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Dealers get creative in their positioning

FCNews Ultimate Guide to WPC: July 17/24, 2017

By Ken Ryan

 

Screen Shot 2017-07-31 at 9.44.50 AMFlooring retailers often talk about the persuasive effect a good story has on selling a product. With WPC/rigid core, they not only have a good story to tell, they have a means to demonstrate its waterproof properties.

As the product category evolves, the way flooring dealers treat these products in their stores will change accordingly. Most certainly they will add more space. That is already occurring at Independent Carpet One Floor & Home in Westland, Mich., which has transformed its showroom into a large selection of WPC and rigid core products.

“We’ve installed a number of products on our floor to present the many different directions a client can present in her home,” said Cathy Buchanan, owner. “Customers need to see, feel and hear the many different applications. It is a selling feature for sure.”

Most consumers who walk into a retail showroom these days know very little about WPC or rigid core. But that hardly matters, according to Nick Freadreacea, president of The Flooring Gallery in Louisville, Ky., who said most customers come in looking for hardwood anyway. It is during the ensuing conversation that customers are eventually brought to the LVT/WPC/rigid core area where they can witness the waterproof properties that have made these products so popular.

Still, it’s not as though WPC/rigid core sells itself. To be successful, retailers need to articulate the differences, and that is not always easy. “What is getting a little confusing is how to separate the WPC category and rigid core category,” said Sean O’Rourke, vice president of hard surfaces at Avalon Flooring, Cherry Hill, N.J. “Manufacturers are keen to distinguish between the two categories, touting advantages of one over the other but it may not be as easy on the showroom floor.”

How to position
Marjorie Benson, owner of Friendly Floors in Port Charlotte, Fla., positions WPC as the waterproof alternative to laminate. “The waterproof factor is the key,” she said. “Since the majority of our customers are middle-aged or older, [they] are concerned about water from their swimming pools, washing machines, dishwashers, pets, and increasingly from aging in place, making spills is another factor in their floor buying decisions. Physically, it’s positioned next to the laminate in the showroom.”

Montgomery’s CarpetsPlus in Venice, Fla., has installed several 8 x 8 sections in its laminate and LVP sections to showcase WPC/rigid core in a better light. “We actually have it installed next to higher-end laminate sections as well to show the consumer how far LVP has come as far as look/durability,” said Mike Montgomery, co-owner.

Flooring America OKC in Oklahoma City, meanwhile, displays its WPC/rigid core brands with its hardwood collections. “Doing so expands the size and scope of our hardwood department and allows the client to introduce herself to WPC without being referred to as vinyl,” said Bobby Merideth, president and director of business development. “It also exemplifies the realism of the WPC products when placed next to hardwood.”

Many dealers have created separate sections for their WPC products so customers can see how great they look on the floor. Steve Lipp, owner/manager of Carpet One Fort Wayne in Indiana, said there’s no better way to present the product than to have it installed on the showroom floor. “We have it in front of two wing displays. When we take customers to that section and explain the nuts and bolts of [COREtec] the unmatched colors and styling takes over and the product then sells itself.”

R.C. Willey Home Furnishings, with 13 locations in four Western states, relies on the manufacturers’ merchandising displays. As Eric Mondragon, hard surface buyer, explained, “For me this alone sets it apart from other hard surface products on my showroom floor. [For example,] my laminate and wood programs are all displayed in a universal generic type stacker display centered in pods in the middle of the showroom; the WPC products are wall units that surround the laminate and wood stackers.”

Clearly, there is no one way—or right way—to display these products. Whether installed on the floor, displayed in a wall unit, dropped into a fish tank, or placed in a wing tip rack or elsewhere, the key is to display it prominently in the store.

One issue flooring dealers are facing these days is how many collections to carry. Just as there is no concrete way to merchandise the category, there is no right or wrong answer to how many selections are enough. “I believe it’s not how many you carry but who you carry,” Mondragon said.

 

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Interview: Piet Dossche, the ‘father of WPC,’ mulls the evolving composite core landscape

FCNews Ultimate Guide to WPC: July 17/24, 2017

 

Screen Shot 2017-07-31 at 9.42.32 AMIn the mid-1990s, Pergo paved the way for a brand new category—laminate flooring—in the U.S. market. Initially, the category generated a lot of buzz and excitement (and perhaps some overzealous product claims) before experiencing a fairly rapid shakeout of players. During that same decade, other innovators such as Anderson and Mannington introduced the industry to rustic and hand-scraped floors. Not too long after that, virtually every hardwood flooring manufacturer had some variation of scraped or distressed product in their offerings.

Fast-forward to 2013, when USFloors broke new ground with the creation of an entirely new category of flooring, WPC, which is based on composite core technology. In the few years since the launch, the WPC category has caught the attention of retailers and distributors alike. More importantly, it has seized a greater share of dealers’ showrooms, nipping sales from competing hard surface categories. At the same time, recent iterations within the WPC category have spawned the creation of exciting new products that stand to impact the overall composite core sector in many ways.

FCNews managing editor Reginald Tucker recently sat down with Piet Dossche, CEO of USFloors, to hear his assessment on how WPC has evolved since the initial launch and where the market is headed.

What are some of the main advantages of WPC vs. other composite core products such as rigid core?
There’s a lot of confusion in the market regarding where WPC and rigid core boards (RCB) fit. In my mind it is very clear, one category is not better than the other; they both complement each other. The analogy I use when I try to explain the differences between WPC and RCB is carpet. Most people know what carpet is all about, and most people know the difference between level loop commercial carpet vs. cut pile/saxony/plush type of carpet. I take a piece of 10-gauge level loop in one hand and a 40-ounce saxony carpet in the other hand. The 10-gauge level loop is my RCB product, and the 40-ounce saxony is my WPC product. Both products are made for certain purposes. Carpet 10-gauge level loop is not made for comfort; it is designed for performance. It’s a tight, dense construction that provides durability. The 40-ounce saxony, on the other hand, is a cut pile and has a more open construction. It’s plush, warm, soft and comfortable—you can really lie down and live on that floor. You wouldn’t really lie down on a 10-gauge level loop product.

You can make exactly the same comparison between WPC and RCB. With a rigid core construction, you have a very dense, tightly packed core with a high percentage of minerals and calcium carbonate in the formulation. It’s made more for performance as opposed to comfort. It’s designed for applications where indentation resistance is the most important factor.

With WPC, on the other hand, there is a foaming agent in the formulation, which creates air pockets within the core during the extrusion process. Inherently, these air pockets act as insulators for both sound and temperature, providing a higher level of comfort for the consumer. For example, if you have a customer who operates a hair salon, she needs a product designed to withstand heavy foot traffic—most likely high heels. That floor also has to be waterproof and resistant to chemicals. From a performance point of view, the RCB product will best fulfill the requirements in this situation.

But for the homeowner/housewife with an active lifestyle—kids, pets, etc.—she will want something that’s more comfortable, warmer and sound dampening like WPC. It will perform very well under these conditions, be waterproof in case of a spill and provide the level of comfort she is looking for.

Both products are perfect examples of how this composite core category has evolved since USFloors launched its COREtec collection about four years ago. WPC started and basically took hold of the market, then RCB came into the picture. I look at RCB as an extension of the solid LVT 3.2mm/4mm click LVT. In the end, I see these products complementing each other and helping to build the overall composite core category. WPC was just the start and RCB followed. Without a doubt you are going to see many products that follow on that path.

Do the various construction methods involved in WPC and RCB production factor into the final cost of the respective products?
Yes. For example, WPC with an LVT top layer is a more complicated product to make. It requires more capital investment. First you have to extrude the WPC coreboard. Then you have to create your LVT top layer (usually 1.5mm) through a calendaring process. A print film and wear layer are consequently pressed onto this LVT base. This slab then goes through an annealing process, which “shocks” the product to create the stability required. This top layer and WPC extruded core are pressed together and depending on the product, an attached underlayment is glued on the back (cork or another material) before the board is cut into planks or tiles and profiled with a click system. Several processes, steps and various pieces of equipment are required to make a WPC product.

By comparison, RCB, for the most part, entails a one-step process. The core, which is extruded with a high-density format, is fused with a print film (decorative layer) and wear layer before again being cut into planks or tiles and profiled with a click locking system. It’s a much less capital-intensive process.

So it sounds like there is a lower barrier to entry with respect to RCB-type products.
Yes, the RCB manufacturing method has resulted in many companies in China jumping on that wagon. Due to the issues with formaldehyde in some Chinese laminate products over the past few years, many Chinese laminate manufacturers were left standing with all this manufacturing profiling equipment. They saw their business dwindle because of the reduction in orders from the U.S. Making WPC was too expensive a process for some of these manufacturers. But when rigid core products were introduced into the composite core segment, it provided a very simple process for manufacturers who did not want to make the capital investment required to produce WPC. For many of those former laminate manufacturers in China, it made for a very easy entry into the RCB category. And because it’s a cheaper product to make, it usually sells for less money than WPC at the retail level.

