017 have carried over into the first half of 2018. Sheet is still relatively flat; LVT is seeing growth with WPC and SPC; waterproof is still piquing consumer interest. While the category has been up overall, observers say margins are deteriorating on entry-level products. “Product awareness has helped create a much wider audience to which we can sell LVT,” said Michael Raskin, founder and CEO, Raskin Industries. “There is excitement in the category and around the new types of flooring coming out of it.”

From this sustained consumer excitement, flooring executives are bullish about the category’s prospects in 2018. “Across all segments of our business—from specialty markets, hospitality and education to multifamily and single-family homes—Shaw Industries’ and USFloors’ resilient flooring continues to consistently outperform expectations,” said Piet Dossche, president of USFloors and executive vice president of hard surface, Shaw. “Resilient flooring enables consumers to incorporate the desired looks into their homes without worrying their flooring will be scratched or damaged by water. USFloors’ customers and their consumers often remark to us on how much they appreciate LVT’s ease of maintenance and its scratch-resistant and waterproof qualities.”

Sheet’s staying power

According to statistics compiled by FCNews, sheet was down 2.8% from $596.1 million in 2016 to $579 million in 2017. The category also saw a 4.2% drop in volume. Sheet’s slowdown, observers say, is a result of the rise in WPC and SPC—not only because of the latter two’s waterproof stories, but also the perceived value of a rigid core vs. a flexible product.

“In a way, one of the secondary impacts of a successful product like rigid is it sometimes causes an overreaction in the market,” Mohawk’s Sheehan explained. “People begin to say, ‘OK I’m selling a lot of rigid, so I need to put more rigid in my store,’ and they therefore go ahead and create an imbalance in their product portfolio.”

Sheet’s slowdown is also attributed to the fact that it is a mature category, says Michael Harris, product manager, Armstrong Flooring. “Sheet vinyl is feeling pressure from LVT, primarily on the new construction side, but it is still a great residential remodel product and continues to see strength there,” he said. “Investments in manufacturing, processes and new technology are being made with a strategic view.”

Another key factor is the current installation crisis, which makes installing sheet vinyl a harder task. As Kurt Denman, chief marketing officer and executive vice president, sales, Congoleum, explains, “It is certainly no secret that a sheet installation requires a specific skill set beyond that of something like LVT. And it is essential that we, as manufacturers, understand the market and consumer preferences so we can guide the evolution of resilient sheet to ensure a strong and relevant future for the category.”

Despite another year of relatively flat performance, sheet is still a viable category. That’s according to flooring executives, who believe the category is necessary for specific commercial sectors as well as residential DIY projects. “Our research shows, with both consumers and retailers, that sheet vinyl is indeed a viable category,” Sheehan said. “There is a specific sheet vinyl buyer, and you can argue it’s regional in nature, but that’s fine. There is a sheet vinyl buyer who is walking into stores today and being traded or switched to a rigid product when she would have been perfectly fine and satisfied with a sheet vinyl product.”

Two ways to combat a sheet vinyl buyer being converted to a rigid product is through updated visuals and proper education, resilient manufacturers say. “The most important part is to push the visuals,” said Jimmy Tuley, vice president of residential resilient, Mannington. “We’ve been able to produce visuals in sheet vinyl that you just can’t replicate in LVT or any other hard surface without spending a ton of money. We just need to make that an attractive part of the offering as much as we can.”

To help create an even playing field, Mannington mounts its sheet vinyl to hard boards. This way, according to Tuley, consumers can see what it will look like once it’s installed, thereby helping sheet compete against a rigid product’s perceived value.

In terms of education, manufacturers are looking for ways to engage with today’s buyers. “Gaining awareness with younger customers will be an important key to the sheet vinyl category while maintaining retail space against the popularity of LVT, WPC and SPC,” said Jon Gittrich, vice president product management, Tarkett. “We are increasing our social media and exposure on home improvement shows.”

LVT maintains its lead

It should come as no surprise that LVT and its subcategories, WPC and SPC, are seeing continued momentum through the first half of 2018. As the main drivers of residential resilient sales, their success begs the question, where does the LVT category go next?

