Tag: 2018

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Starnet fall conference: All about people, partnerships, progress

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

By Reginald Tucker

 

San Antonio—Raw, damp weather greeted many of those who turned out for the kickoff of the 2018 Starnet fall conference here earlier this month, but the unusually dreary conditions didn’t put a damper on the spirits of the convention guests in attendance at the sprawling La Cantera Resort & Spa.

“When we booked this venue three years ago, resort management told us it’s usually 70 degrees and sunny in San Antonio this time of year,” Jeanne Matson, Starnet president and CEO, said as she welcomed members during her opening presentation. “But when we arrived they said it was the worst October they’ve seen in years.”

Nonetheless, it was the group’s highest attendance ever for a fall membership meeting, according to Matson. Close to 400 people representing roughly 60% of Starnet’s 178 membership turned out for the event. “We believe it’s due to venue as well as the agenda,” she said.

The jam-packed conference meeting agenda and events schedule, by design, was predominately geared to foster networking amongst contractor members, vendor partners and Starnet staff; sharing best business/management practices; and, of course, education. There was also a half-day dedicated to instructional product demos focused on subfloor prep and moisture mitigation—a hot-button topic for many commercial flooring contractors.

It was all in keeping with the overriding conference theme, “Partnership for Growth,” which included member to member relations as well as alliances with the group’s preferred suppliers. “The members really like each other and learn from each other. Also, the vendor network is incredibly important to us,” Matson told FCNews. “When our members at the field level can partner with our vendors to create business and generate projects together, specify the materials and provide post-installation care—that’s where the partnership really comes together.”

Starnet vendors tend to agree. “As a charter vendor partner, Armstrong Flooring has benefited from Starnet’s ‘Partnership for Growth Initiative,’” said Shelley Ackerman, national sales manager, commercial groups. “Our partnership with Starnet affords us deeper and more meaningful access to their membership through board of director meeting participation, vendor roundtable meetings and meeting trade show opportunities. The partnership is truly a two-way street of collaboration, idea sharing and defining mutually agreed-upon goals.”

Starnet contractors also attested to this key aspect of membership. “Starnet has fostered relationships with key individuals within a manufacturer at all levels, from the local representative and regional vice presidents and as far up as the national sales manager and president,” said Dave Triepke, CEO of Universal Metro, based in Santa Fe Springs, Calif.

For other contractor members such as CB Flooring, based in Columbia, Md., the primary benefit of an affiliation with Starnet is the ability to network with—and learn from—dealers across the nation who openly share their best practices. “The camaraderie in our group is amazing,” said Chuck Bode, president. “Starnet is a band of brothers and sisters who have joined together to help improve their businesses and preserve the role of the independent entrepreneur in a fast-changing industry.”

Catherine Franzella of Sun Interiors, based in Harahan, La., leverages her company’s partnership with Starnet as a means to accomplish several key objectives. For her, the fellowship the conference provides valuable opportunities to learn from larger companies and vendor partners. “We definitely strive to reinforce our connections with our vendor partners and other dealers when we head out to train,” she explained. “This gives time to network, communicate and strategize on ways to separate ourselves in the marketplace.”

As a growing player in the floor prep/moisture-mitigation world, Franzella said she received a wealth of important information and hands-on/visual training to take back to her business. On a more personal level, actively participating in the commercial cooperative has enabled her to grow “tremendously in the nearly two years since I attended my first meeting, both in knowledge and in confidence,” she told FCNews. “I’ve met people from all over the country who are in similar positions coming up in the next generation.”

And that’s precisely the point—putting members in the best possible position to succeed, Matson noted. “Our No. 1 focus is supporting our members as they grow,” Matson said. “When you read our mission statement, it’s really about improving their profitability. Obviously, the revenue growth is going to be a big part of that. But the more services they can offer their end users, the more products we can offer them to give them that profitability.”

But make no mistake—it’s not a one-size-fits-all program. “I always say we have 178 members, but we have 178 different business models,” Matson said. “While some of our members do residential work, I would say 85% are committed to commercial flooring as their driver.”

Favorable conditions
Of course, it can’t hurt when positive market conditions support an environment that’s conducive to new business opportunities. In his presentation to Starnet members during the general session, Mark Bischoff, vice president, vendor relations, provided useful research findings and statistics that bode well for the non-residential market.

“This year, the strongest growth is expected to come from the commercial sector with spending in office, retail and other commercial and lodging all expected to see gains of 4%,” he noted, citing leading construction forecast data. “By 2019, the major commercial sectors will likely see slower growth, while industrial, healthcare and educational facilities are projected to see spending gains of 4% or more.”

Ample growth opportunities are expected to emerge in the healthcare sector in particular, according to Bischoff. Citing a phenomenon he calls the “silver tsunami,” he pointed to an aging segment of the population and the subsequent need for assisted-living facilities. “Follow the data,” he advised attendees. “Baby boomers are impacting the healthcare business. Senior-living facilities are going to be more and more in demand, and our members are well positioned to take advantage of that.”

But that’s not the only end-use segment worth watching. According to Matson, education looks like it’s going to be a big bright spot going forward (K-12) as well as higher education. “I’ve spent quite a bit of time over the past 10 years doing college visits; there are construction cranes all over campuses across the country. There are endowments to fund that construction.”

Matson also expects to see the hospitality sector further strengthen. “We’ve had a good run in that segment, and I think that will continue. There are a lot of hotels out there that require refreshing. The economy is doing well right now, but we know it’s going to soften at some point.”

In the meantime, Starnet contractors are keeping busy. Randy Rubenstein, president and CEO of Rubenstein’s Contract Carpets, based in Seattle, said he’s backlogged through 2020. “The hot sectors for us right now include multi-family high-rise and corporate, and we’re also seeing a lot of casino projects and hospitality work,” he told FCNews. Furthermore, these sectors have had an impact on the specific products being specified. “We’re doing a lot of ceramic, resilient and terrazzo, but not too much in the way of carpet.”

Hospitality and corporate jobs have also been providing contractors like CB Flooring with a lot of work. But the strongest growth potential, according to the company, lies in the healthcare arena. “Many members have a record sold backlog heading into 2019,” Bode said.

 

Starnet’s Fred Williamson takes a bow

Fred Williamson, executive vice president of Starnet, announced his plans to retire after 13 years on the board of the cooperative and 50 years total in the commercial flooring industry.

Jeanne Matson, president and CEO of Starnet, led the tribute to Williamson in her remarks to the general session on opening day: “There’s nothing I can say about Fred Williamson that you all don’t know already. He’s a true gentleman with integrity and intelligence—a tireless worker. He has really committed himself to building the partnership between our members and our preferred vendors, and somehow he has been able to do that with equal energy and honesty for all parties and a true commitment to making this organization better.”

Chuck Bode, chairman of the Starnet board of directors and president of CB Flooring, Columbia, Md., presented Williamson with a retirement gift—along with a few good-natured barbs—on behalf of the group. “Fred has the most unbelievable work ethic I have ever encountered. Smooth as silk professionalism, unparalleled moral compass. All of us will deeply miss his wisdom.”

