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Executive forecast: Industry leaders look forward to robust year ahead

November 27-December 11, 2017: Volume 32, Issue 13

By Ken Ryan

 

Words like “sluggish” and “tepid” to describe growth in the flooring industry are being replaced by “healthy” and “sustainable” as some of flooring’s top executives see an industry that is now accelerating to a respectable cruising speed as we approach 2018. The catalyst driving this momentum is winning products—the still-booming LVT market and across-the-board innovations in other segments.

We expect 2018 will be even better than 2017. Continued GDP expansion, employment growth and rising wages will drive consumer spending. Residential new construction and refurbishment growth is responding to demographics, and lack of housing inventory with mixed use development continues to shine. After a lackluster 2017, commercial should be stronger in 2018 with rising business confidence.

The big unknown for 2018 could be corporate and individual tax reform. This could be an accelerator for all of the above.

In terms of the biggest challenge facing the industry—short and long term—it is adequate supply of qualified installation. Manufacturers are responding with easier-to-install flooring, but attracting and retaining qualified installers must be dealt with on a local basis. In general, the greatest opportunities are for manufacturers to truly understand consumer and end-user needs and requirements, which result in innovations with real solutions. Also, manufacturers need to transparently provide information and tools for consumers to make better flooring decisions.

We continue to invest and spend capital at record rates, [dedicating resources to] new businesses, new manufacturing platforms and new technology. We will continue to expand our revolutionary StrataWorx carpet tile platform with new looks and new installation methods. We are also investing heavily in our key brands with the rollout of the new Anderson Tuftex brand, a new consumer campaign on COREtec and exciting soft and hard surface introductions from Shaw Floors.

As an industry, we must be diligent about changing consumer purchasing habits—the move to digital, her desire for transparency and ease of transaction, and the reputation and integrity of our products. If we acknowledge and understand the consumer, and offer products, services and selling environments that relate, we will continue to prosper.

 

The variables that tend to drive the success of our business—employment and income, the equity markets, inflation, consumer confidence—are in a good place.  Flooring is a discretionary purchase; therefore, [consumer] confidence is important. If you look overall at the market there are a lot of things that are favorable for the consumer. The GDP is now tripping above 3%, so all things collectively are positive for the floor covering business.

What’s driving it? Never has there been more innovation nor excitement than we see today. Every category is being impacted by true product innovation. We think that is weighing in on stimulating the consumer to come into the category. Air.o is just one example of an innovation that is driving industry growth. To be successful innovation has to be understandable—it has to be executable on the retail end, and it has to be promoted.

Our biggest challenge as an industry is standing out in front of a very inundated consumer. Of all the things that keep me up at night it is that flooring [must] stay top of mind. Are we, as manufacturers, doing everything we can to make the product exciting? Are we adding value and making it relevant at a time when that consumer is about to part with $1,000 to $3,000? Are we continuing to excite consumers? (And that starts with first exciting our retail partners.) The charge of the industry is how do we stand out in front with the most innovative products—not just vis-à-vis flooring but vis-à-vis other big-ticket products like electronics or refrigerators with Internet capability.

As a company, we are going to continue to refine and improve our execution in digital marketing and consumer lead generation in conjunction with our retail partners. Most consumers are starting out in the digital universe in their journey. Mohawk wants to be front and center in that process so our retail partners win in that selection process.

Our whole business culture is built on product innovations that are brought to market with exciting stories and opportunities for our retail partners to upsell their customers. As for big initiatives for 2018, you’ll just have to stay tuned for January.

 

Across the industry, we expect to see a continuation of the measured growth we’ve seen this year, with ongoing migration to hard surface flooring and continued robust growth in the LVT/rigid core category. At Armstrong Flooring we are well positioned to capitalize on the market surge in LVT with the recent increase in our domestic LVT production capacity and leading the way with the introduction of revolutionary new products such as our Diamond 10 Technology, rigid core and exclusive Pryzm LVT flooring.

There are tremendous opportunities out there. As one example, we recently repurposed part of our Stillwater, Okla., resilient sheet plant to produce LVT. This increases our domestic LVT production and leads to better capacity utilization for our sheet business.

Ongoing challenges within the industry include recruiting experienced installers and retail associates to help educate the consumer/end users on their purchase decisions.

As our economy heats up, likely increases in raw materials, energy, transportation and operating costs would likely need to be covered with increased pricing. Additionally, the industry is dealing with overcapacity in some product categories.

Our strategy in 2018 is to improve our mix of sales to higher-growth products like LVT and rigid core, while maintaining strong competitive positions in our legacy categories. At Armstrong Flooring, we’re focused on innovation—not just in products themselves—but in the way we do business. Our marketing campaign, “The Floor Is Yours,” goes beyond illustrating the design and performance of our floors and enables us to tell stories that really connect with consumers. We recently launched a new website to inspire homeowners and guide them through the purchase journey, and we will continue to collaborate with our distributor partners and aligned retailers to ensure we are delivering not only exceptional products but also an exceptional experience for our customers.