Does this lower cost structure give some companies advantages over others?
Sure, in an effort to get some traction in the market, many of these newcomers revert to lowering their prices to sell their products. It’s one thing to price it lower, but it’s quite another to import the product and distribute it. Only the professional companies who can properly bring the product to the market and service the channels efficiently will be successful.

Looking through your crystal ball, how do you see rigid core’s market share growing as a piece of the overall composite core pie?
Right now RCB is still in its infancy, although it is being introduced into the market at a fast and furious pace. However, WPC has had a four- or five-year head start and it’s still growing strong. There’s no doubt about the popularity of the RCB category. Here at USFloors we are also coming out with a COREtec rigid core construction, because we don’t see it as a cannibalization of WPC. Rather, we view RCB as a complementary item that’s needed in our lineup. My sincere hope is the rigid core market becomes as big as it can, which can help to grow the category overall. Could it become as large as 50% of the total composite core category? Who knows. But even in that case, I don’t necessarily see it as WPC giving up half its market share to the rigid core category. As the market continues to grow, and when the dust eventually settles, it will transition to a more normal growth track compared to the high, double-digit growth curve we’re seeing today. Over the next three to five years, when all this stabilizes, I predict the composite core market will probably be three to four times as big as it is today. By then I expect rigid core will have taken a sizable market share next to WPC. With RCB construction more focused on commercial applications and WPC more residential, the residential share will be larger than the commercial volumes. Who knows—in three years’ time there could be three or four different composite core constructions on the market.

Speaking of the ongoing evolution of the composite core category, what are your thoughts about some of the early iterations we’re seeing?
It just confirms what I’ve been saying. We’re only on the cusp of innovation. These products are brand new in the market, and I believe they will be successful if they bring a solution that previous versions did not provide. But if we begin to see new products that are merely a gimmick, or a change in the core or construction just for the sake of change, then they’ll face an uphill battle. But if these new products are bringing certain advantages over existing constructions, then they will be successful.

What’s the next step for USFloors?
We are in the midst of commissioning our first WPC/COREtec plant at the state-of-the-art Shaw facility in Ringgold, Ga. We started up production in the last two weeks and we’re already making product. We are the innovator and leader in this category and are committed to remain in this position. We’re very excited about the future; the best is yet to come. Stay tuned!

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Distributors rally around WPC, rigid core

FCNews Ultimate Guide to WPC: July 17/24, 2017

By Ken Ryan

 

Screen Shot 2017-07-31 at 9.38.54 AMFlooring distributors have seen hot product categories before. In 1994, Pergo laminate flooring was introduced to the U.S. market and soon the category was ablaze. Alas, while laminate zoomed in the retail channel it never cracked builder or commercial in a meaningful way due to inherent limitations and perhaps a little overselling of its purported performance attributes.

“It went from zero to $1 billion quick, but laminate was a one-trick pony,” recalled Jeff Striegel, president of Elias Wilf, a top 20 flooring distributor.

Enter LVT and its offspring WPC/rigid core. This category has taken off like a rocket and shows no signs of slowing down. In this case, this waterproof product segment is different than laminate—and it has multiple applications. “The growth curve of this category is like nothing the industry has ever seen,” Striegel said. “Most new products have a primary usage in a given channel. Not LVT/WPC. WPC is terrific off the hook for multifamily, contract and residential. It hits on all cylinders in every category, and it is waterproof. It’s not just a good product—it is a great product.”

In a fairly slow-growth market following the great recession, distributors have latched onto this waterproof segment as a flooring savior of sorts. Many top 20 distributors have created a separate category for LVT/WPC apart from resilient. Jaeckle Distributors, for instance, places WPC, rigid core and traditional luxury vinyl products under the LVT umbrella. “I do think LVT, WPC and rigid will all have a place in the market long term,” said Jeff Jaeckle, vice president. “It’s hard to be precise about the share each will have, but directionally I think it will go like this: WPC has already cut into the share of LVT and I believe rigid will take share from both WPC and LVT. While rigid will take share from WPC and LVT, I don’t think it necessarily translates into a decline of WPC’s overall business because WPC should more than make up for it in what it continues to take from LVT and other product categories.”

Herregan Distributors has been bullish on LVT/WPC with more than one-third of its business now devoted to the category. Other top-tier distributors are all in double digits, percentage-wise, in terms of product mix; those numbers are expected to rise.

As with laminate, there is a fear among some distributors that price erosion will impact this category and could theoretically turn this into a commodity much like other segments. Pat Theis, vice president of sales and marketing for Herregan, is concerned. “Because of the number of suppliers in the WPC market, prices are getting downward pressure. There is a lot of misinformation and misrepresentation in this category, so being able to speak intelligently about your product vs. the competition is key to helping customers understand the value of the product.”

What’s fundamentally different about WPC/rigid core from laminate, some say, is the latter has uses in virtually every residential and commercial application. “I think the massive marketing behind WPC/rigid core will continue to provide lift for these products,” said Scott Rozmus, president of FlorStar Sales. “The people I talk to view WPC/rigid core as a subset of LVT, so in a sense the success of such products lends credibility to the overall LVT category, which will continue to grow.”

 

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‘Waterproof’ flooring category creates watershed moment

FCNews Ultimate Guide to WPC: July 17/24, 2017

By Ken Ryan

 

Screen Shot 2017-07-31 at 9.36.56 AMNot so long ago the terms rigid core and multilayer flooring, and the acronym WPC would have had even the most astute flooring retailers scratching their heads. Today, these subsegments of luxury vinyl tile have created new revenue streams for dealers.

According to FCNews research, LVT, WPC and rigid core products made up more than half the dollars generated by the resilient flooring category in 2016, capturing 48.1% and 19.5% of the sector, respectively.

The features and benefits of WPC/rigid core (many are waterproof, kid proof and pet proof, to name the most common attributes) are hard to dispute. Durability, ease of maintenance and eye-catching visuals are other differentiating factors.

With WPC/rigid core exploding, and with new players entering the market, some voiced concern there isn’t enough separation among the competing players. “The products are quite similar even though everyone says theirs is the greatest,” said Greg Loeffler, vice president of sales and marketing, Pierce Flooring/Carpet Mill outlets in Montana. “The fact is most are coming from a handful of factories in China and the differences are minimal.”

There are 20 suppliers featured in this guide that would beg to differ with that comment. These companies, ranging from WPC pioneer USFloors to newcomers like Southwind, present a compelling argument for unique differentiation that goes beyond slick marketing. For example, Armstrong Flooring is marketing its Pryzm product as a brand new category of high-performance flooring.

Despite the newness of the category, some companies are already touting their new offerings as “not another me-too” product. Case in point is Wellmade, which asserts that its patent-pending, high-density plastic composite (HDPC) core structure outperforms existing rigid core products at higher temperatures and overall environmental extremes.

As so many new suppliers are entering the fray, they face the challenge of securing showroom space in an already crowded market. For companies like Quick-Step, its path to entry is a little easier since first making a name for itself in laminate and later in hardwood floors. Quick-Step is launching 16 SKUs with its luxury vinyl flooring (LVF) line.

And then there is the first-mover advantage enjoyed by USFloors, which introduced its first COREtec line at Surfaces in 2013. Three patents, 11 collections and 200 SKUs later, USFloors continues to blaze a trail with its COREtec family of products.

On the following pages, readers will learn more about WPC and rigid core, and how they are constructed. WPC, in essence, features a composite core construction with a foaming agent to create air pockets in the core that function as a heat and sound insulator to maximize comfort underfoot. WPC is resistant to indentations, thus making it suitable for residential and light commercial applications. WPC floors are dimensionally stable under moderate exposure to sunlight/heat. It has been called the ultimate product for residential environments, especially well equipped for active households. WPC can be installed directly over imperfect subfloors or ceramic tiles and comes with built-in sound abatement properties.

Meanwhile, rigid core is made of a composite core construction and is widely considered to be a step up from solid LVT. Rigid core contains higher filler content and higher density without any foaming agent, thus creating air bubbles in the core; the result is a thinner, harder and stiffer plank. Rigid core is primarily suitable where higher indentation resistance is required and where extensive exposure to sunlight/heat can occur. Rigid core works in commercial applications in which performance is demanded. It is relatively forgiving over imperfect subfloors.