Williamson, who received a standing ovation during his acceptance speech, thanked the group and attendees profusely. “The past 13 years for me have been an adventure. It certainly has been something I have enjoyed immensely because it meant meeting so many old friends, renewing friendships and, of course, building so many new ones. My thanks go out to all of the past board chairmen/chairpersons who have given me the opportunity to have an additional 13-year career that I was done with. It gave me new life and energy and was a great opportunity for me and my family. Thank you, I love all of you.”

Although this marks Williamson’s last go-round, Matson hinted at the possibility the group might see him again down the road. “This is Fred’s final membership meeting, but I don’t think you will ever find Fred to be a stranger.”

 

 

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WFCA empowers members with upcoming 2018 conference

Dalton—The World Floor Covering Association (WFCA) will host an educational conference titled Empower 2018 from Sept. 20-21 at La Cantera Resort & Spa in San Antonio, Texas. The program will provide attendees with new and refined strategies, along with peer-to-peer connection opportunities, designed to propel their companies to new levels of success. This conference is part of WFCA's core initiative to ensure members access to the best professional training and a second-to-none professional tool kit.

The speaker lineup is a veritable “who’s who” of current stars on the professional business executive circuit. Empower 2018 will kick off with a keynote presentation delivered by Steve Hillis, chief executive officer of Empower Partners in Canton, Ga. He has been in the flooring industry for more than 30 years and has spent portions of his career fulfilling senior roles at Milliken & Company, Floor Focus, Beaulieu Group and The Mohawk Group. His presentation will focus on management leadership and the impact that best practices can have on employee retention, gains in efficiencies and team empowerment.

Jon Newman, owner of JLN Business Development based in Atlanta, Ga., will lead a discussion entitled “The Way to Wealth.” His focus will be on the positive effects of increasing both close rates and average tickets. Newman will shed light on how many dollars actually leave with those customers—even when you make the sale—and how to optimize in-store sales by identifying and addressing the needs and wants of those customers.

Additional speakers include: Debra Trueman, president of Manitzas Trueman Consulting Services based in San Antonio, Texas, who will be talking with audience members about the rapidly changing landscape of workplace sexual harassment and effective methods for the prevention of abusive behavior in the workplace; and Steve Abernathy, WFCA’s own chief financial officer, who will shed light on how to prepare for succession planning in his presentation “Next Steps in Building Your Business for the Future.”

Additional roundtables, panels and discussions will include: “Why Certification Matters” moderated by Robert Varden, vice president of Certified Floor Covering Installers Association, and Tom Jennings, vice president of professional development, WFCA; and “Managing Your Online Reviews,” presented by Jon Newman, owner of JLN Business Development, and Sam O’Krent, owner of O’Krent Floors. Many other speakers and panel discussions are scheduled as well.

For more information, visit: events.r20.constantcontact.com/register/event?llr=vr5uzprab&oeidk=a07eff7qeon158d3211.

 

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Coverings 2018 to reprise tiny home theme for IDS

Arlington, Va.—Coverings’ninth annual Installation Design Showcase(IDS) will showcase tiny homes for the second year running, noting the continued interest in this design and building trend. Tapping leading designers and contractors to share their talent, the IDS exhibit will feature live tile and stone installations by certified installers with materials from industry-leading manufacturers. The exhibit will take place in Booth 8804 in Hall C of the Georgia World Congress Center in Atlanta, from May 8-11.

Following is a preview of the three tiny homes.

Smart modern living
Jeffrey Baker of Jeffery Bruce Baker Designs embraced a warm, modern style for his project, applying clean lines and an open-space layout concept to give the tiny home an open feel and maximize usable space.

“We used the combination of tile and finish materials not just as a decorative element, but as a way to express the architecture of the home,” Baker stated. “With unique applications, including a checkerboard of wood-like squares applied to columns within the home, tile had a major impact on the space and overall design.”

Installer Woody Sanders of DW Sanders Tile & Stone Contracting has been collaborating with Baker for nearly half a year to ensure a seamless installation within the tight space. The home will feature tile from Estime Ceramica.

Luxe cottage
Brittney Ferren of The Johnson Studio at Cooper Carry created a “luxe cottage” with her tiny home project. Drawing inspiration from the imagined needs of a young, retired couple seeking a mountainside getaway with all luxuries of home, she created a high-end, yet cozy, environment with accents like a fireplace, wine cooler and plants.

“Everything from furniture to fixtures has to be at an appropriate scale for such a small space,” Ferren said. “To that end, we’ve incorporated tile not only on the traditional floors and walls, but also on countertops, shelving and built furniture components of our space. Using different scaled, textured and colored tiles helped us accent design elements without enclosing the space or feeling cold.”

Sam Bruce of Visalia Ceramic Tile collaborated on the project from an installation perspective, marking the company’s second year participating in IDS. The installation team will work with tile from Ceramics of Italy.

CG villa
Rita Carson Guest, FASID of Carson Guest,has created a contemporary design leveraging neutral colors and light walls to make the space appear larger. The home uses lightweight, large tile panels as a creative solution for the mobile tiny home, where tight spaces and weight are a key consideration.

“Selecting finishes that will make the space appear larger is important when designing tiny homes or other small spaces,” Guest said. “We used tile as a starting point for our creation, building the design around the tile used for the walls, floors, shower and countertops.”

Erin Albrecht of J&R Tile will bring the design to life through its installation at IDS. The home will feature tile from Crossville USA.

Attendees are encouraged to visit and explore the homes, which will be featured on the show floor for the duration of Coverings. On May 10 at 3:00 p.m. attendees can meet with the designers and contractors for a one-hour interactive session deconstructing the design and installation of each project followed by a reception.

For more information, visit: coverings.com/IDS.

 

 

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Five design trends inspire Couristan’s 2018 collections

Fort Lee, N.J.—Inspiration comes from every corner of the world, according to Marlys Giordano, creative director at Couristan. For 2018, it’s all about incorporating color, global-inspired prints and recycled materials to provide a sense of well-traveled, trend-aligned design for the home.

In the company’s first-ever trend report, Giordano identifies five key trends that have inspired many of Coursitan’s new area rug collections, introduced at AmericasMart in Atlanta in early January, and further showcased during the Las Vegas Market.

Following are the five trends:

Shock value. This trend combines vibrant hues, utilized in unexpected applications, giving classic pieces an updated feel. The rugs that answer this trend blend bold motifs with of-the-moment color stories, resulting in classically-modern styles.

Work ethnic. Tribal in feel, this trend draws its inspiration from patterns found in Africa, India, Vietnam and beyond. Utilizing a warm palette, the colors balance beautifully with the neutral foundations found throughout this trend.

The naturals. Cultivated from organic elements and natural fibers, the naturals trend is clean and light—visualize a sunlit living room in whitewashed detail.

Wandering eye. Wanderlust is an ideal word to describe this trend, which is inspired by exotic locations like Morocco, Mexico and India. Wandering eye is influenced by visits to the souk and local markets to uncover all of their hidden treasures—vibrant fabrics, pierced lanterns, painted wood, carved talisman. Combining these elements, the feel is strikingly colorful, with bold geometric shapes and even bolder color palettes. Metallic accents, painted wood and recycled fabrics make this trend feel exotic and eclectic.