Industry observers see the trio continuing to innovate in terms of style, design and features. “There are a couple of different innovations that will come in both construction and newer performance stories,” said Mannington’s Tuley. “But even bigger than that, innovation will be similar to sheet vinyl—continuing to make vinyl products that mimic real products exceptionally well. If you look at the LVT category over the past 10 years and compare a sample of LVT from 10 years ago to today, there is a remarkable visual difference.”

Novalis sees seemingly endless possibilities with WPC and SPC because the products are still relatively new. “Digital printing, larger size tiles and planks, wall applications and increased physical performance characteristics are just some of the changes that will help keep driving sales in both SPC and WPC categories,” Ehrlich said. “Innovation at Novalis has led to exciting new looks and styles we brought to market in our Serenbe collection this year.”

As relatively new products, WPC and SPC also have the opportunity to continue answering the needs of retailers and consumers.

“I foresee technical advancements in this category, allowing printed visuals to evolve from a hardwood to a ceramic tile visual,” USFloors’ Dossche said. “For consumers desiring a ceramic tile look, the skill set needed to install that product is hard to find given the current shortage of qualified tile installers. Stone-look LVT could answer a number of needs, such as do-it-yourself installation and quicker installation in homebuilding.”

The success of this category is also reliant on better machines, faster technology and overall improved production, according to Amy Sadler, national sales manager, EarthWerks. “We are optimistic that capacity and speed to market are only going to continue to progress, thus driving the capabilities in this segment,” she added.

Beyond technological innovation with respect to product attributes, the category’s success also relies on proper education. “Retail training and passing valuable information to the consumers is important,” Raskin said. “Innovations are great, but with so much change sometimes the products aren’t explained properly in the marketplace.”

WPC, SPC steal share

As with any new and successful product, both WPC and SPC are starting to steal market share from other products in the industry. At a macro level, these two products are helping resilient steal share from laminate and other hard surfaces as well as carpet. At a micro level, WPC and SPC are stealing share from sheet vinyl and traditional LVT, experts say.

“These types of products are taking share from virtually every category, including laminate, hardwood and ceramic,” said Larry Browder, chief sales and marketing officer, Karndean Designflooring. “They require less subfloor preparation, can go over existing hard surface floors—thus reducing/eliminating tear-out costs—and cause less upheaval and down time on the job site. All of this results in lower installation costs for the homeowner or end user and potentially less hassles or callbacks for the retailer and installer—provided they are using a quality product and installing the floor correctly.”

Along with the ease of installation, WPC and SPC solve certain issues other products cannot. “It has the maintenance attributes that all families are looking for, making it ideal for kid-friendly and pet-friendly spaces,” EarthWerks’ Sadler said. “Style and design have drastically improved, and when you add the waterproof and performance capabilities, you have the perfect story for the ideal product.”

Domestic vs. imports

Being that resilient—specifically LVT, WPC and SPC—is such a sought-after category, manufacturers agree that a balance between domestic production and importation will always exist. Even though many manufacturers still import, there are a number of domestic facilities being built to create LVT and now WPC and SPC locally.

“We believe in the viability of domestic production,” Mohawk’s Sheehan said. “After we purchased IVC and started leveraging its U.S. assets, we were very aggressive in making sure we got our flexible LVT plant up and running. We’re continuing that same tradition with our new rigid plant.”

Sheehan added that while Mohawk is focusing on domestic production, it still understands the need to supplement its product offering with what he calls “good partner relationships with our supplier partners in Asia.”

Mohawk is not the only manufacturer investing in domestic production. Armstrong Flooring’s state-of-the-art facility in Lancaster, Pa., as well as a portion of its plant in Stillwater, Okla., are being used to produce resilient flooring. “We have invested in the domestic production of LVT to produce resilient flooring in a cost-effective manner, improve styling and be more responsive in servicing key market segments with inventory,” said Jeremy Kleinberg, senior product manager. “We expect to continue to offer both a mix of domestic production and sourced product to best meet our customers’ needs.”