Floor Covering News’ WPC Guide is designed to highlight the latest and greatest from some of the industry’s major players. This special issue is intended to provide information retailers can use when customers walk into their stores seeking a particular product. Each manufacturer that chose to participate in this guide were asked to submit photos and descriptions of their newest respective offerings or top sellers. Consider this guide your one-stop shop for all things waterproof in the still evolving WPC/rigid core marketplace.

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Resilient: The next evolution of Stainmaster—PetProtect LVT

July 3/10: Volume 32, Issue 2

By Ken Ryan

 

Screen Shot 2017-07-10 at 2.59.50 PMFor more than three decades, Invista’s Stainmaster has enjoyed the prestige of being arguably the most recognizable brand in flooring, a name synonymous with fiber durability and stain protection. In recent years, Invista has built on that heritage with the launch of PetProtect. Designed with pets in mind, the Stainmaster PetProtect carpet and cushion system resonated with consumers and pet owners for its ability to resist stains and odors.

Today, with hard surface growing exponentially, Invista executives decided the time was right to develop a hard surface product featuring Stainmaster PetProtect.

Nearly 20 months after the idea was conceived, Stainmaster PetProtect LVT was launched this spring with Dixie, Masland and Phenix as the first licensees. Despite being late to an already overpopulated LVT field, flooring dealers suggest Stainmaster PetProtect LVT most certainly will have a place in their showroom.

In preparation for this launch, Invista executives did their due diligence by drawing on consumer feedback and conducting their own R&D in developing this unique line. As with carpet, Stainmaster PetProtect LVT was created with the pet owner in mind (executives cite a statistic that claims 72% of U.S. households have at least one pet). To address that trend Stainmaster PetProtect LVT comes with two differentiating features—Claw Shield and Action Traction. Claw Shield provides a protective coating that helps resist claw scratches associated with pets. To complement the claw shield protective coating, the floors feature pet-action traction for pet paws. Both features include proprietary technology.

Claw Shield, for example, went through rigorous testing at Doguroo, a doggie day care in Atlanta, over the course of several weeks. Consumer feedback was also important in the technology’s development. Invista executives weighed both the good and negative feedback, made tweaks and delivered to the market what they deem to be a difference-making product.

“One of the key insights was our flooring reduced the slipping and sliding,” said Dana Wright, hard surface segment leader for Invista. “Claw Shield and Action Traction allow us to connect with the consumer base and helped us explore ways to solve problems and be able to deliver the benefits and make their lives better every day.”

Phenix, Dixie and Masland (Dixie and Masland are under the Dixie Home umbrella) are the first mills licensed to sell the Stainmaster PetProtect LVT line. These brands have had long histories with Invista and have embraced the Stainmaster story. Executives representing both Phenix and Dixie/Masland view the LVT launch as a brand extension, even though these companies are historically carpet mills. “The fact that we have already been participating in the PetProtect category has really made it quite easy for us to introduce this new product,” said Susan Curtis, senior vice president, product development, Phenix.

Screen Shot 2017-07-10 at 2.59.44 PMDan Phelan, vice president of marketing for Dixie/Masland, said the company’s entry into the tight LVT space would be far more difficult without the Stainmaster/PetProtect cache. “We go into this with a lot more ammunition at our disposal, and it’s not just blanks. When it comes to what makes you different, we had a simple choice—enter the market and sell LVT ourselves or enter and sell Stainmaster PetProtect LVT. Being a forerunner and early adopter of what PetProtect has meant on the carpet side—and what it could mean on the LVT/P side—will make the selling easier for the retail sales associate. It was an easy decision at the end of the day.”

Phenix created an entirely new merchandising display for its Stainmaster PetProtect LVT. Its Free Expression Loose Lay display consists of seven lifestyle boards, a collection of imagery of various geographic areas with which consumers can identify. The displays include both carpet samples and LVT as Phenix worked on a total coordination story. The displays feature an extended architectural folder that coordinates and ties in with each of the palettes. “The consumer who is looking for a well-curated and coordinated story will find this very easy to navigate,” Curtis explained.

Dixie/Masland first showed its Stainmaster PetProtect LVT display at Surfaces. Based on retailer feedback the display system was made smaller and more compact, using flip cards to maximize showroom space. There are 20 products in both the Dixie Home and Masland collections; however, each product is created to be unique. Dixie’s lineup includes 6mm and 7.5mm click offerings with a cork backing, each with different visuals and sizes. Masland is offering dryback SKUs including nine with a rigid-core construction; the sizes offered include 6 x 48 and 9 x 60 in rigid-core click in a heavy, 28 mil wear layer. “We are definitely in deep with this launch,” Phelan said.

Retailers react favorably
One potential challenge to the Stainmaster PetProtect LVT launch is the fact flooring dealers already have a well-stocked showroom containing LVT and its WPC and rigid-core offspring. However, in this case, they vowed to make room even if it means dropping another line or two.

Pierce Flooring/Carpet Mill outlets in Montana is carrying both Dixie and Masland. Greg Loeffler, vice president of sales and marketing, said the WPC/rigid-core/LVT segment has exploded in the last 24 months, albeit with very little separation among the competing players. “The products are quite similar even though everyone says theirs is the greatest. The fact is most are coming from a handful of factories in China and the differences are minimal. What’s different here is there is a unique selling proposition. Part of our thought process is to leverage the Stainmaster brand. It is still strong and valuable. We still have three design centers that are Stainmaster flooring stores, so Stainmaster sells well with our selling system and it is something our salespeople are very in tune with. This is a nice fit.”

Screen Shot 2017-07-10 at 3.00.01 PMLoeffler said the styling and construction of the Dixie/ Masland lines are very impactful and, most importantly, sellable. He especially liked Masland’s upgraded version with the heavier wear layer. “It gives us a premium option with added benefits along with the PetProtect name. Masland maybe over-engineered a bit and went on the high side of specifications, but it makes for a really high-quality product. The challenge we have today is we are competing in the weeds with all the discounters and low-cost offerings; it is a jump-ball situation with many of these products and often we don’t win because the margins are not there. We need to offer better quality and value to upsell our consumers. Masland certainly plays well into that. On our end we are going to put a lot of energy behind this.”

Amy Mitchell, sales manager for Britts Home Furnishings, with three stores in Georgia, reports that within one week of carrying Phenix Stainmaster PetProtect LVT she sold one job that comprised 1,100 square feet of LVT to cover virtually every room—except the bedroom. The buyers were a retired couple with a dog. Britts carries Mohawk, Shaw, USFloors, Mannington and Armstrong LVT, but she said there is room for Stainmaster PetProtect. “I am impressed with the visuals and the textures; it looks like wood and it has pretty patterns. PetProtect is really huge; it may seem silly to say but it is not. Dogs are going to ruin wood, period. This gives [the homeowner] peace of mind. Phenix did a great job putting together these displays and they did a really good job with the colors. I’m really excited about it. I think everyone else will be, too.”

The strong bond homeowners have with their pets has been an instrumental selling tool at Grigsby’s Carpet, Tile & Rug Gallery in Tulsa, Okla., which plans to carry both Dixie and Phenix. “It is such a good connection when you are asking about children and pets,” said Penny Carnino, vice president of operations. She called the move from PetProtect carpet to LVT a natural progression. “It’s another extension in carrying out the Stainmaster brand. If you have someone who in the past has had Stainmaster carpet, then she is much more inclined to buy a hard surface product with the Stainmaster name. If she had good results—and Stainmaster is great about taking care of any issues—she is going to feel that much more comfortable because she will have that assurance.”

Flooring dealers say Invista understands current customer mentality trends, and they responded in kind with an “all floors, all rooms” approach. By enhancing the Stainmaster PetProtect flooring portfolio, the company is able to tap into a broader consumer lifestyle approach. “It’s the No. 1 brand in flooring coupled with margin expansion opportunity for retailers,” Invista’s Wright said. “This new introduction allows us to cut through the sea of sameness.”

Invista is supporting the Stainmaster PetProtect LVT launch with national TV advertising, online videos and YouTube channel promotions. The TV campaign features a boy with his dog playing a game and includes the tagline: “Life should leave memories, not marks.” The spot began in March and runs through the end of July.

“As we have expanded our portfolios it gives us a chance to improve our messaging,” said Sakaait Mathur, senior brand manager for Invista. “Video advertising creates a bond between human and pet. This is kind of new to the market in terms of advertising and communication without mentioning the benefits of the product. Stainmaster PetProtect has solutions for the entirety of the home.”

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Raskin Industries expands via To Market acquisition

Objective is to bring proprietary products to array of channels

July 3/10: Volume 32, Issue 2

By Steven Feldman

 

Screen Shot 2017-07-10 at 2.51.08 PMNew York—Raskin Industries earlier this year acquired the assets of To Market, a direct-to-design chain supplier, and will work in concert with company founder and industry icon Phil Wexler to continue developing unique, proprietary products that offer more profitability.