Hygee fresh. Hygge (pronounced “Hoo-Ga”) is the Danish art of happy living. It embodies everything that makes a home warm, cozy and inviting to friends and family. This trend incorporates a soft color palette and textural elements that exude a sense of inclusiveness and nesting.

Two area rugs inspired by these trends recently received Magnificent Carpet Awards for Best Design in the Hand Knotted/Flat Weave category (Karuna design from the newly introduced Om collection), as well as the Outdoor category (Toluca in Iris from the Xanadu collection). In addition, variations of these trends will be utilized across a newly developed offshoot—Couristan Rug Studio—set to launch later this year.

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Surfaces Ceramic Coverage: Tiles go bigger, colors stay neutral

February 5/12, 2018: Volume 33, Issue 17

By Nicole Murray

 

One thing still seems to be true regarding the tile trends at this year’s Surfaces: the bigger the better. Large slabs with infinite design possibilities due to printing technologies were seen all over the showroom floor in varied thicknesses. These new slabs are available for floor, wall or countertop applications.

Roy Viana, Dal-Tile’s director of slab and natural stone tile, raved about Daltile’s Panoramic porcelain series. The series’ larger tile formats, which include a 10 x 6-foot tile, provide a cleaner, monolithic look. Industrial Panoramic comes in four colors, while Elemental Panoramic is available in seven colors that mainly revolve around shades of white with marble imitations. Tiles for both of these collections are available in varied thicknesses including 12mm, suitable for countertop applications, and 6mm, ideal for floor and wall applications.

“We had to go bigger because peoples’ kitchen islands are growing larger and their surrounding counters have larger wrap-arounds,” Viana explained. “Within this collection alone there are various color and texture options for just about any look to be achievable along with the durable and long-lasting benefits of porcelain.”

Some of Daltile’s other offerings include Emerson Wood, a wood-look tile with subtle wire-brushed effects in 6 x 48, 8 x 48 and 12 x 48 formats. The large format tiles also feature Daltile’s innovative StepWise technology for improved slip resistance. RetroSpace is a translucent-glazed wall tile that reflects light in spaces and can be mixed with other tiles designs. There is also Chord, a cement-look offering available in a floor tile, 12 x 24 decorative accent and 3-inch triangle mosaic.

Also from the Dal-Tile family of brands, Marazzi is launching D_Segni this spring, which offers a classic reinterpretation of traditional handmade cement tiles. The product will be available in an assortment of colors and decorative accent tiles that can be used individually or mixed together. D_Segni is available in an 8 x 8 floor and deco tiles. Hawthorne is one of Marazzi’s new wall tiles available in an 8 x 24 large format as well as 10 x 14 and 4 x 12 versions. Colors include monochromatic shades of white, taupe and gray in two types of construction: smooth flat surface or beveled edge. Arenella, another introduction, presents the illusion of marble with soft natural tones. It is available in a variety of sizes for floor and wall applications as well as a 2 x 2 mosiac dot-mounted on a 12 x 12 sheet.

American Olean, another Dal-Tile brand, highlighted three of its new spring collections. Union offers an authentic interpretation of time-worn, weathered concrete factory floors. Designed with StepWise technology, Union touts improved slip resistance. Windmere provides smooth concrete and weathered stone looks in a monochromatic color palette. The collection features a full assortment of floor and wall sizes including a mosaic and jolly trim. American Olean’s third collection, Visual Impressions, offers a contemporary and fashionable wall tile in neutral colors and 3D patterns.

Other manufacturers are also taking advantage of the latest printing technologies. For example, Del Conca showcased its Boutique collection—a marble-inspired porcelain series available in four colors. The collection was also just released in 48 x 48 panels.

“The bigger face is so much easier to sell and offers a rustic charm with the dark brown and taupe options,” said Kendall Litton, marketing specialist, Del Conca. “There are visible veins where one could truly be fooled into thinking this is a marble product.”

Among Emser Tile’s product debuts was its Porch collection, a porcelain plank printed in wood patterns with color variations in each individual piece. The collection comes in four colors, but the plank’s “cutting-edge” attribute is its wide range—6 x 47, 8 x 47 and 12 x 47—a variety that allows for staggering patterns when various widths are used side by side.

“The [ability to] mix and match the widths along with the color variation allows for experimentation with light and dark colors as well as patterns and shapes all in one material,” said Barbara Haaksma, vice president of marketing, Emser Tile. “You have the option to use only one size panel for a more uniform look, but that would not be taking advantage of all this collection has to offer.”

The manufacturer’s other offering, Façade, is a cement-themed collection that is combined with a plaster effect to give the tile a much softer, more pleasant feeling. This collection, which can be used for interior and exterior applications, is available in four colors in two panel sizes: 12 x 24 and 18 x 36. As Christine Wu, product development manager for Emser Tile, explained, “We are building on the concrete trend but offering a more welcoming texture, which is something you don’t see very often on the market these days. These colors are so understandable and very diversified.”

Lindsey Waldrep, vice president of marketing, Crossville, said the manufacturer’s new porcelain stone tile collection, Java Joint, exemplifies the continuous need for fresh designs that play with the basic neutrals. Java Joint is available in 12 x 24, 2 x 2 mosaic and is offered in five different colors. “The colors of this collection are all warm and comforting—similar to the feeling of a coffee shop,” Waldrep explained. “These colors give you flexibility but have just enough edge so your final design looks new and fresh.”

On the topic of flexibility, Dal-Tile’s Viana added that white continues to be one of the best-selling colors within the tile industry because of its ability to balance with the other patterns or designs. “White will always be a best seller,” he said. “Now consumers can have an easily maintainable product that offers a clean and chic look but will complement these bold and more accent-like designs for a nice, easy balance.”

 

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Surfaces Resilient Coverage: Innovations aim to add simplicity to the buying and selling process

February 5/12, 2018: Volume 33, Issue 17

By Lindsay Baillie

 

There’s a common thread among the plethora of new resilient flooring products introduced at Surfaces: They all aim to make it easier for retailers to sell and consumers to understand.

A majority of the manufacturers at the event noted that the resilient market is saturated with products—a phenomenon that can cause confusion for distributors, retailers and consumers alike. To address this issue, manufacturers are providing retailers and distributors with updated styles and newer product constructions in conjunction with greater education, explicit branding and unique product stories.

Education and innovation was a focal point of Karndean Designflooring’s 2018 introductions, which entailed new SKUs across three formats: glue down, loose lay and rigid core. The ultimate goal, the company said, is to encourage retailers to rethink flooring. “We’re trying to get retailers to see flooring differently, design flooring differently and specify flooring differently so that they have a way of making more margin and really beating out the competition,” said Emil Mellow, director of public relations.

Part of rethinking flooring involves a complete understanding of how Karndean’s products work together to create designflooring. “With our new SKUs, we’re trying to push design differently,” Mellow explained. “For example, with Korlok, we tell retailers you can blend SKUs.”

Mohawk’s new sheet vinyl lineup is bringing awareness to a product category that has consistently been losing market share to LVT, WPC and SPC. According to Angela Duke, senior brand manager, Mohawk, the company still sees a market for sheet vinyl and so should retailers. “This is one of the most durable floors. It is one of our highest margin products because of its lower price.”