One initiative in 2018 is our retailer-centric program, Elevate, which helps independent specialty retailers grow their businesses. Elevate offers resources to drive store traffic, maximize the in-store experience and enhance sell-through via an aligned connection with Armstrong Flooring. We will continue to expand that program in 2018.

 

Overall, we anticipate the industry in general—and Mannington specifically—will continue to see good growth in the residential market. We expect to experience a similar pace as we’ve seen over the past 18-24 months: Roughly a 10% increase in single-family starts and a 4%-5% increase in remodeling activity. LVT/WPC will continue to be the stars of the show. There is nothing on the horizon right now that will change the momentum of that category relative to the other categories. All the other product segments are more aligned with the growth curve in remodeling.

Whereas the economy has driven consumer sentiment in the past, today I think the wild card is the political scene. The X Factor, I think, is tax reform and its impact on both spending and investment decisions.

The biggest challenge we face in the industry is the rapid change and shift in consumer preferences. I can’t think of a time the industry has seen such a shift between categories like we’ve seen over the past two to three years. There’s been incredibly rapid growth in LVT coupled with the emergence of WPC as a major category in and of itself. It has literally changed the game overnight, and that continues to evolve. With so much change in the product mix, retailers and consumers alike are finding it confusing. Our greatest opportunity lies in how we, as manufacturers, help them simplify and focus amongst so many choices.

As always, Mannington has an outstanding lineup of new product introductions rolling out at Surfaces. We can’t tell you much more than that—you’ll just have to come to our booth to find out.

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Executive Forecast: Laminate & Wood—Suppliers dial up innovation to ward off competition

December 5/12, 2016; Volume 31, Number 13         

By Reginald Tucker

No one is expecting the laminate category to generate double-digit growth rates in 2017; after all, it is a fairly mature category in the U.S. On top of that, the segment is facing intense pressure from competing hard surface sectors, including LVT, WPC and, of course, hardwood.

However, don’t expect the segment to roll over in the face of fierce competition from other hard surface categories.

Travis Bass, executive VP, sales and marketing, Swiss Krono
screen-shot-2016-12-16-at-10-24-53-amWhat is your projection for category growth next year?
Flat to +3% growth.

What segments and/or products will fuel this growth?
Innovative laminate products with enhanced surface textures and value-add options.

What is the predicted growth of your company in 2017?
10%- 15%.

What is the “X factor” that will impact business next year?
New home construction and repair/remodel investment driven by increased home values and fueled by a stronger economy.

Where do you see opportunities for next year? Challenges?
Opportunities include non-residential, value-added products and Internet sales. Headwinds will be from domestic capacity coming on stream coupled with a strengthening dollar encouraging cheap imports from Europe.

What are some of your biggest initiatives for 2017?
We are working in collaboration with our affiliated European factories to introduce additional products. Domestically we continue to pursue the highest standards and styles for innovative product development.

 

Roger Farbee, senior VP, laminate & hardwood, Mohawk N.A.
screen-shot-2016-12-16-at-10-24-58-amWhat is your projection for category growth next year?
Approximately 1%-2% in dollar growth. However, we believe domestic manufacturers will grow at a higher rate as more import volume continues to shift to domestic production and as more producers focus on higher-end products.

What segments and/or products will fuel this growth?
Growth is being driven through residential new construction as well as increased remodeling activity. We are seeing laminate products being accepted in both single- and multi-family housing at rates unheard of 10 years ago.

What is the predicted growth of your company in 2017?
We will continue to outpace category growth by offering products with the highest level of realism, style, design and technical superiority in all of the channels in which we participate.

What is the “X factor” that will impact business next year?
There is still significant pent-up remodeling demand that will result in laminate flooring sales if consumers feel they have enough job and income stability to make an investment in their living spaces.

Where do you see opportunities for next year? Challenges?
Today’s highly realistic premium products offer consumers more options without having to compromise. There is also an appealing environmental story around laminate flooring products made in North America.

What are some of your biggest initiatives for 2017?
We are introducing more products using our state-of-the-art Deep Texture technology as well as our revolutionary Moisture Protection technology. These innovations are making customers think differently about what laminate means.

 

Drew Hash, VP, hard surfaces, Shaw Floors
screen-shot-2016-12-16-at-10-25-03-amWhat is your projection for category growth next year?
We continue to expect an increase in housing starts, which could have a growth impact of about 6% to 8% in 2017 for the wood industry.

What segments and/or products will fuel this growth?
Hardwood provides the high-end look that is very compatible with today’s newest home interior styles and trends. As a select choice, our engineered styles provide a range of looks that will help fuel this growth.