The acquisition of To Market, which specializes in LVT but also sells recycled rubber and cork, opens up a new channel for Raskin. “I’m all about design, color and innovative products,” said Michael Raskin, president. “That is also the hallmark of To Market. So the acquisition is synergistic in that it affords me the ability to build the Raskin brand as a leader in color and design through multiple markets and channels. This gives me another outlet for my creativity.”

Raskin will design products exclusively for To Market with Wexler, who in 1979 founded Bentley Mills, quickly becoming a style leader on the West Coast.

Raskin felt he needed to have a stronger presence in the A&D community. “I saw where the market was going; it was going to become much more competitive. The majors would only continue to get better at it because they have the resources to put more feet on the street. I felt I needed to have a hands-on approach to have the ability to compete.”

Raskin Industries already sells product into the commercial market through its distribution network, but he plans on differentiating To Market through branding. “Raskin is more like the hip brand you would see in Brooklyn, and To Market is the refined brand you might see on Madison Avenue.”

To Market will likely evolve into Raskin’s premium brand with higher price points. But make no mistake: Unique design will be at the cornerstone of both brands. “I want to bring excitement to this industry,” Raskin explained. “Think John Varvatos. I want to bring that to the flooring industry.”

Despite the two brands, Raskin sees minimal overlap in product, and only in areas where there is no distribution for the Raskin brand. “My job is to provide the ammunition and profitability—the proper marketing tools and designs—to my customers, whether they are distributors, distributor reps, commercial sales force or our exclusive sales agents on the To Market side to be successful.”

To Market will now be based at Raskin’s Deerfield Beach, Fla., headquarters but its Oklahoma City warehouse and offices will remain open. In addition, key personnel— including Wexler, who remains president, and Alex Lapree, vice president of sales—is staying on.

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Resilient: LVT, WPC continue to seize market share

June 26: Volume 32, Issue 1
By Lindsay Baillie

 

Screen Shot 2017-07-05 at 9.21.00 AMThe resilient category continues to assert itself as a force to be reckoned with as it continues to generate substantial growth. FCNews research shows resilient sales in 2016 climbed to $3.499 billion (not including rubber), an increase of 19.7% over 2015’s $2.924 billion. This rise is almost four times the growth of the entire industry, which gained 5.1% last year. In terms of volume, the resilient category grew 6.5% to 3.537 billion square feet—the highest percentage of volume growth of all the other categories.

Resilient’s dominance is even more evident when viewed through the prism of market share. In 2016, the segment accounted for 16.5% of the total flooring industry in dollars and 18.8% in volume—the highest among all hard surface categories, FCNews research shows.

The main driver behind this dominant performance, industry observers say, is the continuous growth of LVT and its sister category, WPC/rigid core. Statistics show LVT, WPC and rigid core products made up more than half the dollars generated by the residential sector in 2016, capturing 48.1% and 19.52% of the sector, respectively. These percentages are key when taking into account residential resilient sales made up 63.9% of total resilient sales.

Resilient’s astonishing growth in sales in 2016 is even more significant when looking at the category’s performance over the past few years. FCNews research shows 2016’s sales represent a 40.4% increase from 2014’s $2.492 billion and a 58.6% increase from 2013. To put resilient’s growth into greater perspective, the category is up over $1.5 billion in the last five years (total resilient sales in 2011 were $1.931 billion).

In terms of volume, resilient saw an increase of 6.5% from 2015’s 3.321 billion square feet. While not as aggressive as its percent of sales, this increase was nearly double the industry’s increase, which clocked in at 3.8%. Last year’s volume also saw a 22.5% increase from 2014. A look back five years ago shows resilient’s volume has increased by 49.9% from 2011, a year in which 2.36 billion square feet was sold.

Industry observers believe there are several factors that contributed to LVT’s growth in 2016. “Compared to other flooring categories the LVT category has seen many design changes from additional looks, durability, availability and product makeup,” said John Wu, CEO, Novalis Innovative Flooring. “LVT has the perfect appearance and strength that allows a specific look at a less expensive price than upgrading to more expensive products.”

Michael Raskin, president and CEO, Raskin Industries, cited the product’s ability to be used in multiple applications as a primary selling factor. “The product is suitable for both commercial and residential, which offers sheer volume in square footage. In addition, the product can be mass-produced, which keeps the supply stable. The category is now available in many subcategories, such as dry back, loose lay, WPC, rigid, etc., which organically increases market share.”

Indeed, resilient’s ability to take market share from other flooring categories, such as laminate, hardwood and carpet, is well documented at the retail level. What’s more, the disproportionate increase of sales vs. volume within the resilient category reflects the fact that LVT and WPC have been able to maintain strong average selling prices—a phenomenon not usually seen in many competing categories.

“These numbers are indicative of the increase in average selling price of resilient products due to the rapid increase in WPC sales,” said Clark Hodgkins, director of resilient category, Shaw Floors. “The continued strong growth of WPC and the various rigid-core products are responsible for the large gains within the resilient category.”

Screen Shot 2017-07-05 at 9.21.37 AMThe product’s performance compared to competing hard surface categories is another factor driving category sales. “The fall of laminate flooring due to water and noise issues created a market for WPC and rigid-core products,” said Larry Browder, CEO, Karndean Designflooring. “The LVT industry has done a good job capitalizing on this.”

Other experts agree LVT is growing at the expense of other categories. “In the flexible category the majority of it is in the multi-family channel with a decent amount in the residential replacement in the smaller areas,” said David Holt, senior vice president of builder and multi-family retail and hard surface for Mohawk Industries. “But with the new intake of the new rigid vinyl products you have a lot of that going into residential replacement, and it’s going in at the expense of engineered wood and laminate.”

The design flexibility of LVT, which is marketed as a multi-purpose product for a variety of applications, is also driving consumers away from traditional hard surface products. “The versatility of LVT—tile or plank—makes it an ideal solution for any number of residential, commercial and project-oriented applications,” said Amanda O’Neil, product manager, Armstrong. “This multi-tasking ability has allowed LVT to migrate into builder, multi-family and residential-remodeling applications. The large space in which LVT operates, in turn, has afforded manufacturers the means to introduce differentiated product across a wider front, ebbing the march toward commoditization.”

Residential report
With respect to end-use markets, residential resilient accounted for the bulk of activity in the category. FCNews research show residential resilient sales reached $2.236 billion, a whopping increase of 28.9% over the prior year. Most executives found the greatest growth within this category to come from replacement/ redesign in both multi- and single-family homes. However, some executives also cited an increase in the new home construction segment.

Jonathan Klinger, chief marketing officer, Tarkett North America, explained the residential market is roughly an 80/20 split between replacement and new construction, respectively. “Within new construction we believe most of the volume is in single-family homes. The reason for that is there is roughly double the number of homes being built relative to multi-family units, and homes have larger floor space.”

Karndean’s Browder also attributed growth in the residential sector to replacement and redesign business, but he also highlighted a shift of LVT into builder applications. “Recently, LVT in the builder sector has started to show great promise, especially as the builder market for single-family homes has started to improve.”

Broken down by category, resilient sheet was down 0.2%; however, fiberglass was up 4.8% and felt was down 6%. Residential LVT and WPC (including rigid products) made up a large portion of residential sales (totaling $1.512 billion). Meanwhile, suppliers say residential tile was flat in 2016, simply maintaining itself against the bigger LVT, WPC and sheet products.

While LVT and WPC took home a larger piece of sales, sheet still dominated the residential sector in terms of volume. For 2016 sheet accounted for 1.156 billion square feet, or 47% of the category. Part of sheet’s appeal, experts suggest, is the cost as well as the aesthetic attributes.

“Sheet vinyl is still a tremendous value and brings a lot of features and benefits to the end user,” said Eric Erikson, vice president sales and marketing, North America, Beauflor USA. “For the price point it’s hard to find a better value.”

Screen Shot 2017-07-05 at 9.21.23 AMSome observers see a value proposition between LVT and sheet vinyl. “The glass sheet products have some of the same positive characteristics as LVT; they are waterproof and very durable,” said Jimmy Tuley, vice president of residential resilient for Mannington. “The other nice thing about sheet is you can [achieve] some looks that you cannot do with LVT. I think that there has been a nice improvement in the visuals of sheet vinyl. [Sheet] really has beautiful visuals and you can get it at a decent price.”

Functionality and affordability are two factors keeping sheet relevant in the residential sector. “It’s viewed as very functional and probably the most affordable category,” said David Sheehan, senior vice president of product management, IVC US. “For that reason it still commands a pretty large share of the marketplace in both the home center and specialty retail channel. Sheet is a great value proposition to the customer.”