Mohawk’s new sheet vinyl features a new technology called ClearGuard, which aims to show consumers how easy it is to clean the product. Duke explained dealers should also take advantage of the product’s waterproof qualities. “We’re seeing a lot of push for this product in different areas such as laundry rooms, basements and bathrooms.”

Educating dealers on product features is also a key point for Forbo. The manufacturer’s Marmoleum with click cinch lock is available in a wide array of colors, allowing retailers to offer consumers something out of the ordinary. What’s more, dealers can mix and match the square and plank formats to create unique flooring designs. “What if you could get a click product that is easy to install and with more vibrant colors?” asked Tim Donahue, residential national sales manager. “You’re not going to get these colors in an LVT.”

Forbo has also added FlowTex to its product portfolio. To create the texture of FlowTex the product is “flocked,” a manufacturing process that combines a PVC backing, a layer in between and an adhesive on top, followed by a magnetic charge that activates the product. Once the product is dried, it becomes  impenetrable to water, Donahue said. “FlowTex is a textile version of a resilient and is actually closer to a hard surface than a carpet.”

Fusion, the distribution division of USFloors, is focused on educating its customers on the positives of doing business with the company. “We offer completely different colors and SKUs than USFloors,” said Jim Nielsen, vice president of sales. “We cover all of the bases with this category, and we’ll stay at the very forefront of technology and give our distributors service and compassion.”

The company’s two investments for 2018 are its enhance bevel WPC and SPC. “These are higher end, design-focused products,” Nielsen explained. “They’re very realistic looking compared to what we’ve had in the past. We’ve also attached a pad, which provides more comfort and is sound deadening. Distributors will be able to get more premium price on these products than what is out there.”

Happy Feet also emphasized the importance of educating the retailer on the benefits of partnering with the right manufacturer, going beyond product specs. In addition to the company’s new products such as Blockbuster and Gladiator, Happy Feet boasts competitive pricing, shipping within 24 hours and unmatchable inventory. “We want to help retailers make money,” said CJ Johnson, sales.

What’s in a brand?

Some manufacturers introduced new products at Surfaces that aim to help strengthen brand recognition in consumers and make it easier for dealers to better identify products in a saturated market. Case in point is Armstrong, which is looking to leverage its Diamond 10 technology to create brand awareness with consumers. “We’re pushing our Diamond 10 technology, which is a differentiating factor,  to bring consumers into retailers’ stores,” said Morgan Hafer, product manager for Alterna. “It’s being used in shows on HGTV and throughout social media to [drive] brand awareness.”

EarthWerks is also using its branding to make it easier for retailers to distinguish between different sizes of products. The company showed Noble Classic Plus and Plus XL as well as Parkhill and Plus XXL. Plus XL and Plus XXL represent thicker, longer versions of their respective lines.

“At EarthWerks we say style, availability and service you can trust,” said Lindsey Nisbet, strategic marketing and product development. “Our style is getting better every year; with respect to service, we have some of the best distribution.”

Quick-Step and IVC are also making it easier to identify their resilient products. Quick-Step has updated the products it sells to focus less on the product lines and more on its attributes. The company is now using the term “EnduraTEK” for its resilient products. “We consider resilient as the entry into hard surface,” said Jason Sims, senior brand manager, Mohawk Industries. “All of our flexible product is called EnduraTEK. As you trade up, the rigid offerings are called EnduraTEK Ultra.”

Quick-Step is doing its best to provide distributors with better and best offerings within the resilient category. “What we’re featuring this year is the ability for them to trade up within the category from flexible to rigid,” Sims said. “We are also offering for the first time flexible LVT tile that has a hidden grout line. You can mix them and it quickly installs. These are all available on one display as well.”

IVC is updating its brand to reflect the resilient category. The company showed its new Artera and Millright lines, both sheet vinyl, as well as Urbanne, its new flexible tiles. Sims explained that the word “resilient” not only describes the category, but also highlights what the segment can ultimately provide consumers. “We have positioned our brand as uncompromised design for life. We bring a different design element to everything we do.”

While some companies are promoting various product names to drive brand recognition, others are looking to better leverage their own corporate identities. DuChâteau, primarily known for its innovations in hardwood for flooring and wall applications, has expanded its reach to include luxury vinyl plank products. “We conducted extensive research with designers, architects, contractors and homeowners to see where they wanted to go with more luxurious and distinctive flooring designs,” said Misael Tagle, CEO and co-founder of DuChâteau. “The craftsmanship and fashion-forward designs of our new collections meet their needs.”

The manufacturer’s new Atelier Series’ Sovereign edition features the sought-after signature aesthetic of European-style exclusive designs in a glue-down vinyl plank. Then there’s the Vinyl Deluxe Grand collection with LuxCor technology, followed by the Vinyl Deluxe Classic collection. Rounding out the offering is the American Guild collection, which features classic colors and a contemporary American design aesthetic with the realistic look and feel of wood and stone.

Congoleum is looking to take branding a step further with the creation of CLEO Home—a separate, standalone brand that features healthy and environmentally conscious flooring. According to Kurt Denman, chief marketing officer and executive vice president of sales, CLEO Home is intended to help consumers who might be struggling with design confidence.

“We wanted to create something from a designer standpoint that really appealed to the consumer. We have great brand recognition with Congoleum, with our legacy products. This new foray into the marketplace is a great way to connect with the next generation.”

CLEO breaks down into three different layers. The base is 85% limestone and the other 15% is a binder that is not made with PVC. The top layer is digital imaging with a high-performance coating. “When you get rid of PVC you get rid of plasticizers, phthalates and all the things that are perceived as negative words in the industry,” Denman explained. (Incidentally, Congoleum was honored for a Best of Surfaces award in sustainability for CLEO Home.) “This product is 100% manufactured in the U.S., so we’re not relying on print films shipped from China.”

A compelling story
Manufacturers are not only developing unique product stories to help differentiate offerings, they are ultimately providing retailers with product education and strong brands. Mohawk, for example, has updated its campaign for SolidTech to play up the product’s resistance to hurricanes. As Duke explained: “We have a good story from a builder in Dallas who put SolidTech in one of his model homes; after the hurricane hit the dealer was able to salvage the floor in the model home, clean it up and reinstall it without any problems.”

Armstrong has developed its own story for its Alterna plank product—an engineered tile now available in a 6 x 36 plank format. “We call it Alterna because it is an alternative to ceramic and tile,” Hafer explained. “The story behind engineered tile is its more durable and comfortable to live on and easier to install than real tile. Alterna plank also features our Diamond 10 technology.”

Product story is also key to Beauflor’s new introductions, Blacktex and Boardwalk. The former is a roll product that can also be merchandised with boards and marketed as either a sheet vinyl or LVT product. The textile backing provides users with some of the benefits and features of LVT. Meanwhile, Boardwalk is a rigid click, loose-lay product with an attached pad.

“Our Blacktex sheet product is really the original waterproof product,” said Johnny Barnes, general manager. “If you look at the top layer, you can achieve some of the visuals with this line that you can’t necessarily achieve with the WPC products.”

Boardwalk, initially available in 14 SKUs, is equally rich in terms of aesthetics. “We have several dimensions and three SKUs that are random width,” said Nick Brown, vice president of sales North America. “There are all these different products within the collection, but they’re all at the same price point.”