What is the predicted growth of your company in 2017?
Shaw Floors will continue to outpace the growth of the flooring market in 2017. Our wide breadth of categories and consistent standard of quality across our products supports this outlook.

What is the “X factor” that will impact business next year?
The “X factors” for business success will continue to be the delivery of a reliable customer experience and unmatched support for our retailers.

Where do you see opportunities for next year? Challenges?
We are continuously looking forward to discover new ways to communicate effectively with our customers and arm our dealers with the right information to tell the story of Shaw’s hardwood products succinctly and clearly.

What are some of your biggest initiatives for 2017?
Anderson will continue to expand in the new home construction market. Additionally, we will focus on delivering the most stylish and high-performing engineered styles available to respond to today’s newest trends.

 

Derek Welbourn. CEO, Inhaus
screen-shot-2016-12-16-at-10-25-07-amWhat is your projection for category growth next year?
We see continued growth for our laminate category at about the pace of U.S. GDP, which is between 2%-2.5%. We estimate the flooring category as a whole will have a higher rate of growth as the housing sector continues to recover.

What segments and/or products will fuel this growth?
In recent years vinyl (LVT in particular) has been growing. This was further expanded by the introduction of WPC. The success of these categories has inspired new innovations with composite products.

What is the predicted growth of your company in 2017?
We feel fortunate to continue to grow our global business. Company wide, our rate of growth is forecast to be in the low double digits. This is also what we expect for our North American division.

What is the “X factor” that will impact business next year?
The major “X factor” in the floor covering business is the rapid evolution of new product categories and the challenges that come with competing with products that didn’t exist previously.

Where do you see opportunities for next year? Challenges?
To us, the challenge and the opportunity are one in the same. It is how to successfully participate in the rapid expansion of composite products. We are investing the creation of an entirely new category of flooring.

What are some of your biggest initiatives for 2017?
Our largest initiative by far is the launch of our flooring line Sono, which is based on our new waterproof product technology that will make its debut at Surfaces.

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Executive Forecast: Tile—Technology, pent-up demand to fuel consumption in 2017

December 5/12, 2016; Volume 31, Number 13         

By K.J. Quinn

The outlook for ceramic tile has never been better, as new production technologies are enabling producers to introduce game-changing formats and designs. Fresh off a year where sales and volume approached 10% spikes, marketers are bullish about growth prospects for 2017, as key economic indicators such as the new housing market and a rebounding economy are trending in the right direction.

Bob Baldocchi, CMO, VP, sales support, Emser Tile
screen-shot-2016-12-16-at-10-14-55-amWhat is your projection for category growth next year?
We believe the flooring industry will see solid growth next year that will range between 8% -12%. The growth will come from new home construction and commercial activity.

What segments and/or products will fuel this growth?
The continued increase in the ceramic, wall and decorative categories. Consumers continue to expand their use of tile in the remodel plans that extend beyond just new floors. Walls, decorative accents have all contributed to growth.

What is the predicted growth of your company in 2017?
Our plans are to outpace the industry’s flooring growth. This will be driven primarily by our consistent market expansion. We opened up 10 new design and distribution facilities in 2016 with plans for additional locations in 2017.

What is the “X factor” that will impact business next year?
2017 will see many of the same “X factors” that were present in 2016. Labor continues to put a regulator on growth opportunities, but is also contributing to a sustained housing boom as supplies still seem to lag behind demand.

Where do you see opportunities for next year? Challenges?
We are excited to see our aggressive expansion plans of the last three to four years continue to show positive returns and high year over year growth. The biggest challenge is staying in front of all the amazing growth opportunities.

What are some of your biggest initiatives for 2017?
We are excited about our expansion plans. Our new East Coast distribution center opening in Q1 will provide our national footprint with enhanced service capabilities in the region.

Donato Grosser, president and chief consultant, D. Grosser & Associates
screen-shot-2016-12-16-at-10-15-00-amWhat is your projection for category growth next year?
The housing market is recovering quite nicely and is the main driver for sales of ceramic tile in this country. The remodeling market is relatively stable. We thought we would see an increase of 8%-10%, but it looks like it won’t be more than 5%.

What segments and/or products will fuel this growth?
Large tiles and slabs are being used more and more. Sizes like 3 x 10 are very common in the commercial market. Large tiles are 16 x 16, 20 x 20 and 24 x 24 in the residential market.

What is the predicted growth of your company in 2017?
N/A

What is the “X factor” that will impact business next year?
There is always the danger that a new product will come into the market and compete with ceramic tile. Someone may invent a product that will drive ceramic out of business.

Where do you see opportunities for next year? Challenges?
There are a lot of unknown factors. We just had a Presidential election in this country and no one knows what is going to happen in the future. If the value of the U.S. dollar stays this way, it will be good for imports from Europe.