While domestic production continues to grow, industry observers explain there is not enough capacity in the U.S. to successfully fulfill consumer demands. “As of now, I think domestic production will supplement overseas production,” Raskin stated. “Getting production lines up and running has been difficult for larger U.S.-based operations, so they still rely on outsourcing from Asia. The demand has grown considerably, but there hasn’t been the fastest momentum from domestic plants; a huge surge in demand creates a strong need for overseas production. Unless demands decreases—which may or may not happen if a tariff is imposed—overseas production will still be required.”

What’s next?

As the hottest segments within the resilient category continue to generate consumer interest and, naturally, sales, suppliers expect to develop new innovations to maintain that momentum. Case in point is the new resilient portfolio from Provenza Floors, which in the past has been known primarily for its expertise in hardwood flooring production. As it turns out, the company is utilizing its vast experience on the wood product development side to create extremely realistic vinyl flooring offerings.

“Many people have entered the LVP market, but what we are seeing is a repeat of patterns,” said Ron Sadri, principal owner. “What we decided to do, in order to differentiate ourselves in the market, is digitally scan our real hardwood flooring products and create our own resilient looks that are exclusive to Provenza. Specifically, we will be adding about 14 new SKUs—all long boards in primarily oak looks—to our Moda Living line of luxury vinyl planks.”

But the company is not stopping there. Provenza has also developed what it calls an engineered stone powder composite core product that features an LVT top layer. Highly dense and durable, but still affordable, the new line scored high marks in focus groups and dealer and distributor previews. “We are taking what we believe are the best visuals for consumers and designers that are price driven, and yet maintain the same integrity and quality for which Provenza is known,” Sadri stated.

In addition to more manufacturers entering the category, existing resilient suppliers are competing with new introductions. “While not technically an LVT product, the introduction of CLEO is a perfect example of innovation in hard surface that has been met with incredible enthusiasm,” Congoleum’s Denman said. “It is different in every way and is set to be a game changer for the industry. CLEO is a first-in-class, eco-forward construction that is entirely PVC free and features a mineral composite core that is 85% domestically sourced limestone coupled with solvent-free, high-fidelity digital imaging and a high-performance, ultra-clear, VOC-free top coat.”

Most resilient manufacturers see the success of LVT, WPC and SPC continuing well into 2019. Novalis’ Ehrlich sees sales for these products continuing to rise as more displays are placed in showrooms and as more consumers begin to share the benefits of resilient flooring. “More retail and commercial segments are embracing the category, so we see a very bright forecast for the remainder of 2018 and 2019,” he stated.

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Resilient: Marmoleum dealers sing product’s praises

July 9/16, 2018: Volume 34, Issue 2

By Lindsay Baillie

 

Forbo Flooring Systems’ Marmoleum line, long utilized in commercial applications, is finding favor residentially. Retailers who report success selling the line cite various attributes, including the product’s updated visuals and, of course, the environmental story as major selling points.

“Marmoleum sheet flooring is our No. 1 resilient product by a wide margin,” said Curt Stiger, manager, Major Brands Floor Supply, Seattle. “We stock over 50 colors of sheet material, more than 25,000 square feet of Marmoleum tile and 10 colors of Marmoleum CinchLoc.”

Stiger is not alone. Jeff Lerner, owner of Floorcraft Carpet One, San Francisco, is also a believer. “Forbo has great existing looks and the company has added some innovative visuals to its collection,” he explained. “We love presenting Marmoleum to our customers. We tell them, ‘Here’s a product that doesn’t try to look like others. It just tries to look like itself.’”

For dealers like Stan Levy, president of A-1 Floor Covering, Los Angeles, the appeal of Marmoleum is its versatility. “Now consumers can get it in a couple of different looks and textures,” he explained. “It’s really an update from the looks they’ve had for years. Customers like the fact that it’s a green, natural product. And here in Los Angeles, it’s a big selling point when restoring the original look of homes.”

