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Laminate: What’s selling now? Products that move across the U.S.

January 19/26, 2015; Volume 28/Number 15

Laminate may have appeared to be overshadowed by LVT in recent years, but many suppliers and retailers would agree that the category does, in fact, have a solid place in the market. Manufacturers continue to enhance laminate’s style and design to keep it appealing to customers. FCNews asked a retail store from each region of the U.S. what its best-selling laminate product is and why. Here we graphically reveal their responses.

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Laminate: NALFA takes the high road

January 5/12, 2015; Volume 28/Number 14 

Screen Shot 2015-01-16 at 12.33.37 PMThough laminate flooring’s market share has been negatively impacted by LVT—often the result of a direct sales-pitch assault espousing LVT’s superiority due to its water resistant, silent nature—North American Laminate Floor Association (NALFA) members have refrained from responding to the attack. Now, for the first time, NALFA president Bill Dearing discusses the issue in an exclusive FCNews interview.

FCNews: Why hasn’t NALFA responded to the LVT suppliers specifically selling against laminate flooring?

DEARING: We at NALFA have an understanding that we should promote the benefits of NALFA rather than get caught up in political nonsense and attack a single category. Our personal belief is to talk about what you can do, not what the other guy can’t.

FCNews: Is NALFA aware of the separation issues some click and loose lay LVTs are experiencing? And, if so, why not capitalize on it?

DEARING: I don’t want to come off as knocking LVT, but strictly from a technical perspective it does have some drawbacks—every product does. All I’ll say is that laminate doesn’t experience those joint expansion issues that could arise from seasonal temperature changes.

FCNews: So laminate won’t expand or shrink from exposure to sunlight or turning the heat up or down?

DEARING: No. It just doesn’t happen. In fact, NALFA-certified laminate is used extensively in Toronto condominiums because it won’t separate or pop up from raising the heat in winter or cooling the condo down in the summer. Laminate flooring has been proven to work in Canada and in climates around the world that are much more severe than what is experienced in the United States.

FCNews: Though NALFA won’t directly counter LVT, is it doing anything new to promote the category?

DEARING: We will have a pavilion at the Las Vegas NAHB International Builder’s Show—that market is coming back as far as real estate is concerned; they’re upgrading to laminate. We’ll also have a pavilion at Surfaces again. This will be our second year of having a pavilion there.

FCNews: Any additional thoughts or points about laminate you would like to convey?

DEARING: I don’t understand why laminate continues to be portrayed as a weakened category or why some of the trade press gives that impression. Not only have we seen sales increase the past two years, but, more important, we’ve seen a significant increase in square-foot prices. That’s a good sign that the consumer is able and willing to loosen her purse strings and go after better products she didn’t consider a few years ago. That should make everybody happy. It’s nice to talk about square-foot increases, but a price increase you can take to the bank. It’s good for the dealer and our membership. That’s significant.

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Suppliers look for market opportunities with innovative styles, designs

December 8/15, 2014; Volume 28/Number 12

Laminate

By Ken Ryan

Flooring manufacturers and association members are forecasting growth of between 1% and 5% for laminate in 2015. While not headline-grabbing numbers, it does represent an increase for a segment that has been hurt by competing products and big boxes. Laminate continues to grow by offering high performing, visually appealing characteristics at affordable prices.

Derek Welbourn CEO, Inhaus

Screen Shot 2014-12-10 at 2.45.03 PMOverall we see the market as a bright spot. We have seen continuous success for ourselves and for our competitors. There is definitely a little wind at our back with market demand, and we believe this will continue. It doesn’t seem to us that the market is growing at a pace that will create a bubble, but rather slow, steady growth that is benefiting the industry as a whole both now and in the longer run. This is our outlook for North America.

However, being part of the Classen Group based in Germany, the European market is important to us and we see some weakness there. One note of caution is that if Europe slides into a recession it could be bad for North America. We are all tied to the global economy; I believe that the saying is, “If Europe catches the flu, best case scenario, North America gets a cold.”

We see the laminate market in North America continuing to grow—5% in dollars and even higher numbers in volume because of lower and mid-priced laminate taking a larger share of the market. We see the mid and upper end of the laminate market growing but getting increased competition from other categories, mainly LVT. There is also tremendous growth in hybrid products that combine strengths of multiple categories such as wooden-based composite products. We have made a major investment in this growing category that will be making its debut at Surfaces.