What are some of your biggest initiatives for 2017?
N/A

 

Gianni Mattioli, executive VP, product & marketing, Dal-Tile
screen-shot-2016-12-16-at-10-15-06-amWhat is your projection for category growth next year?
We have seen positive growth in the tile segment, a trend we expect to continue in 2017. Right now we predict that the category will grow by 4%-6%.

What segments and/or products will fuel this growth?
The housing market, specifically new residential, continues to positively impact the tile sector. Many of the trends in the residential segment are positive signs for the ceramic tile industry, as they will lead to increases in sales.

What is the predicted growth of your company in 2017?
Dal-Tile sales continue to exceed expectations, and we anticipate overall strong growth. We’ll do this primarily by continuing to introduce new products that match trends, improving our product portfolio.

What is the “X factor” that will impact business next year?
In 2016 we made key investments in our manufacturing capabilities, specifically with our Dickson facility. Dal-Tile is leading the advancement of design and manufacturing technologies so we can continue to provide great service.

Where do you see opportunities for next year? Challenges?
Through new innovations we are able to develop tile lines that meet consumer demands. We are going to continue to explore new tools to ensure we are providing the most cutting-edge products on the market.

What are some of your biggest initiatives for 2017?
We will continue to focus on the key areas that are vital to our success: brand identity, product innovation and availability, exceptional service, value to our customers and unmatched logistics.

 

Raj Shah, president, MSI
screen-shot-2016-12-16-at-10-15-11-amWhat is your projection for category growth next year?
I predict the category will grown 6%-8%.

What segments and/or products will fuel this growth?
Tile continues to take market share. Also, significant growth in wall tile is occurring. We should see a lot of growth as Americans install more tile on the walls.

What is the predicted growth of your company in 2017?
Our expectation continues to be to significantly outpace industry growth.

What is the “X factor” that will impact business next year?
There are numerous “X factors,” including the political climate. This is especially true as it relates to tax and immigration reforms.

Where do you see opportunities for next year? Challenges?
We are looking at each channel, including builders, retailers/dealers and architects and designers to grow the business. Ultimately, we need to keep making tile more affordable and accessible, and the consumer is responding.

What are some of your biggest initiatives for 2017?
The biggest initiatives would be to increase growth in our newer channels, including builders and A&D, and continued product introductions with the proper marketing support.

 

Lindsey Waldrep, VP of marketing, Crossville
screen-shot-2016-12-16-at-10-15-15-amWhat is your projection for category growth next year?
The tile market is growing both commercially and residentially at a pace exceeding that of America’s new build growth. Clearly, the preference for tile is strong now and poised to continue this strength into the coming year.

What segments and/or products will fuel this growth?
With both commercial and residential markets consuming more tile, we’ve seen an increase in international and domestic production. This has resulted in the availability of more designs offered in a broader range of price points.

What is the predicted growth of your company in 2017?
N/A

What is the “X factor” that will impact business next year?
It’s essential that manufacturers focus on educating the market about the differences between products. This includes specifiers in both the interior design and consumer communities, as well as installers.

Where do you see opportunities for next year? Challenges?
N/A

What are some of your biggest initiatives for 2017?
Crossville is focused on highlighting the way our products bring creative solutions to challenging scenarios. We’re working with our distributors to reach specifiers with innovative ideas and alternatives.

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Executive Forecast: Wood—Changing demands drive innovations at manufacturer level

December 5/12, 2016; Volume 31, Number 13         

By Reginald Tucker

 

In much the same way that technological advances in wood flooring manufacturing paved the way for surface texturing, finishing options and new engineered offerings in 2016, the latest round of innovations are generating excitement for the coming year. Suppliers see 2017 as an opportunity to step up their respective capabilities as a means to further differentiate themselves while increasing market share.

Todd Gates, VP, residential sales, DuChateau
screen-shot-2016-12-16-at-10-00-47-amWhat is your projection for category growth next year?
We anticipate 2017’s growth will outpace last year’s industry-wide growth of 6.6%. There are obvious potential variables such as the direction of the economy in the wake of the election.

What segments and/or products will fuel this growth?
Trends in this fashion industry still point towards the longer, wider format planks that are often referred to as the “European” looks. These formats suggest the engineered wood products will enjoy a larger portion of the overall hardwood growth.

What is the predicted growth of your company in 2017?
From a fashion perspective, we are ideally positioned going into 2017. As we increase our product offering and expand into additional markets, we are confident we will outpace the industry growth.

What is the “X factor” that will impact business next year?
For better or for worse, the security and the economic impact of the recent election.

Where do you see opportunities for next year? Challenges?
Investment in the people and the culture that drives and defines our business, our family and our employees. The most successful companies globally are those who don’t look past their own people.

What are some of your biggest initiatives for 2017?
Additional product offerings, retooling of our presence in the retail showrooms, expansion into new territories and a dedicated commercial sales team.