LVT and WPC are not too far behind, however, with a combined 42.3% of residential volume. In fact, research shows WPC (which includes rigid core products) more than tripled in volume from 2015. Executives cite WPC’s features, ease of installation and various innovations as three of the product’s main selling points.

“The features and benefits of WPC are hard to dispute: waterproof, kid-proof and pet-proof, to name three,” said Jamann Stepp, director of marketing and product management, USFloors. “The ease of installation including no acclimation required and the ability to install over most any hard surface substrate are properties that dry back and sheet vinyl cannot offer. Minimal subfloor prep is yet another factor along with greater dimensional stability. The innovation within the WPC category is second to none: high-definition visuals, mixed widths and planks along with enhanced/deep beveled edges are properties and attributes not found in sheet or dry back products.”

Executies such as Piet Dossche, CEO of USFloors, view rigid core as “a step up from solid LVT.”

LVT is gaining more ground as it now finds itself in all areas of the home. “Originally, LVT became popular as a water-resistant, hard surface product ideal for mainly kitchens and sometimes spaces such as a laundry room,” Armstrong’s O’Neil explained. “In the past, LVT would not be considered for bedrooms or other larger living spaces throughout the home. However, this perception has changed in recent years.”

With respect to installation type, residential dry back LVT is down slightly from 2015, with a large portion of the market containing click and grip-strip, research shows. Again, experts say this shift is likely due to an increase in WPC sales, along with the ease of installation often offered by click and grip-strip products. Loose lay products had a small impact on the category.

“Floating LVT—solid click and now rigid core—is becoming the preferred format in residential applications due to the ease of installation,” said Gary Keeble, director of marketing, Metroflor. “The advent of rigid-core products has enhanced the ease-of- installation proposition by reducing or eliminating costs related to subfloor prep and disposal of the existing floor in many cases.”

While click is seen as a favorite, Lindsey Nisbet, head of product marketing and development, EarthWerks, explained both click and glue-down options have their positions in the market. “While there is clearly some overlap in the marketplace, the fact remains that no matter the specification, performance needs or style, there is an LVT/P to fit any requirement. As development continues to be more advanced and styling gets better—and more realistic—LVT/P will [hold] the leader position in industry growth. There is literally a style for any need.”

Some executives believe the glue-down market is still growing. “There are still several reasons to use a glue-back floor, especially when you’re going in to do new construction,” Mannington’s Tuley explained. “Things like being able to put cabinets over the top of the product or permanently attach it to the floor without moldings or transitions—and being able to do longer runs—all make glue-down a continued attractive product.”

Screen Shot 2017-07-05 at 9.21.14 AMMohawk Industries’ Holt acknowledged dry back has seen a decrease in the residential segment, but he adds: “There will always be a place for the product in two categories: multi-family and commercial.”

Some executives also view dry back as the optimal performing product, as it does not have to deal with certain issues after installation. “The best-preforming LVT, without a doubt, is a glue-down installation,” IVC’s Sheehan said. “In fact that’s why the commercial channel will always have dry-back.”

Speaking of commercial, observers believe dry back accounted for 73.3% of LVT/WPC business in 2016—3.6% increase from two years ago. According to David Thoreson, senior vice president of commercial hard surfaces, Mohawk Group, dry back is viewed as a tried-and-true product for the commercial market. He also sees promise in loose lay. “Difficulties with click systems from various manufacturers have pushed the market consistently toward dry back but also loose lay. We feel loose lay will grab a noticeable share by the end of 2017.”

Observers believe dry back will always remain king. “When you get into commercial applications, it’s a lot different from the residential side; you have things such as rolling heavy loads, foot traffic,” said Al Boulogne, vice president of commercial resilient, Mannington. “When you have something that isn’t glued down in those applications you’re opening yourself up to problems with gapping or peaking, or the floor just not performing as well.”

Tarkett’s Klinger shared a similar sentiment and explained that dry back sales are mainly driven by the commercial environment’s strict needs. “It’s primarily driven by the fact that in a commercial environment the need for both the installer and the end customer is that the installation is as robust as possible and that it’s going to be able to withstand heavy traffic.”

Commercial activity
Not including rubber, commercial resilient saw a 6.3% increase in sales, according to FCNews research. While commercial sheet was down 1.2%, commercial LVT—including a small share of WPC—increased by 16.7%. Commercial executives attribute the category’s overall growth to several factors including an increase in demand from key end-use market sectors.

“Healthcare was a pretty strong growth segment for us here,” Boulogne said. “It continues to pull through some serious volume on the resilient side. Two other segments for 2016: Hospitality is a segment that traditionally hasn’t really looked to resilient as a category but is starting to more and more. That was an emerging segment growth for us. The other similar story is corporate. That has become a growth segment as well.”

In perhaps direct relation to LVT and WPC’s percentage increase, VCT was down 5% in 2016. While some companies are concerned about VCT losing market share to LVT and other resilient products in the commercial space, others continue to see VCT as an opportunity. One of those companies is Armstrong, which recently completed a transaction to purchase Mannington’s VCT business.

Screen Shot 2017-07-05 at 9.21.07 AM“[The recent purchase] gives us a good opportunity to increase revenue within the VCT category, which has historically generated above-average profitability within our product portfolio,” O’Neil explained. “VCT is a very important product for our commercial customers, and it is a significant category within the hard surface flooring industry. We expect this transaction will enable us to increase our VCT volume and make more efficient use of our production capacity and go-to-market structure.”

Even though VCT claimed 515.7 million square feet in volume, some industry executives believe it will continue to face intense pressure from alternatives. “I think VCT is a category that is getting pinched by others,” Mannington’s Boulogne said. “LVT has a lot of performance attributes and price benefit vs. VCT. It’s getting harder for VCT to find its market position. LVT wins pretty easily in terms of style and design. VCT still has its places, but its getting pinched out as the market on the LVT side becomes more competitive.”

Other executives agree. “Due to the durability, appearance, ease of maintenance and price, we believe that VCT will continue on a downward trend for now,” Novalis’ Wu said. “Building owners are getting a premium product for pennies more a foot in comparison to a floor that requires more maintenance and usually costs 15 times more than the original price paid on VCT at the end of its life cycle.”

Rubber bounces up
FCNews research shows rubber generated $176.2 million in sales in 2016, a 4% uptick over 2015. In terms of volume the category accounted for 39.2 million square feet. Some flooring executives attribute the rise in rubber to commercial flooring’s shift away from soft surfaces. Others suggest rubber’s durability and sound control make it an ideal product for education and other highly populated/trafficked areas.

“We’re seeing universities putting them in corridors and student unions,” said Mark Tickle, director of marketing, American Biltrite. “[University] libraries are the traditional place for rubber.” He explained that while rubber has traditionally been used in post-secondary schools, it is now making moves in primary schools. He cited rubber’s recent restyling—which includes newer organic visuals and colors within patterns—as a top influencer.

Mark Bischoff, vice president of commercial sales, Tarkett North America, sees rubber being used in multi-use spaces because of its many benefits, including sound control, slip resistance, durability, flexiblility and easy maintenance, as well as thousands of texture, color and design options. “Another appealing attribute is the long-term performance record. Traditionally rubber flooring had been used in the most difficult and dangerous traffic areas of a building—the stairwells. Today, with updated visuals, that level of performance is welcome in many spaces across all segments.”

Part of rubber’s charm, proponents say, is it is suited to those end users that own their own buildings and are looking for long-term performance with minimal disruption. “Because of the unique sizes and shapes, vibrant saturated color and depth of surface texture options, we also see rubber used in retail and hospitality applications looking for branded experiences or outstanding visual impact,” Bischoff added.

Domestic vs. imports
FCNews research revealed 85.2% of the $1.724 billion LVT market is imported—a number that stood at 78.7% in 2015 and 78.1% in 2014. VCT, on the other hand, continues to be manufactured in the United States. As was the case in prior years, many executives believe U.S. production has yet to affect the market shift in domestic vs. imported products. In addition, some observers explained that even if a large shift toward domestic products did happen, imported materials and flooring would still be necessary to meet global demands.

“The bulk of LVT continues to be manufactured in Asia, and with the current LVT demand in the U.S. and worldwide, the additional domestic capacity still wouldn’t satisfy it.” Novalis’ Wu said.

Manufacturers with domestic facilities view any increase in domestic production as an opportunity to create price competition and drive innovation. “The more domestic manufacturers there are the less people will be looking to those imported products—which are really noisy in the marketplace right now,” Mannington’s Boulogne said. “Those that are making products domestically, it’s going to force us to be smarter about how we make [them] and be more cost competitive, but it’s also going to force innovation and I think we’re going to have to find ways to differentiate in a meaningful way to make sure we’re getting that share of the market.”