Laminate is continuing to grow as it offers value with high performing and visually appealing attributes at a very affordable price point relative to other categories. For this reason the low- and mid-end laminate segments continue to claim share.

We continue to be successful and enjoy the laminate category. It is our focus. 2014 will be the third year running that Inhaus has posted a strong double-digit growth. This is due to our customers having success with our unique laminate line, leading to an increased focus on our offerings. We also continue to expand geographically, and have an ongoing focus on new designs and innovations. Our laminate line is not for everyone as we center on design-oriented products. We find that consumers who are looking for something unique that fits more with their personal style often choose Inhaus. We will not be changing this strategy and we will be launching six new, totally unique laminate designs in 2015. We see more steady growth in 2015 for both Inhaus and the industry.

Roger Farabee Senior vice president, marketing, Unilin NA/Mohawk Hard Surfaces

Screen Shot 2014-12-10 at 2.45.09 PMWe are forecasting laminate to be up about 1% in dollars for 2015. This growth will continue to be driven by sales outside of specialty retail. All category growth will come from home centers, warehouse clubs and national retailers such as Lumber Liquidators. We anticipate floor covering retail [for laminate] to be down again in 2015 as in 2014.

Weakness in Europe impacts the U.S. market for laminate in that it allows for more low-cost goods to come in, adding to the imports from China. This is putting pressure on all domestic producers, particularly at some of the opening price points.

We have a lot of exciting new products coming in 2015 for both Quick-Step and Mohawk. We will introduce the new Mohawk products at the Solutions convention [in early December] and the new Quick-Step products at Surfaces.

Barbara June Marketing manager, Kronotex USA

Screen Shot 2014-12-10 at 2.45.16 PMLaminate has been steady in 2014 and we expect modest category growth in 2015. Homeowners and businesses alike have numerous flooring options today, more so than ever before with the new tile and vinyl wood looks. Laminate is still a superior choice for the discerning owner who wants durable wood flooring without the expense and mess of traditional hardwood installation. Trendy decors are invigorating the category as well, from end planks to wood grains in vibrant art colors. Laminate can give the consumer the exact look she wants—quickly and economically.

As for us, the initial response to our new American Concepts collection has been outstanding, and we anticipate continued growth in 2015. We have a few changes in store for next season, but for now let’s just say that we are listening to customer demand and industry-wide feedback.

Bill Dearing President, North American Laminate Flooring Association

Screen Shot 2014-12-10 at 2.45.24 PMLaminate overall will improve but not double digits or anything [major]. I see a small increase, no more than 5%; if that happens, I will be happy.

I expect the industry will dovetail to the recovery of the real estate market. Laminate remains predominately a remodel product and the economy is now progressing enough that all flooring materials are benefiting. Laminate flooring is no exception and consumers appear to appreciate the value option with the styling that laminate flooring provides.

I am bullish on 2015. If you look at the West Coast market, where I am located, it was up, it was down, and now it is up again. That is a good sign, hopefully too for the rest of the country. I think [consumers’] pocketbooks will open up for more exotic and decorative laminate floors. That market will progress in line with the improving housing market.

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Will digital printing be the next big thing?

November 10/17, 2014; Volume 28/Number 11

Industry slow to embrace advanced technology

By Jenna Lippin

Screen Shot 2014-11-18 at 3.11.44 PMDespite some companies’ success with the technology, laminate flooring manufacturers have yet to fully embrace digital printing. Some further education, testing and investments may lead to increased usage of digital printing in years to come, but for now many producers are admiring the process from afar.

“Currently digital printing doesn’t offer pure cost advantages, but what it does appear to offer is significantly higher quality printing and design flexibility,” noted Derek Welbourn, CEO of Inhaus, the North American marketing arm of global laminate manufacturer Classen. As of now, about 10% of Inhaus’ 1,000-plus SKUs is digitally printed.

“The challenge with the higher quality printing is that once the product is manufactured into a laminate with a wear layer overlay, the higher definition of the digital printing can become lost,” Welbourn explained. “However, there is a major advantage in design flexibility both in terms of investment and development speed. No longer is there an investment required in paper inventory and cylinders; once a digital print is developed it can be manufactured into finished flooring immediately.”