 

Neil Poland, president, Mullican Flooring
screen-shot-2016-12-16-at-10-00-53-amWhat is your projection for category growth next year?
I expect to see between 4%-5% growth in hardwood flooring in 2017.

What segments and/or products will fuel this growth?
The housing market will continue to strengthen, although single-family starts and completions remain more than 20% lower than the historical average. Engineered flooring will lead the growth as housing should grow more rapidly in Sun Belt markets.

What is the predicted growth of your company in 2017?
We anticipate Mullican Flooring will see growth between 8%-10% next year.

What is the “X factor” that will impact business next year?
Single-family housing construction continues to be the question mark. We are hoping to see this segment increase. I would love to see starts accelerate to one million single-family homes in 2017.

Where do you see opportunities for next year? Challenges?
We believe that the Made-in-America movement will continue to gain momentum. Progressive retailers should develop stronger programs within their stores to promote our products made in the U.S.

What are some of your biggest initiatives for 2017?
We will continue to fine tune our product lines, adding new products on the front edge of wood flooring design trends.

 

Paul Rezuke, VP, residential sale, USA, Wickham Flooring
screen-shot-2016-12-16-at-10-00-58-amWhat is your projection for category growth next year?
We are confident that if interest rates remain constant, and the economy continues to be positive, the expected growth will be in the 6%-10% range.

What segments and/or products will fuel this growth?
We have seen a steady shift from solids to engineered and we stand ready to be positioned to service our customers.

What is the predicted growth of your company in 2017?
We have targeted 10% growth for 2017. It will be a transitional year for Wickham Flooring, especially as we move to introduce our engineered platforms to keep up with customer demand.

What is the “X factor” that will impact business next year?
We’re in the process of fine tuning our engineered production. The “X factor” for Wickham will be our ability to have the line fully functional in 2017.

Where do you see opportunities for next year? Challenges?
Our opportunities will derive from our increased expansion into the U.S. market, along with the successful implementation of new products. Our challenges will be hiring the right people to represent our brand and lines.

What are some of your biggest initiatives for 2017?
We have invested over $7M in a new state-of-the-art engineered flooring line. Our plan over the next 12-24 months will be to align our engineered lines with our solid lines.

 

Brad Williams, VP, sales and marketing, Mirage
screen-shot-2016-12-16-at-10-01-05-amWhat is your projection for category growth next year?
Our expectation is that the hardwood category will grow at 4%-6% rate in 2017.

What segments and/or products will fuel this growth?
Unique, value-added products in engineered platforms will continue to fuel this growth. There will continue to be a shift into wider width products. However, the look will be one of the main drivers.

What is the predicted growth of your company in 2017?
Our predicted growth is to grow at the same rate of the overall industry or 4%-6%.

What is the “X factor” that will impact business next year?
The issue is whether consumers will have the confidence in the current economic and political climate to invest in residential replacement or buying a new home. If so, they might opt for cheaper products in other categories.

Where do you see opportunities for next year? Challenges?
The opportunities for us are within our current network. We want to continue to stay focused on our customers and giving them the best service possible. We don’t want to give them reasons to go elsewhere.

What are some of your biggest initiatives for 2017?
Wider width and longer length offerings will continue to be a strong initiative for us. Color, texture and finish will also be at the forefront of our innovations.

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Executive Forecast: Resilient–LVT/WPC expected to continue its strong surge well into the new year

December 5/12, 2016; Volume 31, Number 13         

By Ken Ryan

 

The double-digit growth that has catapulted the LVT category in recent years is expected to continue in 2017, buttressed by the rise of rigid core products (also known as WPC). The lone caveat may be the very success of LVT, which is ushering in a new wave of players looking to grab a piece of this ever-expanding market.  

Larry Browder, CEO, Karndean Designflooring
screen-shot-2016-12-16-at-9-48-47-amWhat is your projection for category growth next year?
All indications show the category will again grow around 15%.

What segments and/or products will fuel this growth?
Commercial and retail will continue to be strong. Glue down or dryback products will see success in all categories while floating floors will drive the largest growth. Premium products within the rigid WPC segment will drive significant growth and create good margin opportunities.

What is the predicted growth of your company in 2017?
Karndean has enjoyed significant growth year after year due to our Designflooring strategy and customer-partnership philosophy. We fully expect that to continue in 2017 and beyond.

What is the “X factor” that will impact business next year?
The recent U.S. Presidential election and the [carry over] effect over the next four years remains to be seen.

Where do you see opportunities for next year? Challenges?
In 2016, Karndean made significant investments to increase our inventory, production, service and sample capabilities with the expansion of our U.S. headquarters outside Pittsburgh. This will allow us to meet the challenges of increased competition.