Raskin Industries’ Ceramix, the company’s built-in-grout, loose-lay LVT, has its own story—one built on ease of installation. According to the manufacturer, the offering allows retailers to sell a grouted tile look without the headache of a typical tile installation. What’s more, Ceramix, which made its official debut at Surfaces 2017, earned a Best of Surfaces award for innovation at this year’s event.

Michael Raskin, founder and president, said the realistic look of the grout is a difference maker. “You can’t tell it is not ceramic, and with labor as a big issue in the market—the labor is sometimes two to three times more than the product—this can be put in with a perimeter install. It’s also warmer, slip resistant and doesn’t shatter.”

Novalis continues to push its environmentally friendly products with the development of Serenbe, a SPC product boasting high-density core technology, NovaShield coating and an attached pad. “Serenbe is ultra-realistic,” said Steven Erlich, vice president of sales and marketing. “There are ceramic planks and herringbone patterns to name a few. In addition, all of our products are pressed with a rolled edge, or groutable edge.”

Nox U.S. highlighted its new Genesis technology at Surfaces. The new line, the company said, creates a bridge between WPC and SPC products. ““WPC is growing for everyone but there are challenges with indentation and brittleness,” said Eric Erickson, senior vice president sales and marketing North America. “Also, everyone is chasing SPC but it’s really heavy and stiff. What we’ve been able to do is develop new technology in our core so that it is a little less dense and as you move up layers it becomes denser like a rigid product. This is an 8mm product and it feels the same weight of WPC but has the performance of rigid.”

Mills flood the arena
Engineered Floors, previously a carpet-only company, officially debuted Revotec, a high-density, rigid-core floating floor featuring tile visuals with a realistic grout line embedded; and Triumph, a click floating floor that employs high-density core technology for improved dimensional stability and better indentation resistance. “Our plan is to be a player in this segment,” said Brandon Kersey, brand manager for Main Street commercial and hard surface. “We are transitioning to the new version of rigid core, and we think Revotec can take us to another level.”

The acquisition of Beaulieu’s assets helped EF enter hard surfaces since the former company was already in the WPC space. Ana Torrence, product manager, hard surfaces for EF, said Revotec looks like real grouted tile. She cited other advantages: “It’s a really fast install. It is a better alternative than stone or ceramic in terms of installation time.”

A year after entering the LVT category, Phenix Flooring is doubling its assortment of PetProtect LVT, rigid core, click and loose lay offerings. In 2018, Phenix will market two display fixtures that blend hard and soft surfaces. The fixtures were consolidated into smaller footprints to provide design flexibility and allow every SKU to be merchandised differently. “We’re a year into hard surfaces, and I can tell you we are committed to it,” said Mark Clayton, president and CEO.

Marquis Industries made its mark 10 years ago as a mid-sized mill that ventured into LVT.  The company did not enter the category for the sake of it; its executives traveled the globe extensively to source the right raw materials and ensure quality control was followed along the way. “When you spend half a million bucks on an opening order you better be right,” said Larry Heckman, CEO. “If you don’t anticipate it correctly, you can be out of stock three to four months and you never get caught up. We took it seriously.”

Marquis’ 2018 offerings include two 5-foot-long x 9-inch wide rigid core lines—Whispering Pines and Biltmore Classic—with a 20-mil wear layer. The Dalton-based company opened a new building in Georgia devoted entirely to hard surfaces. It also has an existing West Coast distribution center to service customers. The mill still maintains a two-thirds to one-thirds split in favor of carpet.

The Dixie Group began as a yarn company that transitioned into a carpet manufacturer that is transforming into an all-surface supplier—all the while doing it in a way that best represents the Dixie, Masland and Fabrica brands. In 2017, Dixie was one of two companies (Phenix was the other) licensed to sell Stainmaster PetProtect LVT products. The launch exceeded expectations and now Dixie and Masland are coming out with eight new styles each for high performance core, including wood planks with a painted beveled edge.

“A lot of our good customers were moving with the market into hard surface categories like luxury vinyl and we felt like we had an opportunity to enter that market and could be relevant,” said T.M. Nuckols, president of the residential division, the Dixie Group. “We tried to take the right approach from a distribution standpoint to create a profit opportunity for our partners.”

Southwind is another traditional carpet company that made the leap when LVT got hot. The company unveiled Authentic Tile, an SPC core product that has the feel of ceramic tile along with the heft (each 8-piece carton weighs 40 lbs). “It has been very well received at the show,” said Tim Gilmore, Southeast regional vice president. “Several big dealers are taking it on.”

Wellmade Flooring is pushing its Opti-Wood Flooring line with Hydri-HDPC technology and the PowerShield moisture protection system, which company officials say is the difference maker. Wellmade showed 16 SKUs in poplar, eucalyptus, hickory, oak and bamboo. Steve Wagner, director of sales and marketing, does not believe the LVT/WPC/ SPC market is saturated just yet. “I think there is a home for everybody who can come to market with different formulas.”

 

COREtec Stone: The next big thing?

By Ken Ryan

Piet Dossche knows a winner when he creates one. Five years ago, despite serious doubts from some well-respected retail executives, the USFloors’ founder and president launched COREtec and predicted success. He got it—in spades, helping to launch a category that has surpassed $1 billion in sales.

“People said it wasn’t going to work,” he recalled of COREtec. “I was saying, ‘Good, keep thinking like that.’” COREtec was a runaway hit and helped launch the breakout success of the LVT sub-segment.

Dossche has similar expectations for COREtec Stone, which the company showed at Surfaces 2018 as an alternative to ceramic and porcelain tile. The product—a composite/SPC engineered tile—is expected to be ready for market in the second half of 2018. “This is going to be huge,” Dossche said. “It is going to bring solutions to the ceramic tile category.”

Ceramic tile is a growing business, but it has issues. For starters, ceramic tile is heavy and may not be appropriate for certain installations; it is cold and can crack or break easily; it is a time-consuming installation process, and it is also an expensive installation with special tools needed, critics say. Sometimes the cost of the installation is more than the materials. It is also messy and expensive to remove ceramic or porcelain tile.

Enter COREtec Stone, which is lighter, warmer, cheaper and easier to install with no grout needed, easier to remove and more comfortable to walk on because of its attached cork backing. Plus, it doesn’t break.

Dossche, who believes this segment could grow to be a $500 million business in a few years, is optimistic. “If you bring to market a good-looking product that solves issues you have a winner. Composite weatherproof flooring will be the high double-digit growth engine in hard surfaces for the next five years.”

 

 

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Surfaces Wood Coverage: New finishes, formats steal the show in Vegas

February 5/12, 2018: Volume 33, Issue 17

By Reginald Tucker

 

Hardwood flooring suppliers across the industry are combining creativity and technology as they seek to develop the next generation of products that will compete against the likes of WPC, LVT and rigid core floors.

Case in point is the staining technology employed by Hearthwood in the manufacture of its Controlled Chaos and Dynamic Earth lines. Designed to mimic a process known as reactive staining—whereby chemicals are used to manipulate the visual appearance of a hardwood floor—the technology Hearthwood employs is able to produce more consistent results. As Allie Finkell, executive vice president, explains: “Some of the chemical reactive staining processes are really hard to control, making it difficult to be consistent across production over time and from run to run. But we’ve been able to recreate the highlights of those chemicals utilizing a regular water-based UV-cured stain, which is done in our Tennessee plant with low-emitting finishes.”