Germany-based Classen has invested heavily in multiple high-speed digital printers that have significant production capacity, Welbourn said. “We are just beginning to see the design and flexibility advantages. We are also exploring alternative finishes, which can take advantage of the higher resolution of the digital printing. We believe in digital print technology both in terms of design, flexibility and future cost reductions.”

Mannington has not yet commercialized digital printing on its laminate products, but the process does allow for creation of prototypes in a faster and more realistic format. “We can now simulate almost exactly how the product will look in the final form,” said Dan Natkin, senior director, residential products. Mannington currently uses digital printing in other flooring categories.

Like many other laminate manufacturers, Armstrong still uses the “old fashioned” method in laminate production, the rotogravure process. The company does, however, employ digital printing on its trim and molding. “It has been very successful because you can get an apples-to-apples look with the floor and trim, while before it was more of a coordination,” explained Sara Babinski, principal designer, laminate flooring. “That’s where we are dipping our toes into digital printing.”

Inhaus' Urban Loft
Inhaus’ Urban Loft

When it comes to digital printing benefits that laminate producers will acknowledge, advanced design and customer demand are high on the list. Travis Bass, executive vice president of sales and marketing for Kronotex USA, noted that digital printing “allows quick turnaround of high quality prints for customer approvals as well as shorter print runs to prepare actual finished product samples. Our benefit comes from the advantages [digital printing] gives the printers for trial products and better quality decors from our designers.”

Similarly, Babinski said being able to print on demand would be good in terms of supplying the customer, but also beneficial for the manufacturer as there would be less sitting inventory. She also cited print fidelity and custom design, which Welbourn also said has created a “significant advantage” for Inhaus.

“Another advantage is random designs with no repeating patterns,” he added. “You create a cylinder whenever you design a printed floor. With digital printing, because it’s data management, there is simply a picture used instead of a cylinder. The image is scanned and the printer can randomly select a chunk of data. You should have an infinite number of variations because the image will select, flip and mirror random parts. However, the challenge with digital printing is it is just too much data for a machine to crunch while still maintaining high print speed.”

Natkin had a similar assessment, noting that digital printing “allows for fewer plank repeats, creating a much more unique floor. [But] digital print is still far too slow and costly versus rotogravure printing in laminate.”

While digital printing for laminate for now is utilized by a select few, there is a belief that as the technology progresses it will become more mainstream, which in turn should positively affect costs related to the process, such as the price of ink.

“I think [digital printing] could potentially replace how laminate is manufactured today,” Babinksi said. “I don’t know how far out that would be. It would be a change of investment for different businesses that manufacture anything digitally printed.”

Expressing a similar sentiment, Natkin said, “As the cost continues to come down on digital print technology and equipment, it may eventually replace the printed décor paper.”

Welbourn noted that a big part of cost of producing laminate flooring is the price of the ink. “If a lot of people get involved and there is a bigger volume of ink flowing, the cost will come down and it can be a more competitive process.” That being said, Inhaus is refining the digital printing process and “moving to the next step.

“It never separates you from the pack for too long,” he continued. “The biggest advantage for the whole category is we are going to be able to create exciting designs and achieve design flexibility you haven’t seen. Laminate is quite good, and it is going to get even better.”

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Laminate: Despite challenges, still a relevant product category

November 10/17, 2014; Volume 28/Number 11

Screen Shot 2014-11-18 at 2.43.20 PMWhen discussing the laminate category, it is important to note which segment of the market is being addressed, as the differences are staggering.

At the low end, laminate flooring occupies a strong place in the DIY market. However, most of those products reside in the home centers and other big box stores. Most specialty flooring dealers aren’t making money in the low end; many have walked away or limited their assortment.

The middle? That segment has eroded the most in recent years and has virtually disappeared from the specialty retail market.

The high end is a bright spot for manufacturers selling to customers who can afford that price range. “The upper end is looking healthy and has gained more acceptance—even by builders—because of the realistic looks and beveled edges,” said Pat Theis, vice president of sales and marketing at Herregan Distributors. “We have seen growth in the upper end with Quick-Step and Mannington. We feel good about the future of our laminate business as these manufacturers continue to come to market with great style and design.”

Drew Mittelstaedt, partner at Longust Distributing in Mesa, Ariz., said that while the laminate category has cooled in recent years, it remains a relevant segment. “We continue to do reasonably well at the high end. I sure don’t see it going away.”