Domestic production also provides a great product story as well as faster delivery times, proponents say. “Having a ‘Made in the USA’ print on the carton means high quality,” Raskin said. “In addition, once a product is selected, time and place become critical. Domestic production can cut lead times down by two-thirds.”

Mohawk’s Thoreson explained that while LVT growth only offsets U.S. production, at some point the U.S. market will catch up and place pressure on manufacturers overseas. “As a result, the pricing will face significant downward pressure. Today Mohawk blends sourcing our commercial resilient collections with U.S. and believe in time U.S. production will take over all but the most specialized parts of our business.”

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Scoring flooring: Industry stats for 2016

June 26: Volume 32, Issue 1

 

Screen Shot 2017-07-05 at 9.05.12 AMThe flooring industry in 2016 continued its recovery from The Great Recession. While growth rates pale in comparison to the mid-2000s heydays, the industry last year continued to post steady gains across the board with increases of 5.1% in dollars and 3.8% in volume. This comes on the heels of 4.4% growth in dollars and 3.2% in volume in 2015; 3.6% growth in dollars and 1.8% in volume in 2014 and respective 5.5% and 3.8% growth in 2013. In fact, 2016’s figures represent the seventh consecutive year of dollar growth and fifth straight year of volume increases.

FCNews’ exclusive research reveals total 2016 flooring sales of $21.174 billion and 19.13 billion square feet. (These numbers are in wholesale dollars reflecting the first point of sale.) While the industry remains far off the peak it reached in 2006, when sales of $24.175 billion and 26.36 billion square feet (down 12.4% and 27.4%, respectively) were posted, it has gained back much of what was lost. The low point for the industry was 2009, when sales bottomed out at $16.189 billion and 16.625 billion square feet (in 2010). Since that time, the industry is up nearly 31% in dollars and 15% in volume.

Perhaps more significant is total industry sales surpassed the $21 billion mark for the first time since 2007, when sales were $22.337 billion, and volume is at its highest level since 2008’s 19.905 billion square feet.

Also of note is the fact dollars are growing faster than volume. That is a reflection of consumers buying more expensive goods in addition to a series of price hikes, particularly on the carpet and hardwood sides. The average selling price of all flooring in 2016 was $1.11 (same as 2015) and up $0.02 from 2014 and up $0.04 from 2013). Just to compare, the average selling price of all flooring in 2006 was $0.94. One needs only to look at the resilient category for an explanation. Ten years ago the average selling price for all resilient flooring was $0.64. In 2016 it was $1.04. A decade ago, sheet vinyl, vinyl composition tile (VCT) and the low-cost, peel-and-stick tile commanded 75% of dollars. Last year that number plummeted to 33%. The increased usage of the higher-cost LVT and WPC has been an industry game changer.

But it’s not just resilient. The average ceramic tile price has increased from $0.95 to $1.20 a square foot over the last 10 years, and hardwood has seen an average-square-price jump from $2.21 to $2.48 per square foot. Even the maligned soft surface segment—which has seen its share of the market dip from 63.6% in 2006 to 53.6% in 2016—has seen an increase in average pricing from $0.89 to $1.01. For the record, laminate is the only category with pricing in decline, going from $1.30 a square foot in 2006 to $1.09 in 2016.

Why has the growth been slow and steady and not more robust? For one, housing has not led the recovery from the recession and is actually lagging the economy. Also, in past recoveries there has always been a period of strong economic growth before it settles into normal growth mode. That has not happened with this recovery.

(Editor’s note: FCNews does not include stone flooring in its aggregate total, nor does it account for ceramic wall tile. In addition, rubber flooring numbers now reflect solely sheet and tile flooring with no accessories or cove base.)

Much like the past few years, the resilient category continues to be the locomotive powering the industry and luxury vinyl tile/WPC the catalyst for this explosive growth. In 2016, resilient posted the largest percentage gain of any flooring category, rising 19.7% to $3.499 billion from $2.924 billion in 2014. Since 2010, the category has increased a stunning 103% and is now at its highest point in history in terms of dollars.

In the grand scheme of things, resilient now accounts for 16.5% of the total flooring market in dollars and 18.8% in volume after a 6.5% rise in units to 3.537 billion square feet. In 2015, resilient held a 13.3% market share in terms of dollars, which was up from 12.2% in 2014, 11.9% in 2013 and 11.2% in 2012. Interestingly, its market share in volume had stayed around 15% for eight consecutive years until leaping to 17% in 2015. That suggests resilient’s average price point has increased by virtue of the migration from felt to fiberglass sheet, along with the transition from residential/commercial sheet and vinyl composition tile (VCT) to LVT and WPC.

Screen Shot 2017-07-05 at 9.06.32 AMFCNews research reveals just how much LVT along with its subcategory, WPC/rigid core, is driving growth of the segment. Sales have gone from nearly $750 million in 2012 to $948 million in 2013, $1.142 billion in 2014, $1.651 billion in 2015 and $2.161 in 2016. That represents respective gains of 26.4%, 20.5%, 27.1% and 30.9%. More telling, LVT sales have more than doubled in three years. It also carries with it a premium price tag as it comprises 62.5% of the category’s dollars but only 38.4% of its volume. To illustrate its growth, those numbers were 53.2% and 33.6% in 2015; 47.7% and 26.4% in 2014; 43% and 22.3% in 2013; and 37.4% and 20.6%, respectively, in 2012.

LVT increased significantly in both residential and commercial markets—dollars and square feet—in 2016. Residential LVT saw a 68.3% increase in square footage from 760 million in 2015 to 1.04 billion (including WPC), making up 76.1% of the LVT market. This number was 71% a year ago and 55% two years ago. The big increase can be attributed to the WPC bandwagon, which, to this point, is almost exclusively residential. The commercial market rose from 297.2 million square feet to 326.3 million square feet, a 9.8% increase. While residential brought in more dollars—$1.512 billion—last year, commercial LVT still performed well, posting a 12.5% increase, rising from $576.4 million in 2015 to $648.6 million in ’16.

Proponents of the category say the versatility of LVT—tile or plank—makes it an ideal solution for any number of residential, commercial and project-oriented applications. This multi-tasking ability has allowed LVT to migrate into builder, multi-family and residential-remodeling applications. The large space in which LVT operates, in turn, has afforded manufacturers the means of introducing differentiated product across a wider front, ebbing the march toward commoditization.

Originally, LVT became popular as a water-resistant, hard surface product ideal for mainly kitchens and sometimes spaces such as a laundry room. In the past, LVT would not be considered for bedrooms or other larger living spaces throughout the home. However, this perception has changed in recent years.

As LVT grows, it is taking share from other resilient categories, especially VCT. But it is also nipping from sheet vinyl as well. Sheet vinyl—both residential and commercial—has grown only 2.4% in the last three years, going from $791 million in 2013 to $809.6 in 2016. It actually was down 0.5% from $813.5 million in 2015. Residential has led the way here, but if not for the rebound in new home construction and manufactured housing, sheet vinyl would surely be down. The commercial market has taken the bigger hit, declining 16% in dollars from $254.24 million in 2013 to $213.5 million in 2016. However, the category was only down slightly in 2016, 1.2% to be exact, on the heels of a 1.4% decline in 2015. Sheet remains the volume leader in residential resilient sales with 47% of the market, down from 55.1% in 2015 and 60.2% in 2014, but it comprises only 26.7% in dollars, down from 38.9% in 2015.

Carpet
If you are looking for a bright spot in an otherwise flat year for carpet, there was builder and multi-family, in which the carpet segments fared pretty well in 2016 vs. 2015, according to executives. However, with overall residential carpet dollars down a tick in 2016, executives say that points to a decline in the residential replacement carpet business—further evidence of carpet losing out to hard surface.

FCNews’ research shows that carpet sales fell 1% in 2016 to $8.7813 billion compared with $8.87 billion in 2015. However, total volume—which includes carpet and area rugs—gained 1.2% to 11.22 billion square feet from 11.09 billion square feet in 2015. Residential carpet sales declined an estimated 1.5% in 2016 while units were up 1.3%. The commercial portion of the pie, meanwhile, dropped 0.5% in sales with volume falling about 1.5% year over year.

The carpet story really hasn’t changed much in the last three years, except in 2016 commercial was softer than it had been in the previous two. Flat to a point up or two down is nothing to write home about, but it is a far cry from a decade ago when carpet was in the throes of a deep recession—as were other flooring segments—with double-digit losses in both sales and volume.

Executives say carpet is doing well at the low end, where polyester has been dominant. However, some note that PET is contributing to the shrinking dollars in carpet in what they see as a race to the bottom and, consequently, a devaluation of the category.

