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American Olean opens new markets for distributors

Dallas—American Olean is making it easier for its distributors to expand into new territories through convenient “turn-key” stores built by the company. These facilities are part of a value-added service where American Olean executes all of the up-front financing and legwork to site survey, manage construction and build-out the interior of a new store that will feature American Olean as its “anchor” brand.

Once the doors are ready to be opened for business American Olean hands the keys over to its distributor. The eventual cost to the distributor through an easy payment plan is much more doable than shouldering the burden of up-front construction costs and the risk of a new business venture alone.

“Our ongoing mission is to equip our distributors for success with the American Olean brand,” said Hector Narvaez, vice president of distributor sales for American Olean. “Our turn-key value-added service is a powerful tool to help distributors increase their revenue—and the best part about it is, American Olean does all of the heavy lifting for them.”

Travis Tile is the latest American Olean distributor to take advantage of this opportunity and recently celebrated the grand opening of its new Travis Tile showroom in McAllen, Texas. Travis Tile has been an important American Olean distributor for 32 years. “American Olean is serving as the ultimate strategic ally, offering distributors an easy way to substantially increase their revenue stream by expanding into new markets via American Olean’s turn-key showroom opportunities,” said Jamie Tyler of Travis Tile.

The manufacturer’s turn-key showroom is designed to offer a “complete American Olean shopping experience.” Displays in each store showcase the entire American Olean product line. In addition, the overall layout of each store incorporates today’s most studied principles on how consumers shop and what overall shopping experience most effectively guides consumers through the consideration and selection process.

For more information, visit americanolean.com.

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Haines to bail out of Bravo Services Group

February 19/26, 2018: Volume 33, Issue 18

By Ken Ryan

 

Haines, the flooring industry’s largest distributor with 2017 sales of approximately $495 million, has announced plans to exit the Bravo Services consortium, effective April 1, 2018. Haines, in a prepared statement, said the decision to end the relationship with Bravo, which dates to 2000, was based on the distributor’s inability to justify the cost and time commitment vs. the overall return on investment.

“Our decision, while difficult, is simply a matter of return on our investment from the efforts we put in,” Mike Barrett, president and CEO of Haines, said in a press release. In a follow-up call, Barrett told FCNews that over the past year he had evaluated the “the time and effort required to attend meetings, answer surveys, attend the annual [summit], plus our dues, and we frankly haven’t been able to justify a return on those investments.”

Barrett said he kept John Carney, executive director of Bravo, and John Sher, president of Adleta, and a group leader, apprised of his concerns the entire year. “So this, while not their hope, was not a surprise,” he stated. “John Carney and John Sher are great leaders in our industry, and we wish them and the Bravo members the best.”

Bravo disseminated its own release confirming the departure of Haines following a lengthy management review. “Bravo wishes to thank Haines for their many contributions to Bravo over the years,” Carney said.

Haines recently expanded its distribution coverage with Armstrong to the South (FCNews, Feb. 5/12). However, Barrett said that move had nothing to do with its Bravo decision. Also, in November, Haines and Belknap-White Group forged a partnership aimed at improving the  effectiveness of both companies. As part of the deal, Belknap will hold limited shares in Haines through an equity investment, which would help Haines reduce debt and continue to invest in new initiatives.

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Armstrong Flooring strengthens distributor partnerships

Lancaster, Pa.—Armstrong Flooring is empowering its distributors with increased responsibility for marketing, merchandising and sales of its residential flooring products, and is focusing resources to drive growth with national retail and commercial customers.

“Since we launched Armstrong Flooring as an independent company in 2016, one of our core objectives has been winning with distribution—to grow sales and market share by rebuilding and leveraging our distributor relationships,” said Don Maier, president and CEO, Armstrong Flooring. “We’ve made tremendous progress to further enhance these partnerships, and we are confident we are working with distributors who can most effectively advance our growth strategy.”

Maier continued, “Shifting elements of our residential marketing and merchandising responsibilities to our distributors is intended to increase efficiency, move decision-making closer to the customer, and improve speed-to-market. As distributors take on additional responsibilities, we plan to increase investments in national retail and commercial accounts, specifiers, architects, designers and contractors.”

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T&L Distributing partners with Tarkett

Houston—T&L Distributing has entered a distribution partnership with Tarkett. Through this collaboration, T&L Distributing will immediately begin offering Tarkett’s resilient residential and commercial products, including Tarkett’s Johnsonite brand, to its customers throughout its distribution footprint, including Texas, Arkansas, Louisiana, Mississippi, New Mexico, Oklahoma and parts of Tennessee.