Most distributors contacted by FCNews acknowledged that while their laminate business is holding its own, it has not seen the lift of other categories. Consequently, more of the emphasis has been placed on LVT, hardwood and tile offerings.

Still, laminate has its fans, among them Jeff Striegel, president of Elias-Wilf in Owings Mills, Md., who contends that the top end of the market has “reinvigorated” the business. “Also, increases in the prices of hardwood flooring and the presence of thicker laminate (12 mil and better) have led the way for laminate to go into the builder market for the first time in recent memory,” he said. “Several major builders have 12 mil laminate as part of their offering.”

The fact that laminate is being specified in some builder markets is an encouraging sign, but the reality is laminate is still the category most likely to suffer in an environment in which LVT and, to a lesser extent, hardwood flooring are flourishing. “Laminate doesn’t have the upside of wood and LVT, and there is continuing price pressure on laminate,” Striegel said. “But we have seen some of the most realistic wood visuals in laminate. Still, it is a category that has struggled.”

In light of its slowdown, many distributors have decreased their percentage in laminate in recent years. Some have said that laminate pricing vs. imports has made the business especially difficult for domestic producers.

Other distributors said they have found success with private-label lines, where they have been able to source some high-style products at very competitive price points in the high middle to upper end of the market.

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New wrinkles enhance locking systems

September 15/22, 2014; Volume 28/Number 7

By Ken Ryan

Screen Shot 2014-09-24 at 11.42.36 AMSpecialty retailers often cite ease of installation as one of the major benefits of laminate floors, particularly in comparison to other types of products. Indeed, the innovation of locking systems over the past decade has greatly simplified the installation process, allowing these floors to be used immediately, without the need for cleanup.

“Locking systems are a critical item,” said Derek Welbourn, CEO of Inhaus, the North American arm of global conglomerate Classen. “If you don’t have a very good locking system, people aren’t going to use your product. At the very least you need a good locking system today, and the fact is most everyone has one, which has leveled the playing field.”

Following is an update on the latest advancements in laminate locking systems.

Uniclic

Unilin’s patented Uniclic glueless installation locking system helped transform the laminate flooring industry in 1997. Prior to Uniclic, all laminate flooring required planks to be glued down during installation.

Roger Farabee, senior vice president of marketing for Unilin, said flooring dealers are building their laminate programs around products that use the Uniclic system. “Retailers are able to emphasize Uniclic as an advantageous selling point when talking with customers. The Uniclic joint consistently performs better on standing water and pre-tension strength tests than other laminate, which results in Mohawk, Quick-Step and Columbia having one of the lowest claims rates in the industry.”

With Uniclic, planks click into each other to form a solid, lasting connection that also provides superior water resistance between planks.

Farabee said another advantage is Uniclic allows Quick-Step planks to click together using one of two methods: an angle-in or flat installation. “The dual-installation options of Uniclic are important because real-life installations will almost always involve installing flooring in some type of trapped situation (i.e., under a door jamb, toe kick or recession/undercut such as a fireplace), and Uniclic provides that flexibility.”

Bill Renner, installation manager for Unilin, said Quick-Step floors with the Uniclic locking profile are also easy to repair using UniFix, a tool that makes removal of a single plank or replacement of a damaged section easier and more time efficient.

Välinge 5G

Laetitia Kimblad, business unit director of surface technology for Välinge, said since 2000, locking systems that utilize angling/angling as well as angling/snap installation have progressively been replaced by the fast and easy single-action installation method, such as that offered by Välinge’s 5G locking systems.Screen Shot 2014-09-24 at 2.39.47 PM

Kimblad called 5G “the easiest, fastest and most robust way to install laminate flooring.” The panels are installed in a single movement by angling the long side and folding the panel down. A flexible and displaceable glass-fiber reinforced polymer tongue secures the installation, locking the product vertically and providing a visible and audible feedback when folding down the panel. As of today, Välinge counts over 80 5G licensees worldwide, and more than 700 million square meters of flooring with 5G/fold down systems have been installed since the product was first launched in 2005.

“The simplicity of the 5G laminate locking system presents great advantages for installers as well as for DIY consumers,” Kimblad said. “5G reduces the risk of accidentally damaging products during installation as this could happen earlier on panel edges when snapping boards together. It also decreases the risk of gap openings and height differences that may occur on panels equipped with other locking systems.”