The high end ($14 and up) is said to be doing well, with soft luxury goods as well as stain and soil resistance resonating with consumers. Still, it is going to be a challenging road for carpet going forward. One leading executive said builders in the South and Southwest, which is seeing the greatest population growth, are constructing homes and apartments with much less carpet than in the past.

Screen Shot 2017-07-05 at 9.06.51 AMOn the bright side for soft surface is rugs, which for a third year in a row outperformed carpet, with sales rising an estimated 3% over 2015. The area rug business, observers say, is benefiting from hard surfaces; however, many specialty flooring dealers say they are not yet reaping the full benefit of these add-on sales in the same as way furniture stores and other outlets.

Hardwood
A strong residential replacement/remodel market, combined with improvement in certain sectors of the new construction market, contributed to another year of growth for the U.S. hardwood flooring category. FCNews research shows hardwood flooring sales reached $2.23 billion in 2016, a 5.1% increase over 2015’s upwardly revised sales of $2.12 billion. Square footage sold likewise grew to an estimated 898 million square feet, a 4.8% increase over 2015’s 857 million square feet.

Looking at the big picture, hardwood flooring represents 10.5% of total industry sales but only 4.7% of total volume. Compared to five years ago, wood represented 9.1% of total flooring dollars at the first point of sale and only 3.9% of total volume.

Industry observers attribute much of hardwood’s activity in 2016 to the growing popularity and production of engineered floors. While solid wood flooring still remains the go-to product in certain parts of the country, several suppliers have introduced engineered hardwood products that replicate the overall thickness of ¾-inch solid wood flooring. The end result is the traditional solid wood flooring end user—builders and contractors, in many cases—can now nail down an engineered floor in much the same way they would a solid product and still be able to sand and finish multiple times.

Right in line with the swing from engineered to solid is the move to prefinished from unfinished (traditional hardwood flooring contractors being the primary exception). FCNews research shows the share of prefinished products grew to nearly 60% last year—up from just 54% the year prior. Looking back five years ago, the ratio of prefinished to unfinished was just the opposite.

The U.S. hardwood flooring market also saw a bit of a shift with respect to domestic production vs. imports. FCNews research showed imports from Canada rose slightly from 9% to 12% in 2016. At the same time, shipments from Brazil dropped from 5.6% in 2015 to just over 3% in 2016. Although China—which ships more engineered than solid product—still accounts for the bulk of imported hardwood flooring, its share also fell slightly year over year.

Ceramic
The tile segment closely follows the overarching economic trends that impact all major spending. Those drivers include new housing starts, commercial market recovery, consumer confidence, credit availability and interest rate fluctuation. When those indices are positive, ceramic sales and volume follow suit. And so it was again in 2016, the seventh consecutive year of growth for ceramic, with sales rising 5.7% to $2.761 billion and volume increasing 5.9% to 2.31 billion units.

The seven-year winning streak followed a dark three-year period, during which time sales and volume plummeted an almost incomprehensible 20% or more each year, with 2009 representing the low point (24% decline in sales, 22.5% down in volume).

The trend since 2010 has been that single-family homes grow ever larger, and multi-family residences continue to shrink. Since ceramic tile represents a greater percentage of the flooring used in a single-family home than a multi-family property, this has had a positive impact on the category. In 2016, growth occurred in all segments; builder and overall commercial each rose an estimated 7%-10%, while retail—the laggard of the group—was still up an estimated 2%-4%.

Domestic production has been a big story in ceramic tile for the past few years, and 2016 saw several companies expand production or break ground on new plants. In March 2016, almost two years to the date that Dal-Tile’s $180 million, 1.8-million-square-foot facility was announced in Dickson, Tenn., the company’s first production run was completed, with large format 12 x 24 glazed porcelain tiles being produced.

Commercial activity was up in most sectors with growth seen in hospitality, healthcare, education and corporate spaces. Commercial projects and spending continued its upward trajectory as well.

The only discernable drag on ceramic tile is labor. Experts say growth was partially stunted due to continued labor issues in the marketplace. For the ceramic market to reach its full potential, more qualified tile installers are needed. As the flooring industry knows all too well, that is no small task.

For now, however, achieving mid- to high single-digit growth will have to suffice. Compared to the 2007-2009 crater, the industry will gladly take it.

Laminate
In 2015 the U.S. laminate industry began to see a significant drop-off in imports from China. At the same time, many European suppliers—particularly German laminate flooring producers—expanded production capacity to fill the void. Observers say that trend spilled over into 2016 where U.S. laminate flooring sales were estimated at $1.154 billion. Taking the pullback of Chinese product into account, that held growth to just a mere 1.5%—the lowest rate of increase of any hard surface category.

Volume-wise, the category grew at a rate of 2% to 1.054 billion square feet—a reflection of the rise in shipments from Germany plus the increased domestic capacity that came online toward the latter part of the year.

“Europe has shifted from 14% to 19% while China fell from 26% to 21%,” said Travis Bass, executive vice president, Swiss Krono, which puts the domestic/import split around 60/40, respectively. The company, which has production facilities around the globe—including here at home—says its share of the market grew to 12%.

Just as the mix of laminate sources has changed in recent years, so has the sales activity as defined by distribution channel. FCNews research shows the specialty retail sector accounts for roughly one-third of category sales. What’s more, observers say, many of the laminate flooring products sold at this channel represent thicker, higher-margin items not typically sold at the average home center or mass merchant. This includes 12mm and 14mm products vs. the thinner, entry-level boards available at many home centers and discount merchants. All this spells opportunity for the independent or aligned floor covering dealer.

The bigger story, though, was laminates’ decline in terms of the overall share of hard surface activity. In 2011, for example, laminate flooring represented 16.9% of all hard surface sales and a little over 14% in terms of volume; last year, the category’s percentage of hard surface sales slipped to 11.8% in value and 13.4% with respect to volume. Meanwhile, competing products such as resilient and ceramic tile grew their respective shares of the hard surface market over that time period.

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Distributors rally behind Raskin’s FloorNation

May 22/29, 2017: Volume 31, Issue 25

By Ken Ryan

Screen Shot 2017-05-30 at 10.49.27 AMWith the luxury vinyl tile market bursting at the seams with so many new products entering the fray, distributors are tasked with seeking out products that offer true differentiation.

In Raskin Industries’ FloorNation, wholesalers say they have found a winning combination—a line offering great style and design, coupled with a made-in-the-USA story. FloorNation is a phthalate-free, virgin vinyl flooring available in three collections: Freedom, Pride and Glory, all featuring the company’s G88 advanced coating system.

Although FloorNation has been out for more than a year, some locations are seeing it for the first time. Such is the case in the Rocky Mountain region, where Midwest Floors, a Salt Lake City-based distributor, just introduced the line. “It’s been a huge success,” said Eric Parrish, owner. “Our customer base is most excited to have a product that focuses on quality and service. We all want something unique and original, and that is what Michael Raskin has done. He has taken time to see the trends and color tones that influence our North American market and then made his own color offering to complement our wants and needs with the Raskin line. Add in the fact that it’s made in the USA and you have a story worth telling and then selling.”

Ted Rocha, director of sales for Raskin, has worked on expanding the company’s distribution network since joining the company in 2016. He was particularly impressed with Midwest Floors’ rollout. “Midwest has never launched an LVT line like ours; their eyes are wide open. They really got behind it and have gotten out of the gates very fast. They are in a small market but it is amazing how much they dominate their market.”

Gilford-Johnson Flooring, a top 20 distributor, has carried the FloorNation line for several months and reports brisk activity. “What makes FloorNation so attractive for Gilford-Johnson is you have a concise product offering in the hottest category in flooring,” said Jodie Doyle, vice president of product management. “When you add Michael’s ability to bring popular, cutting-edge decors to the product line and the made-in-the-USA story, that’s a really great combination for a distributor and a tremendous value proposition for our customers.”

Doyle said Gilford-Johnson retailers have “eaten up” the Glory product line, which boasts a 4mm thickness and 20-mil wear layer. The line also features an extra wide (9.25 x 59.25) extra long format available in five colors. “There are three great selling stories in the FloorNation line, but Glory has been an absolute home run with our customers.”

Market expertise
Distributors credited Michael Raskin and his team for their extensive LVT knowledge as well as their ability to listen to the challenges distributors face and focusing on bringing solutions to the market. “With quality, service and price you can only pick two—and we went with Raskin Industries and their call for quality and service,” Parrish said. “Too often price is the story that is sold, but as a homeowner or a business owner we would never put in the cheapest product if we were educated on what makes other products better. At the end of the day someone can disagree with my opinion, but the fact is design matters and Raskin is proving that with FloorNation.”

Parrish added that the made in America angle is a very big deal from a logistics standpoint and should not be discounted. “Managing inventory from containers is a constant juggling act and one that is never perfect. To take a 20-week lead time out of the equation is a solution that everyone is looking for.”