What are some of your biggest initiatives for 2017?
The new product launches we have scheduled will expand our product selection beyond dryback and loose lay floors to include Karndean Korlok, a premium, rigid-core format that will provide superior retail, commercial and consumer benefits.

 

Kurt Denman, CMO/executive VP – sales, Congoleum
screen-shot-2016-12-16-at-9-48-52-amWhat is your projection for category growth next year?
Overall I believe the category will continue to see modest growth in the range of 3-4%.

What segments and/or products will fuel this growth?
Rigid core products will lead the category growth, particularly as variations intended to address specific price points and segments are introduced. We plan to introduce additional variations in construction and design options that are worlds apart from anything out there.

What is the predicted growth of your company in 2017?
The past couple of years we have enjoyed steady growth and are planning to outpace category growth. Our plans are for growth in excess of 5%.

What is the “X factor” that will impact business next year?
This shouldn’t be a surprise but the Presidential campaign has been such a distraction. Policies of the new administration and consumer confidence will determine the strength of the overall economy and ultimately industry performance.

Where do you see opportunities for next year? Challenges?
We have seen meaningful growth in the builder and multi-family segments. ArmorCore, our limestone-based sheet product, was specifically created to meet the needs of these segments and has done a tremendous job in helping us take market share.

What are some of your biggest initiatives for 2017?
First is innovation. We’ve seen through the rise and popularity of rigid core products that to drive growth we must continue to focus on finding new and exciting ways to solve old problems. That’s true in product construction and design.

 

Piet Dossche, CEO, USFloors
screen-shot-2016-12-16-at-9-48-56-amWhat is your projection for category growth next year?
I expect for the LVT/WPC category to continue its high double-digit growth.

What segments and/or products will fuel this growth?
Opening price point, dryback, glue-down LVT and WPC will be the main catalyst for this growth. The solid click LVT segment will see its growth stagnate as the more stable composite core construction of the WPC will eventually become the click, floating LVT floor of choice.

What is the predicted growth of your company in 2017?
We are again expecting to strongly outpace the industry’s category growth in 2017, just like we have done in the last three years. Our COREtec product collections are still showing strong upward momentum, with several new collections being launched during Surfaces and early 2017.

What is the “X factor” that will impact business next year?
Clarity on trade agreements and Chinese currency policy will take some of the angst away on the LVT being imported from China.
Overall political stability and clear direction will stimulate the consumer to build, renovate and buy new flooring.

Where do you see opportunities for next year? Challenges?
The acquisition of USFloors by Shaw Industries will provide us with tremendous opportunities to streamline and fine-tune our business. The strength of Shaw’s operational excellence and distribution will be a strong addition to our speed to market and creative DNA.

What are some of your biggest initiatives for 2017?
USFloors’ start-up of the first WPC manufacturing plant in the U.S. will be by far the biggest initiative we will be undertaking in 2017.

 

Paul Murfin, CEO, IVS US
screen-shot-2016-12-16-at-9-49-02-amWhat is your projection for category growth next year?
We do the resilient category a disservice when we put all products in one bucket. You are going to see double-digit growth for LVT. However, on the sheet vinyl side, we show negative growth for felt. All together we see high single digits for resilient.

What segments and/or products will fuel this growth?
LVT enjoyed a superb year in 2016. I don’t see anything to prevent that growth from continuing. It is still the fastest growing product segment in the industry, and when I talk about LVT I include these rigid-type products (WPC), which are driving a good portion of that growth as well.

What is the predicted growth of your company in 2017?
My goal and expectations would be to do better than [the overall] market growth.

What is the “X factor” that will impact business next year?
While people are talking of LVT growing rapidly it is also the most crowded category in the industry. This growth rate is not necessarily something you can take for granted. Companies will have to continue to focus on differentiation and value relative to other product categories.

Where do you see opportunities for next year? Challenges?
There is opportunity for Mohawk resilient to leverage our LVT factory, which is now established and starting to make product in a fairly healthy manner. We are looking forward to taking advantage of that capacity, which we have not had at our disposal before.

What are some of your biggest initiatives for 2017?
We have a variety of product plans across all of our distribution channels. New products and initiatives for IVC include refreshing our Flexitec sheet vinyl line and transitioning our LVT from Belgium production to U.S. manufacturing.

 

Michael Raskin, CEO, Raskin Industries
screen-shot-2016-12-16-at-9-49-06-amWhat is your projection for category growth next year?
We are projecting 15% growth for 2017.

What segments and/or products will fuel this growth?
Dryback will continue to grow, but the floating products will continue to increase due to ease of installation and contractors looking to reduce the cost of floor prep. Click and loose lay products will continue at higher growth rates. There will be more variations of rigid products.

What is the predicted growth of your company in 2017?
We expect our volume to be double of the overall category growth. We expect to be at 30% growth rate due to new distributors, growth from our existing distribution and domestic production expansion. We will launch our waterproof, rigid LVT products.