Välinge has also developed an optimized 5G tongue, which offers high locking strength and easy installation for thin laminate flooring down to 6mm.

Inhaus

Megaloc is Inhaus’ fold-down locking system for laminate flooring installation. The system features an interlock clip (a PET plastic insert) that, once locked into position, prevents the short ends of the planks from lifting after installation.

The advantage of Megaloc, which is used on all Inhaus laminate products, is its ability to be manufactured efficiently in a highly automated process in products as thick as 7mm. “We work on this all the time,” Welbourn said. “We have all the equipment in our factory that tests joint strengths, and we are tweaking the locking system all the time. Sometimes it leads to a breakthrough.”

Screen Shot 2014-09-24 at 2.39.38 PMAlthough new to the industry, the Megaloc system is now being used by some of the industry-leading LVT companies. “It makes sense as it improves the joint holding strength and improves ease of installation,” Welbourn said.

Newcomers

Innovations4Flooring, a new technology company that markets two types of locking systems—called TripleLock and Click4U—said it has received 11 license agreements since entering the market in June.

TripleLock and Click4U use a drop-lock installation technique for flooring panels, eliminating the need for an additional insert on the short side. This omission gives manufacturers the ability to improve productivity levels as well as reduce their costs and carbon footprint, according to John Rietveldt, CEO of Innovations4Flooring.

Several international patent applications have been filed for both products. “With some important patents soon to expire, our drop lock, one piece offers the industry a faster, more cost-effective way to manufacture environmentally friendly solutions in a sustainable way,” Rietveldt said. “And in a highly competitive market, the introduction of a drop-lock solution on the short side means that installation for end users is significantly facilitated.”

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ITC orders seizure of laminate flooring that infringes on Unilin patents

Screen Shot 2014-09-18 at 12.07.36 PMDallas — Seizure and Forfeiture Orders were issued by the U.S. International Trade Commission (ITC) against multiple companies attempting to import containers of laminate flooring that infringe upon Unilin’s glueless locking patents. The offending companies were first warned of Unilin’s General Exclusion Order prohibiting the import of infringing laminate flooring.  Nevertheless, because they chose to ignore those warnings, the ITC issued Seizure and Forfeiture Orders empowering the US Customs Office to seize all infringing products imported into the United States.

In March 2014, Unilin filed several patent infringement suits in federal district court in California against multiple companies and individuals that are active in the importation and distribution of unlicensed glueless laminate plank flooring. The suits were filed to collect money owed to Unilin for past infringement.

Some years ago, Unilin also put in place its “L2C” holographic label program to support its licensees. The L2C program requires Chinese licensees of Unilin and Välinge to attach a unique holographic label to each box of licensed product. The L2C label allows Unilin and Customs to easily identify unlicensed products from those licensed for importation. Unilin said the program would be extended to additional countries shortly as more licensees and buyers value the L2C labels.

Companies have tried to avoid the ITC General Exclusion Order by using counterfeit labels, according to Unilin. Products using counterfeit L2C labels, however, will also be seized and destroyed by Customs.

Christine Walmsley-Scott, legal counsel of Unilin’s IP division, said: “Products with counterfeit labels not only infringe on Unilin’s glueless locking patents, but also infringe on Unilin’s trademarks and copyrights. We are closely working with U.S. Customs Officials and with our attorneys to have such counterfeit products seized. We are therefore advising all buyers and retailers of Chinese glueless locking flooring products to get guarantees from their suppliers that the holographic L2C labels applied to their products are genuine as provided to them by Unilin representatives.”

The companies caught attempting to import patent infringing products, and against whom Seizure and Forfeiture Orders have been issued, include the following:

  • All American Hardwood Inc, Ontario, Calif.
  • Hawk Wood Flooring Inc., Walnut, Calif.
  • S&S Hardwood Floor Supply, Los Angeles
  • Woody & Lamy Floor Inc., Santa Fe Springs, Calif.
  • Home Floor Inc., Temple City, Calif.
  • Harmanto DBA Maximus Flooring, San Marino, Calif.
  • Lucky Step Inc, City of Industry, Calif.
  • Linco Enterprises Inc., Ontario, Calif.
  • Overseas Chinese Cultural Association, Temple City, Calif.
  • Topstar Flooring LLC, Rosemead, Calif.
  • Smartwood Flooring Inc., City of Industry, Calif.
  • Christina & Son Inc. DBA KC Industries Co, San Marino, Calif.