Consumers are gravitating toward the product’s green attributes for sure, dealers report. Unlike other resilient products, Marmoleum is made of all-natural ingredients such as wood flour, jute fiber and linseed oil. What’s more, the flooring product contains no plasticizers, phthalates, volatile organic compounds or toxic chemicals.

All of these qualities and so much more give dealers like Patrick Rutledge, general manager, Green Depot, Portland, Ore., full confidence in selling the product. “Marmoleum Click CinchLoc is where we have seen a big jump in sales. It’s super easy to install—just about any flooring installer can do it. The indoor air quality health aspect is the next biggest thing.”

But at the end of the day, the clincher for many dealers is the look. Marmoleum is available in more than 300 colors and patterns as well as 12 different structures. Consumers have the option of choosing modular formats or sheet products depending on their needs. A floating floor option, Marmoleum Click CinchLoc, is also available for the DIY customer.

“There’s something for everyone,” Green Depot’s Rutledge said, citing Marmoleum’s expansive color palette and range of options.

Sam Snow, owner of Eco-Floors in Portland, Ore., is in agreement. “Their line offers some great retro looks that work well in our market, where people are going for a period-correct kitchen or bathroom remodel. With such a big line of products, it can easily cover both residential and commercial applications.”

The fact that consumers are consciously seeking out more environmentally friendly products is also driving interest in products such as Marmoleum. As Mike Masucci, owner of Ted’s Flooring and Interior Design, Albany, N.Y., explains: “A lot of people are looking for that natural product. People who aren’t looking for linoleum often see the new colors and say, ‘Wow, I’ve never seen anything like it.’”

Service counts, too
Beyond the aesthetic and performance attributes, retailers who sell Marmoleum cite the top-notch support Forbo provides. “Forbo also conducts a school for our mechanics,” said Ron Codron, owner of Abbey Carpet of El Cerrito in California. “Consequently, we receive an important credential upon graduation, something many competitors fail to do. This gives us an edge.”

Eco-Floors’ Snow concurs. In fact, Forbo recently held an informal training at the retailer’s warehouse for both its in-house installation team as well as a few other local crews the company utilizes regularly. “Forbo has been a great company to work with in terms of support and customer service,” he stated. “It’s easy to tell the folks at Forbo take great pride in their products and want them to be successfully installed and truly enjoyed by the end user.”

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Resilient: WPC, LVT, SPC continue to reign supreme

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

 

By Lindsay Baillie

The resilient category once again led the flooring industry in terms of percentage growth, thanks mainly to the performance of sub-categories such as WPC and SPC. FCNews research shows the category generated $3.993 billion in sales in 2017—an industry-leading 14.1% increase over 2016’s $3.499 billion. In terms of volume, the category racked in 4.024 billion square feet at the first point of sales, a 13.8% increase from 2016’s 3.537 billion square feet.

The resilient sector’s chart-busting performance in 2017 comes even more into focus when measured against other hard surfaces. When stacked up against ceramic tile, hardwood, laminate and other hard surface materials, resilient accounted for 30.34% of sales. When taking total flooring sales into account, resilient represented 18.15% of revenue and 20.4% of volume.

What’s even more impressive is the fact that resilient flooring’s percentage increase in revenue is a little over three-and-a-half times the growth of the entire industry, while volume growth is approximately five times that of the flooring sector as a whole.

Resilient’s double-digit growth in sales in 2017 is even more significant when looking at its performance over the past few years. FCNews research shows 2017’s sales represent a 36.6% increase over 2015’s $2.924 billion and a 60.2% increase com- pared to 2014. To put resilient’s growth into perspective, total resilient sales increased by 96.2% from 2012’s $2.035 and 81.8% from 2007. Meanwhile, total resilient volume increased 65.6% from 2012’s 2.43 billion square feet and 23.8% increase over 2007. The greater percent of increase from 2012 compared to 2007, observers say, reflects the effects of the Great Recession, which had just started in 2007 but was felt through 2012.