What is the “X factor” that will impact business next year?
Assuming the playing field is even, the “X” factor will be companies that deliver design, color and consistent quality. You will see a stronger divide between brands driven by design vs. low price LVT brands. The companies in the middle will find it harder to maintain market share.

Where do you see opportunities for next year? Challenges?
The expansion of our domestic offerings will provide exclusive designs and the ability to reduce delivery times. By offering more domestic products we keep our supply chain diversified in case there are trade sanctions imposed or cost increases from freight or overseas suppliers.

What are some of your biggest initiatives for 2017?
To strategically select products that are imported vs. made in the USA and collectively inventory with our distribution partners to maximize our logistics.

 

Russ Rogg, CEO, Metroflor
screen-shot-2016-12-16-at-9-49-12-amWhat is your projection for category growth next year?
Specific to the LVT category, we anticipate total blended growth will be in the 10% range, i.e., “blended” across all segments and all LVT product types/categories.

What segments and/or products will fuel this growth?
All segments will grow but not at the same rate. Floating LVT—rigid-core floating LVT in particular—will outpace all other categories with accelerated growth. This growth in the rigid-core category will come from all [residential] segments and certain commercial segments.

What is the predicted growth of your company in 2017?
We are planning for a 10% increase. With the continued growth of our Aspecta commercial LVT brand specifically related to two new collections that we’ve added (Aspecta Ten featuring Isocore Technology and Aspecta One, a new line of dryback commercial LVT).

What is the “X factor” that will impact business next year?
The “X” factor for Metroflor is to simply execute the various initiatives that we have already begun or have planned. Aspecta Ten, our commercial rigid-core product, has only begun to see exposure during the fourth quarter, so there is a lot of runway for this brand/collection.

Where do you see opportunities for next year? Challenges?
The two greatest opportunities for Metroflor are tied to our plan to engage with and create closer relationships with our Aligned Dealer Network. Through this effort, we desire to establish our Isocore platform as the market-leading technology in the rigid-core category.

What are some of your biggest initiatives for 2017?
We want to continue to invest in and grow our Aspecta business. In two and a half years, we’ve gone from a conceptual new commercial LVT brand to having nearly 200 SKUs across three collections: Aspecta Five, Aspecta One and Aspecta Ten.

 

John Wu, president and CEO, Novalis Innovative Flooring
screen-shot-2016-12-16-at-9-49-16-amWhat is your projection for category growth next year?
We predict the LVT/WPC category will continue to grow at a double-digit pace through 2017.

What segments and/or products will fuel this growth?
We still see continuing growth in the specified commercial segment and the Main Street commercial segment. We also believe the WPC category will continue to push forward residential volume in 2017.

What is the predicted growth of your company in 2017?
Novalis will continue to grow at a double-digit rate internationally.

What is the “X factor” that will impact business next year?
In the U.S. there will be a new Presidential administration, so the “X” factor will be to see how this new administration’s policies and changes will affect the U.S. and world economy.

Where do you see opportunities for next year? Challenges?
LVT continues to be a huge opportunity, especially for Novalis and other large and experienced players. The challenge is to continually innovate. We have some interesting developments in that area for 2017. The other challenge the LVT industry faces: increased raw material costs.

What are some of your biggest initiatives for 2017?
Continued growth in the areas we started in the last half of 2015 and through 2016—commercial, Main Street and our high-performance core (WPC) product.

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Executive Forecast: Carpet—Mills predict rebound as improving economy takes hold

December 5/12, 2016; Volume 31, Number 13         

By Ken Ryan

 

While 2016 was less than stellar for carpet mills—due in part to the acrimonious Presidential election that some believe hurt consumer spending—executives are looking to bounce back in 2017. Buoyed by an improving economy that many see gaining significant traction, mill executives are forecasting anywhere from a 2%-5% gain, which, if true, would easily eclipse 2016 figures.

Mark Clayton, president, Phenix
screen-shot-2016-12-16-at-9-31-09-amWhat is your projection for category growth next year?
We anticipate the soft surface category will experience modest improvements with a more robust opportunity in the mid-upper ends of the market. There is pent-up demand and we are hopeful that continuing favorable economic indicators will result in a more confident consumer.

What is the “X factor” that will impact business next year?
From a carpet perspective, I think it will be the continued popularity of hard surface and the manufacturers’ ability to create and bring to market soft surface products that are compelling enough to maintain and take back market share. Obviously the state of the economy will also be an “X” factor.

Where do you see opportunities for next year? Challenges?
There will continue to be wonderful opportunities for those who are able to bring unique styling, solutions, simplification and differentiation to the consumer. We will continue to be challenged with the increase in popularity in hard surfaces. Our response is to develop products and programs to support those opportunities and leverage the unique attributes of soft surfaces.