 

 

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American Concepts Laminate debuts for specialty dealers

Volume 28/Number 3; July 21/28, 2014

Kronotex USA rolls out the ‘best of the best’

By Steven Feldman

Screen Shot 2014-07-29 at 9.22.19 AM

Barnwell, S.C.—Kronotex USA, a division of one of the world’s largest producers of laminate flooring, is rolling out the American Concepts brand for the North American marketplace. The program consolidates the company’s entire lineup of branded products, which was formerly marketed under the Kronotex and Formica brands.

American Concepts, a 57-SKU collection featuring the company’s “best of the best” wood visuals, was developed through extensive consumer research. That research included everything from the name to the logo to the products themselves. The goal was to give independent flooring retailers a brand and collection that would resonate with the target audience of female consumers, ages 35 to 55. In other words, provide retailers with an easily sellable line where they could make a respectable margin. Moreover, American Concepts is not being made available to the big boxes or other mega-retailers, preventing the line from being shopped.

The process began about a year ago by asking more than 1,000 consumers what they value in a laminate floor. Research revealed that American-made product is a purchase driver for emotional reasons, but that was just the beginning. “We found ‘made in America’ equates to quality and safety,” said Mike Fox, founder of the Mullingar Group, which conducted the research. “Many products made overseas don’t have the same safeguards as American Concepts as it relates to VOCs and the construction of the product itself. Where it is made determines how well it is made.”

Consumers also said sustainability is important. “At the top of the list was landfill issues and sustainable forest management,” Fox said.

So, at the end of the day, Kronotex USA opted to create a line that would give specialty flooring retailers’ customers everything they would want in a laminate. “Retailers should generate more sales if they give women everything they want— American quality, made in America, healthier for the home and planet—all in one brand,” said Barbara June, marketing director.

Travis Bass, executive vice president of sales and marketing, summed it up: “A U.S. producer that has quality product, stands behind it, services from here, and offers design that reflects women’s definition of American style. That’s the story behind American Concepts.”

And, with that, the move from the Formica brand was enacted in order to expand the value proposition. “In 2005, we were trying to pick a name that would help retailers,” said Fred Giuggio, vice president of brands for Kronotex USA. “We found Formica stood for durability, and that was an important story nine years ago. But, today, durability is no longer a question for laminate; it is a category benefit. The Formica name was chosen because of something [that resonated with consumers] in the past. It is now time to be looking at future trends. American Concepts is built around our next generation of buyers.”

Jeff Hamar, president of Galleher Corp., a Santa Fe Springs, Calif., distributor of Kronotex laminate, said the coupling of a brand switch and new products featuring aggressive price points and new looks could prove compelling to dealers and their customers.

“Branding it ‘American Concepts’ is probably smart because there seems to be consumer interest—at least in some segments—in buying American products,” Hamar said. “And while there is no real brand recognition for laminate these days—not since Pergo—when consumers walk into a store and see a nice, fresh display with the name American Concepts, you can have some success if you’re a retailer. You just have to make sure they walk the customer over to the display.”

Product features and benefits

American Concepts will be positioned as a value-priced product that boasts quality, the latest design and all the components of the value equation. The American Concepts display, which is a retrofitted Screen Shot 2014-07-29 at 9.39.54 AMFormica rack with new graphics and the updated SKU designs, will attract consumers’ attention from anywhere in the showroom given its red, white and blue Americana logo. “There are lots of positive feelings about supporting American-made products,” Bass said. “Seventy-eight percent of women would rather buy an American product. Sixty percent said they would buy American at a higher price.”

He added that the American Concepts line is a better grouping than what was offered under the Formica moniker. “When we serviced Formica, we also were servicing Kronotex USA and a non-branded line. What we did through American Concepts was eliminate 160 SKUs and come up with what we believe are 57 winners. We took the best performers from the former three lines and enhanced them with some new designs. This is our all-star lineup.”