Industry executives cite several factors that contributed to another year of stellar growth of the category. One of which is the lingering effects of an improving economy. As Kurt Denman, chief marketing officer and executive vice president, sales, Congoleum, explained, “Fundamentally, the economy is good. Consumer confidence is high and there’s a ton of building going on, which has helped in all aspects of resilient.”

Many resilient manufacturers also point to the overwhelming success of WPC and rigid core products. “Multi-layer flooring is leading the way in LVT growth,” said Russ Rogg, president and CEO, Metroflor Corp. “While other variations are also growing, multi-layer flooring is outpacing glue-down and other varieties in a significant way.”

Executives like David Sheehan, senior vice president, product management, Mohawk Industries, believe WPC and rigid core continue to help push the resilient needle as more people discover the products’ benefits. “Floors that are rigid in nature are the darlings of the industry and have captured the attention of many sales associates and, in some cases, are being oversold to customers,” he noted.

Another key factor driving resilient sales is the constant innovation surrounding LVT, WPC and rigid core products. “Compared to other flooring categories, the LVT sector has seen many changes from additional looks, durability, availability and sheer innovation,” Jamey Block, vice president, product management resilient, Armstrong Flooring, told FCNews.

Beyond the category’s various product attributes, another driving factor is the number of manufacturers in the resilient game. “More people are discovering the benefits of resilient flooring,” said Steven Ehrlich, vice president of sales and marketing, Novalis Innovative Flooring. “That discovery fuels demand, which, in turn, fuels more production—and so on.” Another factor is the growing availability of resilient across a variety of flooring brands, he added.

Residential rules the roost
FCNews research shows the residential market made up almost 64.76% of total resilient revenue or $2.586 billion. Residential resilient also accounted for nearly 71.8% of total resilient volume. What’s more, residential LVT (including WPC and SPC) finished out 2017 with an estimated $1.888 billion in revenue, representing 73% of total residential resilient sales. In terms of square feet, research shows this red-hot product garnered 1.379 billion square feet, or 48.1%, of residential resilient volume.

Resilient manufacturers attribute the category’s stellar performance, in part, to the strength of key end-use sectors. While some industry executives see the greatest activity in the replacement/redesign markets, others are finding their products being used in builder/new home construction applications—including both single- and multi- family installations. However, most executives agree each segment is seeing a different resilient product take over market share.

For Armstrong, the replacement market continues to be strong. “We’re seeing strong growth across channels for remodel work,” Block explained. “We are also seeing a lot of excitement in new home construction with [rigid] products.”

According to David Kim, managing partner, NuFlors, single- and multi-family in new home as well as residential remodel saw improved growth in 2017. “Both [sectors] are expected to surge as the year continues,” he said. “As new construction has seen continued growth the last 10 years, we also see replacement growth as new technologies make it easier to replace and renovate existing floors.”

While some manufacturers are seeing mostly WPC and rigid in the multi-family segment, other companies feel more dry- back is being installed. “That’s where the majority of the dryback business is,” Lindsey Nisbet, marketing director, EarthWerks, told FCNews. “[Builder] may be taken over by WPC, but [dryback] is standing strong in multi-family.”

Within residential LVT, click, floating and dryback products saw quite the shakeup. Back in 2016, click represented 39.7% of LVT revenue. In 2017 that number jumped to 55.1%. The large increase in click sales, observers say, resulted in a percent decrease for both floating and dryback products, which went from 6.8% to 4.8% and 53.5% to 40.3%, respectively.

Last year proved to be a big year for WPC and SPC, which claimed 45.8% of residential LVT dollars. In terms of volume, the sector’s go-to products captured 31.8% of residential LVT. Despite click LVT’s growth in 2017, many are seeing the product lose share to WPC and SPC.

“Whether it’s WPC or rigid core, there are a couple of things they just do better,” Congoleum’s Denman said. “One is it’s an easier installation product because you’re not trying to get that floppy click to come together. It inherently has a stronger locking joint. Most of it is sold with a backing on it so you’re getting sound mitigation. Generally speaking, it’s a better perceived value. If you hand someone a floppy click product and a WPC product and tell them price is relatively the same, as a consumer you’d take the thicker one. Plus, they’re doing great things with it, such as embossed in register, enhanced edges, longer boards.”