Controlled Chaos features a light wirebrushed finish on white oak for a more contemporary look in a 7-inch-wide x 8-foot-long format in colors ranging from, in Finkell’s words, “shocking to subtle.” Meanwhile, Dynamic Earth, which is also in a sliced white oak product, has more of a reclaimed, scraped texture. “Our handscraping technique is not the old, machine-scraped process that’s common in the industry,” Finkell explained. “Our process delivers more of that reclaimed barnwood look. This way the customer gets a modern format in long lengths and wide widths, but she can still pick a timeless color so she’s not going to get sick of looking at the color.”

The latest offerings from Provenza also represent a play on color and texture. Several new additions are being added to the Lighthouse Cove line, which is part of the award-winning Colour Nation collection, which took home a Best of Surfaces award in 2017.  “We are bringing in white oak product from Europe in a format and range that appeals to all levels of consumers,” said Ron Sadri, principal owner.

Also new from Provenza is the Dutch Masters collection—a portfolio of unfinished European species that are stained at the company’s facilities in the U.S. “Dutch Masters falls under our custom collection category, which is exclusive to us,” Sadri said. “These products provide better margins for dealers; it’s not going to be in every store and it’s very exclusive.”

Other European-inspired lines come courtesy of The Dixie Group, which showcased its first hardwood line, Fabrica Fine Wood Flooring. The Fabrica collection will feature 70 SKUs—40 for the floor and 30 companion SKUs for wall covering. The line will include French oak, maple and birch—with a style and quality consistent with the Fabrica brand promise, said T.M. Nuckols, president of the residential division of The Dixie Group. Each flooring panel features the letter ‘f’ for branding purposes. “We are sourcing the product both domestically and in Canada and Europe to create the assortment,” Nuckols said.

The Fabrica wood line will be launched initially in the Southeast U.S., and will be priced at the upper end of the market. “We are restricting distribution—not everyone is going to have it,” said Dan Phelan, vice president of marketing, residential division, The Dixie Group. Those that do get the line will primarily be high-design retail flooring stores. “We feel the wood line fits for Fabrica because it is consistent with the high-end quality of Fabrica’s name.”

HF Design is also playing the quality card, but with a twist—making its floors more accessible to mainstream consumers. To that end, the company took the wraps off two new collections: Pacific Point, a 7⁄16, 3⁄8-inch, 6-inch wide product that’s thermotreated and topped with a  urethane finish, and Brentwood Hills, which is a step up 5⁄8 platform, 7 inch wide.

High-end looks at an affordable price was also the inspiration for the latest offerings from USFloors. While its name may be associated with the wildly successful launch of the COREtec brands, USFloors wants retailers to know it is a bona fide player in the hardwood sector as well. To that end, the company is unveiling a total of 56 SKUs across various collections and formats.

“Our biggest launch right now is our Natural Woods line, where we took some of our best-selling products in the Castle Combe oil finished lines an put an acrylic finish on them,” said Jamann Stepp, director of marketing and product management. “You still have that oil finished look without all that gloss in there.”

EarthWerks, historically known for its LVT offerings, is also looking to make some noise in the hardwood arena. The strategy, according to Brenda Cashion, who heads up hardwood product development and marketing, is twofold: Expand EarthWerk’s wood program beyond Texas into other markets around the country, while positioning the Pinnacle brand as an upper-end “designer” offering.

“The EarthWerks hardwood brand has always been in our distribution footprint paired with the LVT teams,” she explained. “Now we are taking a select group of products nationally. We had to reengineer and redevelop those products to give them a broader appeal nationally.”

Whereas EarthWerks wood is being positioned as the “meat and potatoes line,” Cashion said, the Pinnacle offering will be positioned as a high-style designer driven. Standouts include Country Estate, which features a natural, almost unfinished, matte look, and Grand Reserve, which is a hefty 4mm dry-sawn face with a suggested retail price point of $5.99 per square foot.

Over at the Satin Flooring space, the company put the focus on red and white oak species in a 7-inch-wide format, mostly engineered. “We’ve been happy with the feedback,” said Dennis Mohn, director of marketing. He cited interest from top distributors such as NRF and Galleher “We also sell some unfinished solid products to certain markets such as Chicago.”

New formats are also coming out of the Preverco camp. The company is putting the spotlight on Max 19, a ¾-inch thick engineered product featuring a 4mm top wearlayer on a ½-inch-thick vertical quartersawn softwood core, backed with a 2mm bottom panel for balance. Right below that is a 5⁄8-inch thick engineered product featuring a 2mm top layer on a 9⁄16-inch five-layer construction. range of budgets.

Wading into water
SEM Group showcased Aquawood, the company’s waterproof hardwood line. The product is patent pending in 14 countries and features real hardwood on a waterproof core. “Not only is it waterproof, but it’s also great in extreme climates,” said Nathan Carter, product sales/development and hardwood specialist. “We have two versions available: Elegant Traditions is our 7½- inch wide 3⁄8 product and we just launched Carson—our 5⁄16 overall with a click and pad attached.”

Both versions are fully submersible in water and can be maintained just like tradition hardwood floor. What’s more, the products contain zero repeats.

In that same vein, Uniboard offers Aqua Allira, a waterproof engineered wood flooring made of a rigid core and a real veneer overlay. According to Daniel Seguin, product development manager, it marks the next generation of Allira engineered flooring, which produced by transforming 100% reclaimed pre-consumer wood fibers into a coreboard. Allira products use specially-formulated HDF panels that offer greater resistance than a plywood core, he noted.

Focus on green
Suppliers are also leveraging wood’s environmental story. For instance, Lifecore has developed a unique selling story to help retailers increase margins. Lifecore created Ai.r with no added formaldehyde to its adhesive, According to Jim Fiore, vice president North America, Samling Global USA, the product is 70% below the current CARB 2 regulations. “We’ve also been awarded the Indoor Air Quality Certification which is unique and we’re proud of that. Our focus when we were launching this line was giving the retailer something that would be of value to them and have a story behind it. With this line, it’s all about not having to compromise.”

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Surfaces Carpet Coverage: Despite hard surface surge, mills double down on soft

February 5/12, 2018: Volume 33, Issue 17

By Ken Ryan

 

Traditional carpet mills invariably face this decision: Do we ride the hard surface tide and introduce our own products, or do we stick to our knitting and stay soft?

Surprisingly many are choosing the latter, and they are not apologizing for it. While Dixie Group, Phenix Flooring and Marquis Industries expanded their hard surface assortments at Surfaces—while Engineered Floors officially entered the category—many are passing on the opportunity to jump on the bandwagon.

“We make no bones about it, we are soft flooring,” said Brian Warren, executive vice president of sales and marketing for Foss Flooring, which showcased carpet tile and indoor/outdoor broadloom under a “carpet reinvented” theme.

The way Warren sees it, Foss’ business is good, so why disrupt the flow? “Our tile business has grown double digits each year for the past six years. Our tile business is through the roof. We have some unique technologies and have found a way to position these technologies in such a way that retailers get the advantages.”