Coming up with the products that would eventually make the cut was an arduous task. The company needed to ensure the specialty retailer had something to sell at every price point, from the basic, 7mm, square edge, meat and potato products all the way through the 12mm, embossed-in-register, handscraped products with a four-sided bevel and attached pad. The collection can retail for anywhere from $0.79 to $2.99 a square foot. And, the line is flexible. “We will be tracking the performance of designs,” Bass said. “We will constantly be refreshing our product assortment.”

The initial lineup:

•Liberty: 7mm, square edge; six SKUs

•Stone Harbor: 8mm, square edge; nine SKUs

•Dalton Ridge: 8mm, beveled edge; 16 SKUs

•Middlebrooke: 10mm square edge with attached pad; seven SKUs

•Sanderlin Mountain: 10mm, beveled edge with attached pad; five SKUs

•Berkeley Lane: 12mm, beveled edge; eight SKUs

•Valley Forge: 12mm, beveled edge with attached pad; six SKUs

“Kronotex has used this opportunity to refresh the line in a powerful way,” Hamar said. “It is very contemporary with the looks that are hot today.”

The launch of American Concepts illustrates Kronotex USA’s commitment to the North American market, particularly the independent retail channel, which has been under fire after witnessing its share of the laminate market drop to between 30% and 35%. According to Bass, there is still opportunity here. “There is no capacity left on the street with high-end laminate items. We have to source product ourselves from time to time, and that is after a $45 million investment in added capacity. We could double our capacity in high-end items and not miss a beat. The category is dying? We have all we can say grace over.”

Being a division of Kronotex USA offers a number of advantages few competitors can boast. For starters, it makes laminate—and only laminate. “We are like the Navy Seals,” Bass said. “When you do one thing you do it the best.”

Kronotex USA also offers the financial backing that many Chinese importers lack and, as such, the confidence instilled in retailers. “When you are the world leader in size, you are going to be the world leader in quality manufacturing,” Bass said. “The financial backing of Kronotex allows us to have the most state-of-the-art equipment, reliable distribution from a central location, world class R&D, and it allows us to continually invest in the business.”

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Laminate: Global markets offer advantages, obstacles

June 9/16, 2014; Volume 27/Number 29

By Ken Ryan

Screen Shot 2014-07-10 at 10.37.33 AMWhile laminate flooring at the lower and middle price ranges today is largely the domain of home centers, suppliers that can bring stylish higher-end products and upgrades to the market can still make money for their retail partners, flooring professionals say.

Indeed, the importance of selling quality laminate flooring is essential to ensuring customer satisfaction, repeat buyers, minimal returns and increased profits.

“The reputation of the company you are dealing with is really the key factor for the retailer,” said Bill Dearing, president of the North American Laminate Flooring Association (NALFA).

Whether the product comes from the U.S., Europe or China, it brings with it certain advantages and obstacles.

While the trend is toward more domestic sourcing and manufacturing across all flooring categories, including laminate, Europe and China offer advantages as well.

 

Domestic

The advantages U.S. suppliers enjoy is rather obvious: proximity to market, lower transport costs and shorter lead times. These are major benefits as retailers often cannot accurately predict demand, or whether they will need product quickly. In this sense, both Europe and China are at a disadvantage in time-to-market response when selling products in the U.S.; one way to compensate is carrying significantly more inventory than their U.S. counterparts, but that can be costly.

Manufacturers point to three core advantages to sourcing domestically: style/design, service and quality. Mannington, for example, uses local designers who can devote large amounts of time to researching home fashion trends specific to the North American market and then design the products with that consumer in mind.

The ability to deliver product on a timely basis is where domestic production wins. “When we go out of stock on a pattern, we can generally turn it around in days, not the months you have to wait while it goes through production and then sits on a boat coming across the ocean,” said Dan Natkin, director of hardwood and laminate products for Mannington.

Quality control is another potential game-changer for domestic suppliers. China has no third-party organization that oversees the quality control of laminate products the way NALFA and Europe’s EPLF do. For example, to bear the NALFA seal, laminate floors must pass 10 performance tests that evaluate water resistance, exposure to light, stains and whether a floor can be damaged when a large object is dropped on it or a castor chair comes in contact with the floor.

“All of our laminate products are certified to the NALFA standard,” Natkin noted.

There are seven other regular members of NALFA: Columbia Flooring, Kronotex USA, Mohawk, Pergo, Quick-Step, Shaw Industries and Torlys.