T&L Distributing will carry Tarkett’s residential sheet, laminate and LVT flooring, as well as adhesives. Commercial Tarkett products will include Johnsonite resilient flooring, including rubber, linoleum, vinyl flooring and composition tile, and Johnsonite finishing borders, wall base, stairwell accessories and adhesives. Many of these products carry a variety of certifications, including Cradle to Cradle, Floor Score, as well as asthma and allergy friendly.

“This partnership allows us to provide our customers a full range of Tarkett flooring,” said Bob Eady, president of T&L Distributing. “We will be able to provide environmentally friendly products that are produced by Tarkett in a responsible way and feature high design. Our customers want highly designed flooring that performs over time, so we’re thrilled to offer Tarkett’s resilient lines. We’re looking forward to a successful and long-term partnership.”

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Elias Wilf receives John B. Campbell award

Calhoun, Ga.—Mannington recently presented Elias Wilf Corp. with its prestigious John B. Campbell Award. This award recognizes the Mannington distributor with the best overall performance in 2017.

Keith Campbell, Mannington’s chairman of the board, made the award presentation, noting the two companies have a decades-long relationship, and working together as partners in the marketplace is what has helped them both thrive over the years.

From left: Todd Lyons, vice president, Elias Wilf; Brian Doucette, vice president, commercial, Elias Wilf; Russell Grizzle, COO, Mannington; Jeff Striegel, president, Elias Wilf; Keith Campbell, chairman of the board, Mannington; Zack Zehner, senior vice president of distribution network, Mannington; Ed Duncan, president, residential business, Mannington; Rich Kearsley, senior vice president of sales, Elias Wilf; and Bryan Campbell, vice president of sales, commercial, Elias Wilf.

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Aspecta by Metroflor partners with Spartan Surfaces

Norwalk, Conn.—Aspecta by Metroflor has appointed Spartan Surfaces as its new distributor for New York City and Long Island, Washington, D.C., and the mid-Atlantic and Southeastern states, effective Jan. 1.

The Bel Air, Maryland–based sales and consulting group is well positioned to represent the flagship Aspecta contract LVT brand, said Paul Eanes, vice president of sales, Metroflor.  “Spartan Surfaces’ unique business model places heavy focus on the contract market, ideally suiting them to carry the Aspecta brand,” Eanes said. “Selling and specifying Aspecta requires a highly technical, commercially focused sales organization, and that is exactly what we have in Spartan Surfaces. To team up with such a powerful distributor-partner is a big win for both companies.”

Kevin Jablon, Spartan Surfaces president, sees many cultural similarities between Spartan and Aspecta by Metroflor.

“Our core values are the same: hard work and integrity. Employees come first and everyone has a voice,” Jablon said. “We look forward to embracing Aspecta into what we call the Spartan Experience: driven by passionate people building longstanding relationships through a collaborative approach, leading with innovative flooring designs and creating successful experiences in everything we do.”

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B.R. Funsten: Single-source solutions provider

December 18/25, 2017: Volume 32, Issue 14

The following is the 12th installment in a series highlighting the 14 distributors that constitute Bravo Services, a group comprising many of the top flooring wholesalers in the country. Here we focus on B.R. Funsten.

 

Founded in San Francisco in 1956 by Benjamin Reed Funsten, The B.R. Funsten & Co. has successfully grown into one of the largest flooring wholesalers in the nation. The Manteca, Calif.-based flooring wholesaler is the parent company of the Tom Duffy Co. and Commercial Solutions; together the group provides the most comprehensive group of products and services across all flooring channels throughout California, Nevada and Arizona.

B.R. Funsten started primarily as the Armstrong distributor for northern California and northern Nevada, and Armstrong remains its premier supplier. Then, 20 years ago, Funsten purchased the Tom Duffy Co., a flooring installation supplies operation. Since then the wholesaler has expanded throughout California, Nevada, and Arizona with 28 branches.

According to Anne Funsten, president, B.R. Funsten’s competitive advantage stems from the depth and breadth of its diversified portfolio, which has expanded over the years to encompass all aspects of flooring. “Whether you are tearing up an old floor, prepping to install a new floor or selecting your finished floor, we have a solution for you. We work with the best manufacturers from all aspects of the flooring industry—Armstrong, Roppe, Ardex, Burke, Diamatic, Bostic and Mapei. We are a single-source supplier for the retailers.”

