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Latest Beaulieu restructuring focuses on personnel, strategy

13062446_1184141704931465_9155659538196564321_nDalton—Beaulieu America has announced a new restructuring as part of its plan to prepare for “the next phase of growth” for the business.

Four new senior management positions have been created over the past few weeks. Michael Pollard, the son-in-law of founder Carl Bouckaert, was recently named president. He will lead the development and execution of the company’s revised long-term strategy.

Next, Stan Bouckaert has moved from his position as director of hard surfaces to senior vice president of special projects. In this role, he will provide counsel on Beaulieu’s new business strategy to identify and capitalize on new opportunities for growth. Mike Hoffman has been named COO, responsible for all manufacturing and distribution operations. Finally, Steve Hillis, president of Beaulieu Commercial, will also assume responsibility for the residential side of the business. In his expanded capacity as president of flooring, Hillis will be tasked with leading all sales activities, resources and reporting for both commercial and residential functions. “This is a very important and exciting time for our company as we revisit the way we operate to ensure we are best positioned for current and future success,” Hillis explained.

Karel Vercruyssen and Del Land will continue with their respective functions as CEO and CFO of Beaulieu America. “The board of directors and I have put a lot of time, thought and energy into these leadership changes to ensure we have the right people in place who are committed to the long-term success of Beaulieu America,” Vercruyssen said.

In a related move, Kevin Biedermann, who had served as executive vice president at Beaulieu America since July 2015, has left the company to pursue other interests.

This latest restructuring comes on the heels of the company’s recently announced plans to trim about 6% to 8% of its workforce—or about 320 people—over the next few months (FCNews, May 9/16). According to Beaulieu, the actions are being taken to improve efficiencies across the company’s various product lines while enabling the organization to leverage emerging opportunities in the flooring industry.

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Resilient: Sheet vinyl shows its resolve

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

By Ken Ryan

Screen Shot 2015-01-16 at 12.51.36 PMIf a rising tide lifts all boats, then perhaps the same truism can be applied to the vinyl category: The great success of luxury vinyl tile has raised the profiles of other vinyl products as well, notably the sheet category.

According to top executives, including Paul Murfin, co-CEO of IVC US, and Dan Natkin, senior director, residential products, Mannington, sheet vinyl has shown “nominal” (i.e., single-digit) growth in 2014. And while it may pale in comparison to the growth seen by LVT, sheet is still growing and has many viable applications, both residentially and commercially.

“Sheet continues to be one of the best values and is a practical product for PM [property management] markets,” said Rachel Lombardo, general manager, residential vinyl sheet, Armstrong.

Murfin went a step further, calling sheet “the best value in the business. For the young consumer out there who has no preconceived notion of what flooring is or does, and who is simply looking to put an attractive floor in her home, sheet is a great option.”

Natkin said sheet is an inexpensive remodel product that is ideal for people who are looking to spruce up their homes before selling it. “It remains a very viable product category. As a price/value proposition, it is probably the most affordable flooring category with the exception of carpet—and it is way more durable than carpet.”

Sheet has also gained momentum in commercial projects. As per Alan Fennell, director of hard surfaces, Beaulieu Commercial, “From a commercial viewpoint, due to the unprecedented success of LVT over the past number of years, clients are paying more attention to vinyl flooring options in general, and sheet vinyl is benefiting from this vinyl resurgence. Sheet has also improved dramatically in terms of visuals, quality and environmental aspects over the past number of years.”

Lombardo said the flooring market is being driven by products that install easier and faster, and, as such, sheet has become a viable option. “Sheet is a very practical product with high ease of installation and repair, and makes for an attractive alternative to flooring with the attention to high-end design.”

In terms of segments within sheet vinyl, Murfin noted that fiberglass would grow while felt is “relegated” to the single-family builder market that is driven by habit and price.

Seizing marketing opportunities

Screen Shot 2015-01-16 at 12.51.26 PMIn residential projects, home renovations of bathrooms, kitchens and basements are the primary areas where sheet is being installed. “Comfort underfoot, warmth and sound reduction are the main reasons sheet vinyl is seeing some resurgence in the residential space,” said Sophie-Tanya Lupien, vice president of marketing, residential, Beaulieu Canada. “Some of the newer visuals are amazing and very easy to maintain.”

Healthcare—including assisted-living facilities—is the biggest market for resilient flooring products on the commercial end, with sheet goods strongest in this particular sector. The reason, executives explained, is because of the specific and demanding performance requirements of the health care space. This has allowed a flexible, durable and green product like sheet—especially homogenous sheet—to make significant inroads. Homogeneous sheet is primarily intended for use in commercial and light commercial buildings, and is frequently installed in healthcare facilities because of its superior durability and high resistance to wear, cuts and stains. Additionally, the seams can be welded to seal out germs and moisture.