 

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Laminate technology emanated from Europe, which it is still viewed by some as the technology epicenter. “The leaders in technology remain in Europe, as they were first in the business,” said Derek Welbourn, CEO of Inhaus, the North American marketing arm of global laminate manufacturer Classen.

Market share for laminate flooring in Europe exceeds 14% of total flooring sales compared to approximately 5% in North America. Furthermore, there is a large volume of major manufacturers in Europe, and the companies that have stayed in business have invested heavily in capital equipment to remain competitive against their peers.

“In our case with Classen, we have invested hundreds of millions of Euro and continue to invest annually in new capital equipment,” Welbourn said. “Improvements in [productivity], design and flexibility—the ability to offer a greater range of products without curbing efficiency—drive our investments.”

Welbourn said North American companies have invested less than their European counterparts and entered the business at a later date, meaning it didn’t make financial sense for them to invest heavily like European laminate companies. “The manufacturing equipment in North America for laminate flooring is efficient but not at the same level of automation and scale that is done in Europe. As an example, the Classen factory, just outside of Berlin, has a theoretical capacity of over 1 billion square feet per annum following our latest expansion. This means we would need between 85% to 95% market share to sell out the factory in North America.”

Executives said Europe has traditionally focused more on production costs than design. But that is changing, Welbourn noted, as innovation in technology such as embossed in register and digital printing make smaller and more efficient production runs possible.

According to Welbourn, it is still a major investment to create a new design, estimating the cost of print cylinders, paper, press plates and inventory at roughly €100,000 ($135,860). “Digital printing has the possibility to change this, but it has not become mainstream yet.”

In the meantime, the laminate industry globally is evolving into a more design savvy field. Pastels and oiled surfaces that were already popular in Europe are now also in demand in the U.S.

 

China

Chinese manufacturers are generally one to two years behind American and European trends as Asian companies “wait to see which designs will work in their market—frequently by copying our products,” Natkin explained.

Screen Shot 2014-07-10 at 10.46.57 AMChina is well known for being adept at copying things quickly, and product design is no exception. “And with excellent designers available to hire as outside developers, good designs are being made available in China,” Welbourn said.

Chinafloors, which was was founded in 2004 as a Belgian-Taiwanese joint venture based in Shanghai, has since grown into a flooring innovator.

Thomas Baert, co-owner of Chinafloors, said perceptions of China as a producer of cheap product still exist. But, according to Baert, that view is antiquated. “The reality is China has become a leader in specialty and innovative products and product development,” he said. “It is also a reality that we now see manufacturers in other leading countries copying the product ideas and product initiatives coming out of China.”

China does, in fact, have a major labor advantage over the U.S. and Europe (a vast population hired at cheaper labor rates), but a disadvantage in the lack of sophisticated equipment available in the market.

Dearing said there are some large distributors that purchase a great deal of Asian laminate from reputable vendors. “These distributors know their way around and they know what to buy,” he said. If a flooring dealer engages with a Chinese supplier to buy containers, Dearing noted that the margin “better be good, because what happens if something goes wrong?”

NALFA has always advised dealers to know their sources, Dearing said, making sure they are reputable to the point where they will be accountable if something goes wrong. “In this game you are playing with a lot of money; therefore, it is probably a better idea to deal locally, where you have a real sense of what the product is.”

Natkin added, “When and if there is an issue with a product, we stand behind the product and you know who to call. Can you say the same about an imported product?”

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State of the industry: Laminate holds its own at the sweet spot

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Volume 27/Number 21; March 3/10, 2014

By Jenna Lippin

The expression “no news is good news” proves to be true when considering the laminate flooring market in 2013. The consensus among industry executives suggests the category posted low single-digit increases in both dollars and square footage, contradicting the sentiment on the part of some that laminate is about to be placed on the endangered product list.

Thanks to improvement in the U.S. housing market, refreshed product design and rising hardwood prices, laminate is firmly holding its place in the market. “There’s been a revitalization of the category,” said Dan Natkin, Mannington’s director of hardwood and laminate. “We’re doing things with visuals that we weren’t doing five to 10 years ago. Also, price increases in hardwood have helped create a spread between upper-end laminates and low-end woods. From my own experience, from retail or builder, you can get entry-level oak or a nice laminate at one price, and on the showroom floor people are choosing laminate.” Continue reading State of the industry: Laminate holds its own at the sweet spot