Another factor in WPC and SPCs’ takeover is the decrease in click innovation, according to EarthWerks’ Nisbet. “We have some of our click products that are still doing well, but you don’t see a ton of new click products being developed. The rigidity of WPC and SPC products just make it easier to install and a higher performing product.”

While WPC has continued to steal market share from sheet and traditional LVT, it is now facing its own pressure from SPC. Most flooring executives see a place in the market for both WPC and SPC, citing their differentiating factors as being enough to keep both alive.

“We have been educating our salesforce along with the RSA and consumer as to the benefits of both WPC and SPC,” said Jamann Stepp, director ofmarketing and product management, USFloors. “It’s not that one is necessarily better than the other, but rather WPC is designed and geared toward residential installations while SPC is engineered for more of a commercial application. The growth of WPC/SPC will continue to affect the growth opportunities for sheet and flexible vinyl. However, there will continue to be a market for these producing traditional click LVT, but we are firm believers that WPC will continue to represent the majority of multi-layer flooring category sales,” Metroflor’s Rogg said. “WPC products, which generally have a more traditional LVT decorative surface, still offer benefits SPC products don’t—such as more authentic textures, lighter and more easily handled larger sizes and formats, better acoustic advantages and so forth.”

Sheet cedes share
As a result of LVT, WPC and SPCs’ continued success, sheet vinyl products continue to lose market share. According to FCNews research, the segment was down 2.8% from $596.1 mil- lion in 2016 to $579 million in 2017. What’s more, the category saw a 4.2% drop in volume.

In addition to the increased consumption of LVT and WPC, there are other factors affecting sheet’s market share, industry experts say. “Installation is a significant issue for all flooring, especially with sheet,” Mary Katherine Dyczko-Riglin, product manager of residential sheet vinyl, Mannington, explained. “It’s hard to find installers across the country. With the installation being perceived as easier for click products, that’s definitely helping it steal share. Things that have always traditionally been sheet are also seeing dryback start to come in and take its place.”

Heavy promotion of LVT and WPC is also a factor. “I think the numbers we’re seeing right now are indicative of people becoming very aggressive with overselling the capabilities of a low-end LVT,” said Michael Finelli, director, Beauflor USA.

Despite sheet’s continuous loss of market share to LVT and WPC products, most manufacturers don’t see the sub-segment going away for good. “There are certain price points that sheet goods will always be able to participate in that I don’t believe LVT or WPC will be able to,” said Drew Hash, vice president hard surface product category manager, Shaw Floors. “There’s a place for all of them—it just may not be the same mix that we see today.”

Mohawk also sees a place for sheet. “We’re convinced there’s always going to be a flexible market,” Sheehan said. “And the value proposition of sheet is still great.”

Within sheet, FCNewsresearch shows felt continues to lose market share to fiberglass. While felt was approximately 26.3% of sheet dollars and 29.7% of sheet volume in 2016, the product has dropped to 22.5% of dollars and 25.3% volume in 2017. Most manufacturers note the benefits of fiberglass as the products main selling point; however, many are still seeing success with felt.

“Felt is definitely continuing to lose share quicker than fiberglass,” Mannington’s Dyczko- Riglin said. “And it’s starting to lose share not only to fiberglass but to LVT. The fiberglass-backed products are typically a bit more installation friendly; they’re a bit more resilient to minor errors, handling issues, etc. They’re not going to break or permanently crease. Whereas with felt, you have to have a little more finesse.”

In addition to ease of installation, proponents say fiberglass-backed products offer comfort underfoot and water resistance. “While we do forecast the shift from felt to fiberglass to continue, Armstrong Flooring continues to bring industry-leading designs to our felt structures because we know there are still segments of the market and consumers that want a felt product,” Brock stated.

Congoleum is also seeing strength in its felt business. However, as Denman reports, the company is seeing some shifts in residential remodel, which is moving more toward LVT.