“We have been gaining market share in sheet because we are telling a story about the benefits of the product,” said Jeremy Salomon, senior product and marketing manager for the Johnsonite division of Tarkett. “You can use homogenous sheet in most every application. We are testing and pushing the boundaries of homogenous, and we are gaining a lot of market share as others chase LVT.”

Property managers are gravitating to sheet because the product performs at a value while being the most water friendly and clean alternative product available, Lombardo noted.

Introductions

Screen Shot 2015-01-16 at 12.51.18 PMAt Surfaces, Tarkett/Johnsonite will introduce a new line of Acczent heterogeneous sheet products, more than doubling the number of SKUs in the collection. Salomon said Tarkett/Johnsonite is taking advantage of the style and design capabilities of its Tandus Centiva company to enhance the visuals found in Acczent. “Synergies with Tandus Centiva certainly give us a leg up on the competition in terms of design, and we are telling that design story.”

Mannington has invested in state-of-the-art printing, texturing and finishing technology to create more realistic visuals in developing Luxury Vinyl Sheet; its big introduction was at Surfaces 2014. “We are reinventing the category a bit,” Natkin said. “We improved the number of dots of ink we can get into a square inch through a high-definition print technology that creates a much higher level of realism than ever before. With that we brought in our expertise in other printing categories and leveraged our expertise in wood and porcelain to get ideas for sheet.”

In conjunction with the LVS launch, Mannington introduced a selling system that was a step up to a good/better/best program, which has historically been commonplace in carpet but not vinyl. In 2015, Mannington will offer that same selling system with the launch of new felt-backed sheet products.

IVC made a big push in sheet in 2014 as well, revamping its Flexitec program (8 x 16 formats totaling 170 SKUs) with new styles and designs, as well as a good/better/best option, and introducing an entire new line through CCA Global Partners. “Most of our activity in sheet is what we harvested in 2014,” Murfin said. “We’re doing new development work now that might be introduced in late 2015, and it has the potential to take sheet to the next level.”

In addition, Beaulieu Canada said it will show 55 new sheet vinyl SKUs during Surfaces.

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Contract State of the Industry: Market improving, albeit with some rough patches

May 26/June 2, 2014; Volume 27/Number 28

By Ken Ryan

Screen Shot 2014-06-17 at 11.41.16 AMThe contract/specified market continues to shake off the effects of the recession as it returns to a more favorable pattern of slow, steady growth. Flooring executives who estimated last year’s growth in the low single digits expect 2014 to surpass 2013 levels, despite a terrible winter that hindered first-quarter activity for much of the country.

Many commercial projects that were on hold—some for several years—are now being released as a better economic picture, coupled with pent-up demand, stirs the market.

“We see the state of the contract market improving,” said Ralph Grogan, chief executive officer, Bentley Mills.

Michel Vermette, senior vice president of commercial and international business for Mohawk Industries, said those commercial customers that did not want to spend major dollars during the downturn suddenly have to compete for talent and customers, and have to present the right image. “They have to update their spaces to be relevant. Three years ago everyone was holding back.”

Still, others are more cautious about what they are predicting for the market. “Some corporations will spend money but they will tighten their budgets,” said Harold Chapman, president and CEO of Bonitz Flooring Group. “We had a good backlog going into 2013, but 2014 is a little different. Our backlog is not quite as strong and the first quarter was really slow. However, I do see the third and fourth quarters as having the potential to be very good.”

Jack Ganley, president, Mannington Commercial, added, “Economic conditions remain relatively uncertain and we see some hesitation to release capital for large projects. However, like last year, we are seeing growth in the commercial market—albeit at a slower rate than anticipated.”

Most executives told FCNews that government spending is still lagging behind on both the state and federal levels. However, the corporate market and higher education that is privately funded are among the sectors thriving.

“It is very much a tale of two cities contrasting commercial vs. institutional,” said Dominic Rice, who on May 15 assumed manufacturing responsibility for North American commercial resilient products at Armstrong.

Growth segments

Bill Blackstock, regional vice president of sales in the Americas for Milliken’s global floor covering division, said a variety of factors have influenced the contract market, including the desire for end users to stay current, recruit top talent and remain competitive. “Workplaces see the value in creating a uniquely designed space that reflects their brand and corporate culture,” he noted.