Scott Carson, director of products and marketing for T&L Distributing in Houston, said the domestic production of FloorNation has made a huge difference in his company’s ability to service customers on a timely basis. “The product is being built in Ohio, and they are carrying product in Ohio. I can have the product in one to two weeks as opposed to 8-10 weeks [if imported]. That is huge for my business.”

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Resilient: LVT finds a home across major contract end-use sectors

June 5/12, 2017: Volume 31, Issue 26
By Ken Ryan

 

Screen Shot 2017-06-09 at 11.11.16 AMLuxury vinyl tile has clearly found a home in the commercial flooring market where its footprint is exhibited in all settings and applications. And with the advent of WPC and rigid core offerings flooding the market, specifiers have more options than ever to complete their projects.

Prior to taking over as Tarkett’s director of product management and marketing for LVT, Jeremy Salomon spent seven years on the commercial side overseeing sheet goods and VCT. He saw firsthand how the market was transitioning to LVT. “What we found is while there is a lot of application for sheet vinyl in commercial the quality of installers is dwindling,” he explained. “Sheet is a different skill trade; many installers haven’t been working with sheet goods and don’t have the skill to master it. And the ones who do know sheet are nearing retirement. In contrast, anyone can install tile or plank.”

Salomon said that while VCT is less expensive to install than LVT, there is a cost to maintain VCT that makes LVT the more cost-effective solution for the long term. “You have LVT costs coming down and you also have all the aesthetics that VCT couldn’t provide. LVT is so much easier to work with.”

Commercial clients are looking for a durable product that can withstand heavy foot traffic and rolling load environments and still provide an aesthetically pleasing design. “Like the residential market, there is a need for realistic visuals in wood and stone, but commercial clients are also looking for alternative designs that include woven, textile or wood and stone blends that can function as transitional elements in a space,” said Amanda O’Neil, product manager for Armstrong.

Al Boulogne, vice president, commercial resilient business for Mannington Commercial, added that this “aesthetic freedom” comes with the security of a product that performs in even the toughest commercial applications. “High-performance wear layers, balanced constructions and a huge variety of installation options complete the package to make LVT an easy choice in any application.”

Screen Shot 2017-06-09 at 11.13.18 AMThe competition within the LVT category has pushed manufacturers to improve print designs, color offerings, in-register embossings, wear layers and larger sizes. Gary Keeble, director of marketing for Metroflor, said manufacturers are adding new platforms “above and beyond traditional glue-down products. Floating platforms can be either loose lay or commercial resilient vinyl click, which offer speed of installation and reduced cost without the costly floor prep required with glue-down products.”

Christy Schofield, director of commercial hard surface for Mohawk, said the overall value of LVT, the flexibility of the visuals, performance and ease of maintenance combine to make it a natural fit for the commercial market. “It has opened doors and allowed us to provide the entire flooring solution for commercial and hospitality projects.”

Sector strength
LVT/LVP wasn’t always the product de jour for the commercial segment. However, concern over constant maintenance, scratches and moisture have—in some cases—dissuaded some commercial establishments away from real wood, observers say. “As wood imagery becomes more authentic, faux wood alternatives have become more attractive,” said Laura Nieto, communications and marketing specialist for Cali Bamboo. “The high-end LVP options today are more beautiful than the vinyl of years past, which was typically seen as the run-of-the-mill industrial option. Today’s LVP also carries improved durability and waterproof properties—an absolute must for many commercial spaces like restaurants, grocery stores, gyms and medical centers. That extreme durability translates to very little upkeep and no sanding, refinishing or polishing.”

Mannington’s Boulogne said LVT “is in play” in virtually every commercial segment today. “Traditionally, we’ve seen LVT in retail, healthcare and education but now the category is breaking new ground in hospitality, multifamily and corporate. Because of the features and benefits there are compelling attributes of LVT that can drive the product through each one of the main commercial sectors.”

Cost and time spent on a project are key factors when specifying products. LVT and its iterations provide a significant savings compared with other products and save time on the installation end. “The product itself often comes at a lower price point than hardwood, and is lightweight and easy to install with less underlayment prep,” Nieto said. “Businesses see a faster, less-expensive turnaround and they save money on labor. They also don’t have to shut down for too long a period to accommodate lengthy acclimations or installations. Due to vinyl flooring’s dimensional stability, expansion is not a major concern and therefore requires fewer transition pieces. Depending on the product’s construction, indoor air quality is not compromised—a common concern with laminates and lower quality products.”

New rollouts
Screen Shot 2017-06-09 at 11.12.00 AMUSFloors’ COREtec is on the road to becoming a consumer brand, but the many variations of COREtec expand into the commercial space. Its 2017 introduction, Plus XL Enhanced, for example, is offered in 18 hardwood decors with an embossed grain pattern, an attached cork underlayment and a four-sided enhanced bevel edge that works well in light commercial environments. The patented COREtec technology allows easy handling and installation, making COREtec Plus XL Enhanced an alternative to glue-down LVT, locking LVT or laminate flooring. The company said the rigid core platform—which is constructed of recycled wood, bamboo dust, limestone and virgin PVC—provides a 100% waterproof floor that can be installed in wet areas and will not swell when exposed to moisture or excessive amounts of water.

Metroflor took a major step forward in the rigid core category with the introduction of its proprietary Isocore technology in Aspecta Ten and Engage Genesis. Isocore’s solid PVC cellular core gives it strength and rigidity, along with an LVT top layer and an attached pad to help mitigate sound transmission, according to the company. Aspecta Ten and Engage Genesis are specified for most commercial segments including retail, hospitality, assisted living, education and corporate.

Karndean’s glue-down products, which include Kaleidoscope—a collection of modular designs custom cut in compatible geometric formats—offer a variety of designs, sizes and technical specifications to address the needs of any commercial sector. Larry Browder, CEO of Karndean, said the company’s components system allows designers to create wayfinding and zoning to make the best use of the space, no matter the commercial specification. “Whether it’s a hospital looking to facilitate patient flow, highlight key areas or walkways in educational environments or separate areas of an open office plan, we can meet each of these requirements.”

Novalis Innovative Flooring continues to make a big push in commercial. The company is touting its two newest AVA collections—SMPL and SPRK. SMPL is floating floor with a click locking system and an attached cork underlayment for improved acoustical performance. AVA SPRK is available in 18 x 18 tiles in a variety of brights and neutrals with built-in antimicrobial properties.

Mannington launched more than 200 visuals into the market in 2016 and continued that trend in 2017. Featured are bold colors in its new Color Anchor line, along with a relaunch of Mannington Select premium LVT and rigid core products seen in City Park and Crown collections for commercial applications.

In May Johnsonite unveiled Transcend with SureSet technology. Salomon said the product is unique in that it is a loose-lay design but includes a pressure-sensitive adhesive that allows the floor to remain steadily in place. “Most of the market is glue-down because of rolling traffic. This product is exceeding expectations. There is no wait time for the glue to dry and all acoustics are intact.”

Specifiers have cited Raskin Industries’ Elevations loose lay because of its weight and stability, citing the ability to loose lay a vinyl floor without having to deal with either gluing the strips together or clicking boards together. In addition, Elevations offers environmental benefits (no adhesives or VOCs). Elevations comes with an anti-skid rubber Gravity Grip backing system and double-sided perimeter fastening tape that firmly secures it to the subfloor without any additional tools or materials.

Cali Bamboo’s operations team spent months fine-tuning custom HiFi imaging technology to precisely capture the authentic look and feel of real hardwood grains. The result was Cali Vinyl. The collection includes imagery for three of Cali Bamboo’s most popular solid bamboo floors—Java, Antique Java and Natural. A specialized quality control process ensures all Cali Vinyl styles include twice the number of unique planks.

Lineate by Durkan, one of Mohawk’s latest enhanced resilient tile collections, drew inspiration from two of the hottest trends in surface visuals: ombre/gradient and striated textile looks. “The color ebbs and flows across the plank to give the illusion of depth on a flat surface,” Mohawk’s Schofield said. “Lineate’s loose-lay construction allows for quick installation and immediate occupancy.”

Schofield said the designation of LVT as a product category is falling away at Mohawk and being replaced by ERT (enhanced resilient tile) “because we believe that all Mohawk products are all enhanced in some way.”

Armstrong’s newest commercial LVT collection, Natural Creations with Diamond 10 technology, promises a longer life cycle that translates to fewer replacement costs thanks to its scuff and stain resistance. New Natural Creations offerings for 2017 include Spettro and Mixer. Spettro captures the textural and visual softness of carpet, while Mixer offers a palette of colors. Both feature Diamond 10 technology.