Some manufacturers believe the industry has only scratched the surface with respect to resilient’s global popularity and innovation. “LVT is still in an early growth stage,” said Jenne Ross, director of marketing, Karndean Designflooring. “We’re getting a lot of people who are still early adopters and are just finding out about the overall durability and performance of the product.”

Commercial keeps climbing
Resilient products in the commercial space clocked in at $1.624 billion in 2017, a 28.5% increase from 2016, according to FCNews research. What’s more, the segment also saw a 17% increase in volume. Industry experts believe healthcare, education, Main Street and hospitality markets helped propel commercial growth. Experts also cite factors including the increased presence of WPC and rigid core products, and hard surface’s continued seizure of market share over soft surfaces.

“We’re seeing that kind of growth in every channel we service, whether that’s Main Street or traditional commercial,” Shaw’s Hash said. “I think that’s because the product offers just so many great attributes in every channel.”

Much of commercial’s sales came from commercial-grade LVT, which clocked in $796.5 million in 2017—a 22.8% growth over 2016’s $648.6 million. Within this sub-category, WPC made up a good portion of dollar growth, swelling from $24 million in 2016 to a little under $72 million in 2017. Dryback saw a 5.1% growth in volume, while click has started to see a drop-off—likely due to WPC’s growth in volume from 11.5 million square feet in 2016 to 41.7 million square feet in 2017.

“The movement from soft surface to hard surface is continuing to work its way into all commercial segments and is one of the contributing factors to resilient growth overall,” Armstrong’s Block explained. “The products’ looks as well as the demand for durability and ease of maintenance continue to propel resilient flooring solutions to the forefront.”

Michael Raskin, founder and CEO, Raskin Industries, has seen growth in hospitality in particular. Reason being? “Hotels are doing away with carpet because of poor maintenance, staining and odors. The benefits of LVT that apply to hospitality include durability, warm visuals and easy maintenance. In addition, we are offering acoustical backing to meet sound requirements.”

Al Boulogne, vice president, commercial resilient business, Mannington Commercial, sees traditional glue-down as the main driver of growth in specified contract applications. “While WPC and SPC have been huge drivers of growth on the residential side, it’s a little different on the commercial side,” he explained. “Even though WPC and SPC are certainly driving growth in multi-family and hospitality, for the more traditional commercial segments I still think it’s traditional LVT that is gaining momentum. There is so much about the category that pulls it through.”

Commercial sheet rose to approximately $224 million in 2017, a 4.9% uptick increase over 2016’s $213.5 million. This increase, according to resilient experts, is a result of multiple factors—not the least of which is product performance. “No doubt the increase in sheet is due to new products and advances in technologies,” said Jeff Collum, president and CEO, Shannon Specialty Floors. “We are also seeing an increase in sheet use in education, hospitality and government markets. Non-vinyl sheet is also capturing more and more commercial business.”

VCT holds on
With all the talk surrounding commercial-grade LVT, WPC and the like, it’s easy to overlook traditional product categories such as vinyl composition tile (VCT). But statistics show the sub-category is still very much relevant. According to FCNews research, VCT saw a 0.6% increase in dollars (essentially flat) but a 7.7% increase in units.

“VCT provides unique value and long-term durability that high-traffic commercial customers appreciate and very few other products can replicate,” Armstrong Flooring’s Block said. (Armstrong Flooring purchased Mannington’s VCT business in 2017.) “We have also identified opportunity to further enhance this value with the extension of our Diamond 10 technology to the VCT category.”

Rubber rises up
FCNews research shows rubber generated $217 million in sales in 2017, a 3.1% uptick over 2016. In terms of volume, the category accounted for 57 million square feet, which translates to a 4.1% increase from last year. Some flooring executives attribute this overall increase to rubber’s use in areas other than heavy commercial environments. Others suggest rubber’s natural resiliency, resistance to stains, mildew and mold, and call for less chemicals makes it more appealing in places such as healthcare, hospitality and offices.