Going above and beyond
As with any industry, a big challenge is staying on the cutting edge of technology. B.R. Funsten made the decision to convert its Enterprise Resource Planning (ERP) capabilities to Kerridge Commercial Solution’s K8 distribution management system. K8 provides automation that ensures distributors can maximize their warehouse efficiency without compromising accuracy. The software automates processes such as goods receipt, replenishment, stock movement and stock counts.

Nuts & bolts
Geographic coverage: California, Arizona and Nevada
Brands: Ardex, Armstrong, Bostic, Burke, HF Design, Independence Hardwood, Kahrs, Mapei, Quick-Step, Roppe, Schluter, Sika, TEC, The Mission Collection,  USG, XL Brands

 

For more information on B.R. Funsten, call 800.479.5671 or visit brfunsten.com. For more information on Bravo Services, contact John Carney at 214.215.2880 or visit bravoservices.com.

 

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NAFCD: Signs point to prosperity for distributors

November 20/27, 2017: Volume 32, Issue 12

By Reginald Tucker

 

Screen Shot 2017-11-27 at 10.06.00 AMColorado Springs, Colo.—If current business trends persist, the next few years should be prosperous for floor covering distributors. That’s according to ITR president and economist Brian Beaulieu, who delivered an enlightening economic keynote presentation at the North American Association of Floor Covering Distributors (NAFCD) conference, which was held in conjunction with the North American Building Material Distribution Association (NBMDA) meeting here earlier this month.

“The economy continues to grow and the consumer is in great shape,” he told attendees in the packed ballroom. “We don’t see anything that can go awry. We see a lot more growth than anything else in our future.”

Beaulieu made it a point to allay attendees’ concerns about the contentious political climate, assuring distributors and manufacturers that the sky is not falling. “Beyond 2022 it’s going to get a little bumpy, but we don’t foresee any recessions. We don’t spend a lot of time listening to politicians.”

Looking at business conditions at this point in time in 2016—when his brother, Alan, addressed the group at last year’s convention—Beaulieu says the U.S. economy at present is rising above year ago levels. He describes it as a “flywheel effect.” In other words, things that happen in the last year—i.e., the Presidential election, policy changes, etc., affect what happens the following year. Still, he noted, conditions are ripe for distributors to prosper. “Whether it’s blue [state] or red [state], you can still make green,” he told attendees. “Stop relying on a tax break to make things better for you. What you do in your business every day has more of an impact on business. Stop worrying about who’s in the White House.”

Indeed, virtually all the major economic indicators point to an economy in recovery. “The stock market, which sees activity six months in advance, is going up,” Beaulieu stated. “The fact that it’s rising in November means we’re looking at positive activity through May of 2018. Based on forecasts, investors can expect a rate of return between 1%-2% over the next five years. You can’t time this market in terms of the lows and highs, but you can decide when you’re going to put fresh money in the market. You just have to be patient.”

Screen Shot 2017-11-27 at 10.06.28 AMAnother positive indicator is the bond market, which Beaulieu says is currently higher than the stock market. “We saw the same thing when Ronald Reagan was elected. U.S. Treasury 10-year bond prices went up when Trump was elected.”

Looking at macro-economic trends, Beaulieu expects the Federal Reserve—under a new chairman—will be far less aggressive about interest rates than initially projected. “My message to you is to take advantage of these low interest rates.”

Another trend moving in America’s favor is its standing in terms of global industrial products. Beaulieu cited statistics showing the U.S. leads the pack, representing 24.7% of the world economy. “The U.S. is No. 1 and will be the leader for the next 100 years. Plus, a growing population almost ensures continued economic growth.”

But Beaulieu didn’t paint a rosy picture all around. He cited data showing the U.S. market will likely face a severe labor shortage in the next 15 years. The good news, he said, is this is not relegated to the U.S. but is rather a global phenomenon. His advice? Become more innovative in the hiring process. “Recruiting is the first part of the battle, but there’s also retainment.”

All in all, though, he told attendees that businesses predicated on consumers who demonstrate an increase in confidence will be in good shape for the foreseeable future. The only caveat: If retail sales dip below the 2.5% growth rate, then it’s time for concern. “You should be very bullish about your outlook for 2018. The consumer looks strong and you should be planning on this growth. This is the best economy on the planet, and there is no better time to be us in America.”