Foss introduced DuraKnit, a broadloom line that can be installed over pad. “We’re selling $40 looks for less than $6 with a great performance story, a product that won’t fray, wrinkle or unravel. We’re pushing the attributes that only we have. We’re screaming that it is carpet reinvented. Bottom line—we love giving retailers a selling story they can position against competitors.”

Stanton is another mill sticking to soft surface. “Not now. You can’t do it just to do it,” Jonathan Cohen, CEO, said when asked if the company was contemplating a move into hard surfaces. “We are way too protective of the brand to do that.”

Stanton, which is introducing 125 soft surface products in 2018, is entering the commercial Main Street market through Stanton St. Decorative Commercial. Stanton Street is located in the Soho section of Manhattan, near the location where company founder, Sy Cohen, grew up. “We always liked the idea of getting into commercial but it had to match our identity,” Jonathan Cohen explained. “This fits for us. We can be competitive with price, and as long as we stay decorative we feel like we can have a place within the market.”

Couristan has been a soft surface company for 92 years and has no plans to deviate from that course. That’s according to Len Andolino, executive vice president–residential division, who rejoined the company last fall. “We are a soft surface company, that is who we are. The hard surface [surge] has actually helped our business. For example, our broadloom business is heavily fabricated. More than 50% of our business will be fabricated rugs. We’re pushing the envelope with the fabricated rug business.”

Southwind, a carpet and hard surface supplier, focused more of its efforts on soft at Surfaces with six new LCL patterns and six new colorpoints using its soft yarn system. “People are starting to talk about carpet again,” said Tim Gilmore, Southeast regional vice president. “With this new line we wanted to give dealers some options over the typical beiges and grays.”

Prestige Mills is another tried-and-true soft surface company with no plans to make the leap to hard surfaces. But like so many other mills Prestige is looking to leverage the growth of hard surfaces. Peter Feldman, president, said a good deal of its broadloom business ends up as rugs, in some cases cut by their dealers after shipping. “While cutting broadloom carpet into rugs is good for the rug business, you are only using part of the room with rugs, so more carpet is required if you are going to go that way,” he explained. “It is a challenge, but we are up for it.”

Surfaces 2018 marked the return of Gulistan, which went under in 2012 but has been resurrected by Lonesome Oak. John Sheffield, recently of Godfrey Hirst, has taken over as vice president of sales. Tom Mathis, most recently with Lexmark, serves as strategic sales director. The strategy going forward, Mathis said, is to focus strictly on broadloom and to be selective with retail distribution. Its lineup of 20 products is divided equally between Stainmaster offerings and solution-dyed PET. “We are pretty careful who we are partnering with,” Sheffield said. “We are looking for meaningful partners who can grow the business.”

The return of this venerable brand was well received at Surfaces, Mathis said. “Not a single person said, ‘Oh, I don’t want these guys again.’ The Gulistan brand has more equity than we ever imagined. It’s pretty synonymous with Stainmaster, so that is a plus. And despite the fact carpet is losing share, we are a breath of fresh air and we are starting with a clean slate.”

Crossover continues
Long-established carpet mills that have ventured into hard surfaces and, in some cases, expanded their offerings, have not given up on soft surfaces. Quite the contrary. Phenix, for example, introduced 25 new residential carpet products–PetProtect and polyester—and announced its entry into the area rug business under the Cleaner Home Rugs banner. “We all know carpet is the largest category, and we are expecting carpet to lose share again,” said Mark Clayton, president and CEO. “Our challenge is to keep producing unique stories around the products. The business we are serving—what we call the belly of the country, states like Oklahoma, Texas, Colorado, Utah—is still very strong in carpet.”

Clayton said the jump into rugs is a nod to the explosive growth of hard surfaces. “With so many beautiful patterns in our line this is just a natural addition to what we are doing for hard surfaces.”

The bedroom remains one of the last bastions for carpet in the residential sector, and consumers have shown a willingness to spend more for higher-end goods. To address that trend, Dixie Home launched several Stainmaster offerings with differentiated PetProtect loops and patterns as well as some multi-colored textures. “We think the consumer is buying carpet by the room, not by the whole house, and that leads to better opportunity for better goods,” said T.M. Nuckols, president, residential division, The Dixie Group. “The market is looking for better goods and products that work well with hard surfaces.”

The Masland brand showed new PetProtect collections as well as Masland Energy, a broadloom and tile program for the commercial segment for retailers targeting the upper end of Main Street.

Mills agree Main Street commercial is hot these days. Engineered Floors’ Pentz brand of broadloom and modular tile is keeping pace with several new products, including some from the former Beaulieu’s commercial division. EF’s new 500,000-square-foot carpet tile plant will be in full production in the next few weeks and has already been graded for expansion.

At Surfaces EF touted PureBac, its premium, no-latex backing system. “The dealers say they can get more money on it,” said Will Young, director of national accounts. “PureBac offers a complete story on cleanability, with no latex and a hypo-allergenic face fiber. It is a very installation-friendly product.”

 

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Economics: 2018 looks strong; possible bend in the road for 2019

January 22/29, 2018: Volume 33, Issue 16

 

 

One of the highlights of the annual North American Floor Covering Distributors convention is the economic overview from ITR Economics, one of the most accurate forecasters in the country. This time around it was Brian Beaulieu, one of the company’s two principals along with his twin brother, Alan, who gave an upbeat forecast for the next 10 years.

What follows is a synopsis of the 90-minute presentation in Beaulieu’s words…

The future looks good as the economy continues to grow. We still see softness in 2019 that you can manage through. We see the first three quarters of 2019 being flat and then the economy begins to rise in earnest in the fourth quarter and into 2020 and 2021. We are not anticipating any significant recession in the next four or five years.

Given that we see a lot of growth in our future, given that interest rates are still so cheap, given that we have a labor shortage to contend with, you should take advantage and invest in your businesses today. The No. 1 problem we will face for the next 13 years is a labor shortage. Attracting and keeping talented people will be the bane of our existence. Invest in technology and equipment that will alleviate your need for labor. This is a global phenomenon.

Politics
Republicans believe the economy does better when a Republican is in the Oval Office. Democrats want to believe the economy does better when a Democrat is in the Oval Office. Warren Buffet said, “Red or blue, I can still make green.” Stop worrying about who is in the Oval Office. What you do every day in your office matters far more than what they are doing in Washington.

Tax cuts
If you think the tax changes is something that will knock the socks off the economy, we don’t see it that way. Go about your business with the hand you’ve been dealt. Stop relying on a tax break to make things better. If you think deregulation has helped you, more power to you but that can be changed with the next president. Stay focused on the business of your business.

Stock market
The stock market is going up because corporate profitability is on the rise. However, it is relatively expensive. If you put fresh money into this stock market now your average rate of return for the next five years will be between 1% and 2%. The best thing to happen would be to see the market pull back. A 10%-15% correction would be beautiful. You can’t time this market in terms of the lows and the highs, but you can decide when to put in fresh money. Be patient. Now is not the time.

Trade
Contrary to popular belief, trade is important to the U.S. And if you throw trade barriers to stop imports you will also end up hurting exports. Sixty percent of our exports are manufactured items. Manufacturers will feel this pain more deeply. We are still one of the world’s pre-eminent manufacturers, but we also are in need of being able to sell our wares abroad.