“As environmental concerns rise, specifiers are realizing rubber flooring’s green benefits,” said Joe Visintin, product manager, Tarkett North America. “For example, with no finish application required, fewer chemicals are required to maintain the floor and less water is used.”

Proponents believe rubber is receiving more attention thanks in part to updated visuals and innovative locking systems. Visintin sees rubber making its way from airports and schools to other areas as well such as healthcare waiting rooms, corporate hallways and offices, and hospitality lobbies.

Mike Tierney, national sales manager, Roppe, sees newer and brighter visuals as a driver for success. “Rubber flooring has always been popular in healthcare and education segments largely due to inherent traits such as the natural resiliency, resistance to stains, mildew and mold, comfort underfoot along with ease of maintenance,” he said. “However, newer colorations and versatile sizes or profile patterns make rubber flooring a great option for retail and hospitality spaces as well.”

Linoleum also shines
FCNews research shows linoleum experienced an 8.75% increase to $87 million from 2016’s $80 million. What’s more, its volume increased 8% to 32.25 million square feet. According to Denny Darragh, general manager North America and Asia, Forbo Flooring Systems, linoleum’s growth was driven primarily by the education segment. He also explained that linoleum’s stable pricing resulted in almost an exact percent of increase for both revenue and volume.

Imports vs. domestic
The resilient category is still heavily reliant on import activity with 68.4% of product coming from outside the United States, FCNews research shows. Despite this percentage, domestic production continues to increase, taking a small percentage away from imports. In 2017, domestic production accounted for 31.6% of the category, a slight increase from 2016’s 30.2%.

“There has been a shift toward U.S.-made LVT,” Armstrong’s Block said. He cited the company’s own state-of-the- art facility in Lancaster, Pa., as well as capital investments in its Stillwater,
Okla., facility. “We have invested millions of dollars in the domestic production of LVT to produce resilient flooring in a cost-effective manner, improve styling and be more responsive in servicing key market segments. We’ll continue to balance domestic production and sourcing product to best meet our customers’ needs.”

When looking at specific products, anecdotal research shows approximately 85% of residential sheet is domestic and about 77% of commercial sheet is imported. VCT continues to be virtually domestic, while all linoleum is imported. In terms of LVT, about 75% of commercial LVT is imported. Roughly 80% of residential LVT is made abroad, as is all WPC.

Even though U.S. manufacturers continue to increase domestic production capacities, the bulk of LVT remains imported. According to Beauflor USA’s Finelli, the need for imported LVT products has caused an oversaturation of the market. “You have a lot of overcapacity from import manufacturers that saw a big opportunity in the growth of the LVT category. It’s such a fast-moving product for us that we rely still on our European manufacturing for our LVT. The goal would be to bring that here to the U.S. in the next year or two.”

With both domestic production and imports, the resilient category faces a pricing war. For manufacturers, such as Raskin Industries, newer products have to rely less on beating prices and more on innovative design and proper distribution.

“It can’t be all about price,” Raskin explained. “You need to give on certain products to compete with the large, high-volume, carpet-manufacturing companies and good distributor partners to understand how to work with brands on better items. You need to offer unique designs to separate yourself from the price war.”

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Xpress Global Systems opens new service center

Chattanooga, Tenn.–Xpress Global Systems, LLC (XGS) has opened a new, 68,500-square-foot service center in Lakeland, Fla. According to Darrel Harris, CEO, the new facility allows XGS to more efficiently service a greater footprint in Florida.

“Analysis showed us that a much larger, more modern facility in Lakeland would provide better service to our valued customers and allow us to improve efficiencies,” Harris stated. “The Lakeland facility fits well with our expansion plans in the Florida market and beyond.”

XGS, which began in 1986 as a long-haul shipper for the carpet industry, employs more than 600 people across 31 facilities around the U.S. With decades of experience serving the transportation needs of the floor covering industry, XGS has a long track record of success in handling a wide range of products, including carpet, hardwood, laminate, vinyl, tile and area rugs.

“XGS remains committed to efficiency and growth in 2018 and beyond,” Harris added. “We are happy to add the Lakeland facility to our portfolio.”