Overcoming challenges
Screen Shot 2017-11-27 at 10.06.33 AMDespite ongoing issues with labor, tighter profit margins and retail store closings amidst a rise in e-commerce, distributors remain optimistic about the future of floor covering in the U.S. In particular, many point to the fact major retailers are closing stores at a record pace, with announced store closings this year double what they were over the same period in 2016. Some statistics show retailers will close almost 9,000 locations this year, surpassing the number of closings during the 2008 recession.

“The flooring industry is not immune to the shakeout,” said Torrey Jaeckle, vice president of Jaeckle Distributors, a Madison, Wis., distributor. “According to the most recent Census Bureau data, the period of 2007 to 2014 saw a 26% drop in the number of flooring retail establishments across the nation, resulting in a 34% decrease in employment at those businesses.”

Jaeckle blames two culprits: Overbuilding and the rise of online shopping. Overbuilding of retail storefronts, he said, has made the retail landscape intensely competitive, leading to a surge of downward pricing pressure. By that same token, online shopping has had its own effect on pricing, due to the ease with which it facilitates price shopping.

His advice to flooring retailers and distributors? “First, stay on your toes. The changes happening now in our industry are tremendous. It is critical industry participants, including flooring retailers, stay on top of these changes and develop solid plans for their businesses.”

Within his own territory, Jaeckle expects to see robust growth throughout 2018 on the commercial side. He expects a different outlook for residential. “I think overall the industry for our region is going to see more lackluster growth compared to 2017 as GDP growth slows as the year progresses.”

Other major floor covering distributors are positioning for growth amidst economic challenges. Santa Fe Springs, Calif.-based Galleher, the No. 5 ranked flooring wholesaler, recently secured an investment deal with Quad-C Management, whereby the private equity firm will take a majority stake in Galleher. According to Jeff Hamar, president and CEO, the investment will provide Galleher with the financial strength to pursue growth opportunities both organically and through acquisitions.

In the last seven years, Galleher has averaged 20-plus percent growth year over year to nearly 250% in that time. However, 2017 saw only a 7% gain, Hamar reports. While California was hit very hard by the 2007-2009 recession, he said the state bounced back stronger than the rest of the country. Now the wholesaler is looking to drive that momentum with Quad-C’s infusion.

“Nobody in distribution has grown like we have,” Hamar told FCNews. “It has been pretty remarkable.”

Other highlights
NAFCD/NBMDA organizers reported attendance was up about 15% over last year’s event in Chicago. Combined with NBMDA members, the total turnout entailed about 800 industry professionals.

“We are thrilled by the interest in this year’s event,” said Kevin Gammonley, NAFCD/NBMDA executive director. “The joint event between the two organizations continues to be a rich setting for distributor professionals to make business connections and learn from educational sessions addressing relevant industry trends and distribution management challenges.”

Organizers also based the show’s success on the number of first-time exhibitors, which totaled 47 (out of 196) this year.

 

 

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Distribution: Tarver’s big plans for Wanke Cascade

November 6/13, 2017: Volume 32, Issue 11

By Ken Ryan

 

Screen Shot 2017-11-13 at 10.06.42 AMOver the last two decades Rob Tarver built a reputation as a go-getter whose background in sales and marketing, sourcing, design and product development for Wilsonart and later Wellmade made an impression on customers. During that time, he served in a number of different roles and familiarized himself with both domestic and foreign production of laminate, wood, tile and vinyl.

Bruce Buckwold, president of Buckwold Western, thought enough of Tarver to name him president of the Wanke Cascade subsidiary in the Pacific Northwest. “He’s knowledgeable, energetic and understands what it takes to grow a company,” Buckwold said. “His diverse flooring background and entrepreneurial spirit made him a perfect fit for our company.”

Hired in November 2016, Tarver said the first year has been about as smooth and seamless as he could have envisioned. “Probably the most important asset has been the variety of roles I have performed over the years,” Tarver told FCNews. “I haven’t seen anything this first year that would surprise me. Even though I hadn’t been in distribution I did sell through distribution so I was pretty familiar with the process and how it worked.”

Headquartered in Portland, Ore., where it also operates a state-of-the-art distribution center, Wanke Cascade runs fullservice branch facilities in Seattle and Spokane, Wash. If it were a stand-alone wholesaler, rather than a subsidiary of Buckwold Western, Wanke would be a top 30 distributor in terms of revenue.

For Tarver, perhaps the biggest adjustment in year one has been navigating through freight logistics in a large geographic territory. As he explained, “The Pacific Northwest is not the easiest area to move material around in a timely and cost-effective manner. There are hidden costs with distribution that you need to understand to optimize your profit. It takes a good six to 12 months to evaluate a market across the board—internal to external—getting to know your customers, your channels. Year two will be where you see a lot of the benefits of some of the changes, additions and strategies.”