Global picture
The world’s total GDP is $65.278 trillion; the U.S. comprises 24.7% of world’s economy. China is 14.9%. How long will the U.S. remain No. 1? When will China overtake us? The reality from an economic perspective is the U.S. will be No. 1 for the next 100 years. Why? Three factors:

  1. Demographics. A growing population ensures organic economic growth. We have a growing population in the U.S.; China does not. Every 13 seconds the U.S. net population (birth + immigration – death) increases by 1. India is another country that has a positive demographic trend.
  2. Natural resources. You have to own your natural resources if you will thrive during a period of inflation like we are moving into. The U.S. is blessed with natural resources; China has a relative paucity of natural resources. You have to get to India before you find another country strong in natural resources. Brazil, Canada and Mexico are strong but have negative demographics.
  3. Rule of law. History shows private property rights is essential to long-term growth. Also, intellectual property; if you are going to be an innovative, creative society and economy, you have to have the intellectual property. And bankruptcy law; you have to be able to fail forward. You have to be able to come out from underneath, make mistakes and try again.

The only country that wins on all three of those scores is the USA.

Housing
This is a tale of two stories—single unit and multi-family. Single unit starts is a rising trend that will generally last until 2029-2030. It is not a continuous rise and will stall from time to time, but it won’t be like the Great Recession.

Buy urban because people are going urban. That’s where baby boomers want to live. And at least 40% of millennials now say they want to go there. It’s the one place where the supply will be less than the demand going forward. People also want to live near water. So buy in an urban area, high up where you can see water or be on the water. That’s the trifecta. There are 100 million more Americans coming at us between now and 2050. They all are going to want someplace to live. You may as well own that place.

You want to sell most of your real estate off in 2029-2030. We think that next decade will be one of deflation, and you don’t want to be stuck holding that property.

Multi-unit starts is a different story. Don’t expect anything good during the first half of 2018. Be careful about this segment of the market. Rent growth is 2%, barely keeping up with inflation.

Home prices are going up. That trend will largely continue until 2029-2030. The only thing that can upset this trend is if they repeal Dodd-Frank. That would stop home prices from growing. This would be good for the economy and a blessing for the financial industry but disruptive to this trend.

Bond market
The bond market is bigger than the stock market. This market looks forward 18-24 months. Much more dollars are involved globally. The bond market looked at the election, looked at Trump’s promises and decided interest rates needed to go higher. If you are going to exacerbate the labor shortage by restricting immigration, then labor cost will go even higher. If you are going to cut taxes without cutting spending, the national debt will go up. International debt, inflation and the bond yield goes up. It was the same thing when Ronald Reagan was elected president in 1980.

Certain forces back then gave us a declining trend. Globalization gave us deflation and declining interest rates. What’s the worldwide trend today? Protectionism. Trump is anti-globalization. That coupled with the propensity for inflation means interest rates are likely to go up. So the only rational thing to do is to borrow as much money as you possibly can to invest in your businesses, or buy wealth-creating assets. How much should you borrow? If you are sleeping through the night you have not borrowed enough money. Unless you are three to seven years away from retirement.

Credit
We are on a long, rising trend. Seventy years of history says debt does not take down the economy. The economy actually grows with consumer credit. It’s not about what the debt is, it’s how we are handling that debt. Don’t be afraid to extend credit terms to other businesses. Do your normal due diligence, but one of the ways you can increase market share and attract more business is through your credit offerings. This is a safe environment to do that.

Retail business
Sales are growing at a good, 3.8% clip. That is strong enough to ensure the economy will continue to grow through 2018. When retail sales drop below a 2%-2.5% growth rate, that’s when you start worrying about the economy. There is no need to worry.

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My take: Here’s what I’m thinking about today

January 22/29, 2018: Volume 33, Issue 16

By Steven Feldman

 

The year officially begins on Jan. 1, but it is not until the minute that the Mandalay Bay door police yield to the stampede of Surfaces attendees that I feel the year is in full swing. And with that, this is when I am often asked for my thoughts on the year ahead. So, to answer that question….

I’m thinking that barring any missile launches by “Rocket Man” in North Korea, 2018 is going to be a very strong year for the economy. That is the sentiment offered by the 99% accurate Beaulieu brothers from ITR Economics, who believe the next 10 or 11 years will be strong, save for a slight hiccup in 2019.

Love him or hate him, I’m thinking the Trump tax cuts will help this industry. Yes, they may favor the wealthy, but wealthy people buy homes, and people who buy homes more often than not replace flooring. And wealthy people buy better flooring. And better flooring means better margins. You get the picture.

I’m thinking this combined Anderson Tuftex brand will be a good thing for Shaw. The products are strong, particularly on the Anderson side, the best since Shaw purchased the company from the Finkell family. I just feel this is the first time they’ve committed real resources to the brand—and it shows.

I’m thinking at some point Mohawk will need to add hardwood to Karastan, its high-end carpet brand, in response to the aforementioned Anderson Tuftex initiative as well as Dixie’s hardwood launch into its high-end Fabrica brand to be unveiled at Surfaces. I remember Karastan prototyped it once, but that was before Mohawk owned its hardwood manufacturing. Makes all the sense in the world now.

I’m thinking that Domotex launching a U.S. show is a long time coming. I’ve said it for years—this industry needed an Eastern-based show in the winter. Informa tried it, but the fall timing of the event just wasn’t right. In 2019 it’s a month after Surfaces, but only because Atlanta plays host to Super Bowl LIII. In 2020, it’ll only be one week later. Surfaces will certainly survive and thrive, but Southeast and Northeast attendance may take a hit if the suppliers support Domotex en masse.

Speaking of things long time coming, Jeff Lorberbaum being inducted into the Hall of Fame certainly falls into this category. FCNews recognized his accomplishments a few years ago as the fourth recipient of our Lifetime Achievement Award.

I’m thinking about this whole WPC/SPC avalanche. What becomes of traditional LVT as we know it? And in case you were wondering the difference between the two, as explained so eloquently by Piet Dossche at Carpet One earlier this month, WPC has a foamed up extruded core with built-in air pockets to provide optimal comfort, while SPC has a dense, highly filled mineral core that provides superior indentation resistance.

I’m thinking about the logic-defying growth of Engineered Floors these past eight years and what may lie ahead given how the company is now part of CCA Global and Abbey.

I’m thinking it will be strange going to industry events and not seeing Randy Merritt or John Godwin in the Shaw space.

I’m thinking about Mohawk’s new hardwood strategy where they will be offering solid wood, engineered wood and RevWoods to the consumer. What is RevWoods? Glad you asked. It’s revolutionary wood, a.k.a. laminate. Since laminate mostly comprises wood-based materials—and the word “laminate” is not favored by some consumers—Mohawk will market the line within the wood category. I will be watching how the retailer and consumer embrace it. But then again, few people clamored for Patagonian tooth fish on restaurant menus, but seafood lovers can’t get enough of Chilean sea bass. (It’s the same fish, folks.)

Lastly, I’m thinking about the resurrection of the venerable Gulistan brand under the auspices of ex-Godfrey Hirst exec John Sheffield. Surfaces is the stage for the brand’s launch, and it’ll be interesting to see how it differentiates itself.

See you in Vegas.