Vermette said Fortune 500 companies in particular are looking for expertise, reliability, simplicity, and, most important, they are looking for a solution—not just a product. “It’s about who can hit the mark best for some of them, but more of them are looking for one go-to [supplier],” he explained. “One solution is to make their lives easier. Our approach has been resonating with them. They know they will get great value, great service; they know we can make the process easier. You have major end users that have 20 million square feet. They have projects going all the time. They get done quicker, get done with a common standard everyone is happy with, and get done more cost effectively. They also have a level of trust, a credible partner that can resolve an issue quickly and efficiently. And they don’t have to explain what they are trying to do every time. They know performance, sustainability and price point standards.”

In the hospitality sector, a brighter job picture, improved consumer confidence and a general desire to travel more have boosted the hospitality sector for both recreational and business travel, executives said. “Hospitality is in a significant state of rebound, and seems to be the top growing segment for the industry,” Blackstock said. “Our hospitality clients want to remain competitive. They’ve placed a priority on keeping their spaces updated, relevant, and welcoming to visitors, guests and employees.”

Peter Greene, vice president of marketing at Interface, also said hospitality has rebounded strongly since the recession. “There is plenty of pent-up demand, with a lot of conversion opportunities. Hospitality is showing very strong activity right now.”

The retail segment has also benefited from the improving economic climate; business owners that had tabled projects are now putting them on the front burner. The majority of the work is renovations and expansions.

For education, while state-funded programs continue to be constrained to some degree, the pace of activity at the university level—especially higher-end private institutions with large endowments—is picking up. “Higher education institutions are competing with one another to attract top-tier students, and space is a key component in how they differentiate themselves,” Blackstock explained.

Some executives said the healthcare segment came out of the downturn better than any other, as an aging population is creating a need for care facilities. However, the uncertainty of the Affordable Care Act and how it will impact capital expenditures has held down activity. Rice noted that there is a degree of caution around significant investment until there is better understanding of “what this is going to look like.”

Chapman noted that he has seen cuts to healthcare projects recently. “The budgets are not what they were in the past and the only work that will be done is out of necessity. Again, work will be out there but within smaller or tighter budgets. The uncertainty in how Obamacare is going to shake out has facilities managers in an indecision mode as well.”

Overall, 2014 is shaping up to be stronger than 2013, with the expectation of a fairly robust second half. Rob Cushman, vice president of marketing at Beaulieu Commercial, said that while the harsh weather in January and February constricted activity, the market has since rebounded. “We are seeing a lot of activity right now,” he said. “It feels like it is picking up all over, every segment.”

Rice said a return to “more normal growth” might not be realized until 2015 and 2016. “It is simply a matter of timing. Companies deciding to do work now have to go through the process of finding designers, specifiers … the flooring part comes in later.”

Product trends

To no one’s surprise, LVT and modular carpet are the products most likely to be specified for commercial projects. However, higher-end broadloom “seems to have gained some momentum,” Chapman said, “especially with companies like Bentley and Atlas.”

He praised several other companies and products, including Tandus Centiva, which Chapman said “is doing a very good job with styling and performance backings. LVT continues to gain some market share and more companies are introducing new products in this category. The 28 mil products are the ones performing the best. FloorFolio and Tandus Centiva seem to be leading the way here. Hard surface continues to gain momentum and more people are going to hard tile, in some cases over carpet.”

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Bolyu Contract names Campos EVP of sales

Screen Shot 2014-05-06 at 1.00.51 PMAdairsville, Ga. — Bruce Campos has been promoted to executive vice president of sales for the Bolyu Contract division of Beaulieu Commercial, effective May 5.

Campos has been with Beaulieu since 1994 and has served most recently as the divisional vice president of contract sales for the Central Mountain division.

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Commercial carpet: Transformation to green, modular segment continues

Despite the impact of the recession on the commercial sector, contract’s largest flooring category has not only maintained its leadership position in the green movement, its product mix has continued to be driven more by modular styles as opposed to broadloom.

Financially, the category has been hit as hard as any other. The good news is the declines appear to be slowing; when 2010 is in the books, sales are expected to be off high single digits—a vast improvement over the 25% to 30% drop most saw in 2009. In terms of overall sales, some are estimating the segment could fall below the $3 billion mark by year’s end—and closer to $2 billion when Main Street is taken out of the picture—thus giving back virtually everything it had gained in the decade leading up to the recession.

This feeling that the light at the end of the tunnel can be seen is not something just being touted by the mills. At the recent Starnet and ReSource conventions, many of the industry’s largest flooring contractors sported the sentiment, “If we can hold on over the summer, the fall is starting to look decent. And, if we can get through this year, things are looking up in the long run.” Continue reading Commercial carpet: Transformation to green, modular segment continues