Tarver said his short-term goals are to look introspectively at the company and identify areas of weakness or places that need improvement, and then create a plan that addresses those needs. “Long term, we want to be more important to our customers by adding value at every phase. Meaning, we need to be sure we have the right product for the right price; our sales associates educate our customers and become an asset to their needs, and we service the market with speed and efficiency.”

Even before he took the reins of Wanke Cascade, Tarver understood the role of a distributor has evolved from merely delivering product in a timely and efficient manner. “Distributors have local inventory, multiple will call locations, knowledgeable sales associates and dedicated customer service teams to support their markets. Distributors are also developing their own private-label programs to meet local needs in regard to product and style. Therefore, distributors are in a position to provide the right products and designs our customers need.”

As for Wanke Cacade, Tarver said, “There is great opportunity for us.”

 

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Distribution: Despite threats from LVT/WPC, segment hold its own

November 6/13, 2017: Volume 32, Issue 11

By Ken Ryan

 

Screen Shot 2017-11-13 at 10.04.14 AMPrior to the explosive growth of LVT/WPC, hardwood was the hot product in the hard surface flooring segment. In fact, 2012 and 2013 saw some of the largest increases in the wood category, with double-digit gains each year.

Since then wood has continued to grow, albeit at a declining rate. Some observers surmise that this slow growth, which in many ways mirrors the overall flooring industry over the past five years, is the new normal. “I think wood growth is going to level off for the industry in the low single digits going forward,” said Torrey Jaeckle, vice president of Jaeckle Distributors, Madison, Wis. “What we are seeing is the wood jobs we are getting are larger average sizes, which has a positive impact on growth. The average order size (in square feet) is up 15% from several years ago. Wider widths and scraped product continue to show steady gains, and while you can get those same looks in a number of different product categories now (LVT, ceramic, laminate), real wood still remains an aspirational product for many consumers and will continue to do so. I think what we are seeing is the designs of other products have become so good now some consumers are becoming more willing to give up the real thing for the wear, maintenance and other benefits these other products offer.”

Another leading distributor suggested wood flooring “will never be back to where it was.” His view is the pace of new home builds is down 60% from its peak in 2007 and will be hard-pressed to match the pre-recession levels anytime soon given the shortage of skilled labor that is impacting construction. “The peak of home building is when wood really shined,” he said. “New homes drive building flooring contractors. I don’t know that the builder market will have exuberant growth but I expect it to climb in the low- to mid-single digits.”

Based on the percentage of business distributors still do with hardwood, they are clearly still bullish on the category. Many of the top 20 have wood portfolios in the 25%-35% range; some are lower; a few much higher. Scores of consumers still want genuine wood, not something that merely replicates it. “What we are noticing is wood styling trends seem to be changing quickly. It’s imperative for us to work with our suppliers to provide the latest and greatest looks,” said Chip Moxley, president of Tingle Flooring, Lees Summit, Mo.

Several wholesalers said they have seen a significant shift toward engineered wood vs. solid, and others have seen a steady increase in their unfinished wood business as well.

For Galleher, William M. Bird, Belknap White, All Tile and others, wood remains a constant. It is the largest segment for each of these wholesalers. In its New England market, Belknap White executives says customers remain passionate about solid wood, whereas in its southern area more engineered is being sold.

Laminate
For most top 20 distributors, laminate represents well south of 10% of their product mix, with several saying it is now 5% or less. “Laminate is taking a severe dive,” one prominent West Coast distributor told FCNews.

Blame it on the success of LVT/WPC, which has eroded virtually every other category. But while some have given up on laminate, there are those who are encouraged by new developments, in particular some of the new water-resistant offerings.

Mannington’s Spill Shield, for example, was cited as a product that offers true differentiated advantages. “Laminate has surprisingly held its own because it has been embraced by the builder channel,” said Jeff Striegel, president of Elias Wilf, Owings Mills, Md. “[The 12-mil format] has made them more comfortable. You can get the wood visuals at a fraction of the cost. It is a much more durable floor from the time it goes in to the time the homeowner takes over [occupancy of the home].”

Distributors who have not abandoned the category have picked up share from those who have. For Herregan Distributors, Eagan, Minn., laminate is still 10% of its business.  “Laminate is showing some positive trends because of stronger moisture warranties,” said Pat Thies, vice president of sales and marketing.