What are some of your biggest initiatives for 2017?
We will introduce several new product platforms at Surfaces 2017. This will represent our most dynamic launch of new programs to date. In addition, we will follow up on our successful 2016 hard surface launches with the introduction of several new products and programs. These products will offer a unique technology to help simplify consumers’ lives.

 

Steve Hillis, president, Beaulieu Group
screen-shot-2016-12-16-at-9-31-14-amWhat is your projection for category growth next year?
The projection for 2017 overall flooring industry growth is 3%-5%. We feel that we could experience greater growth at Beaulieu because we are investing in new products, new displays and a major focus on marketing and branding.

What is the “X factor” that will impact business next year?
The biggest factor is interest rates. Many owners and developers have been waiting to see what the interest rates do, and many expect to see rates rise in the first quarter of 2017. We feel economic conditions will remain strong and could gain steam if the new administration is able to lower corporate tax rates and keep jobs in America.

Where do you see opportunities for next year? Challenges?
We see opportunities with our hard surface business for the residential and commercial markets as well as growth opportunities in the upper end of residential and corporate markets. The challenges will be maintaining a strong housing increase and stable economic environment. Adding labor in the plants could be a challenge as the flooring industry in North Georgia has low unemployment and the competition for labor is fierce.

What are some of your biggest initiatives for 2017?
Some of our top initiatives at Beaulieu for 2017 are to focus on expanding our residential and commercial product offerings with many stylish and innovative carpet and hard surface products. Updating our brands, investing more in marketing, and training the sales team will be key initiatives.

 

Doug Jackson, vice president of sales, Tuftex
screen-shot-2016-12-16-at-9-31-20-amWhat is your projection for category growth next year?
In 2016 we gained market share in soft surfaces, staying a few points ahead of the industry. We remain conservatively optimistic and expect to perform similarly in 2017. We have to continue to deliver unique looks to consumers and dealers while offering the best quality and service.

What is the “X factor” that will impact business next year?
The industry continues to innovate and create more flooring options. The consumer is bombarded with options, information and sometimes distraction. The manufacturer who can capture the attention of a consumer who seeks immediate inspiration and needs transparency in all transactions . . . will lead the way in 2017 and beyond.

Where do you see opportunities for next year? Challenges?
The shift from soft surface to hard surface is both an opportunity and a challenge. No soft surface manufacturer can expect the average order to be what is has been these past five to 10 years. Our Signature Collection product mix and especially our newest introductions featuring sophisticated 3-Color Point technology are a timely response to the smaller carpet install but of a higher end product.

What are some of your biggest initiatives for 2017?
We will continue to support the Tuftex Classics collection with fresh updates for 2017. The “heart of Tuftex,” our Signature collection, will be fortified with a strong offering of new Anso Caress textures and level-cut-loop patterns; 2017 will be defined by some of the most innovative yarn blends, constructions and designs ever introduced.

 

James Lesslie, executive VP – sale, Engineered Floors
screen-shot-2016-12-16-at-9-31-26-amWhat is your projection for category growth next year?
Post-election we have seen positive momentum. We believe that momentum will carry into 2017 for a positive year of growth in the carpet industry. We also recognize that 2%-3% top line growth in 2017 would basically allow the industry to recover to 2015 levels.

What is the “X factor” that will impact business next year?
The biggest “X” factor for the overall economy is our new President. Can he build coalitions in the House and Senate to encourage U.S. manufacturing investment and improve our economy? Specific to carpet, suppliers who bring new innovations in styling, performance and value to the consumer will be rewarded and continue to grow.

Where do you see opportunities for next year? Challenges?
We see a number of opportunities for growth in the year ahead especially in Main Street and modular carpet with the addition of our Pentz Commercial Solutions line. We are also in the process of developing some additional products and features for 2017. As for challenges, they’re no different than any rapidly growing business, and they’re all good…plant expansion, personnel additions, increasing territory, etc.

What are some of your biggest initiatives for 2017?
Engineered Floors has experienced rapid growth over the last six years, and we expect that to continue into 2017 as one of the fastest-growing carpet companies in the world. We have grown to 3,000 employees since our inception in 2010. We see our role as leading the way for growth in carpet, whether it’s in residential, new construction, multi-family or Main Street.

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Executive Forecast: Ready to roll—Leaders bullish on 2017 prospects

December 5/12, 2016: Volume 31, Number 13
By Ken Ryan

Things are looking up for the flooring industry in 2017. That’s the general sentiment shared by the industry’s top executives who cite any number of positive trending economic indicators to conclude that pent-up demand will finally give way to more consumer spending on flooring.

Ed Duncan, president, Mannington Residential
screen-shot-2016-12-12-at-10-53-39-amWhile we continue to forecast growth, we think it will continue to be relatively slow growth—approximately 2%-4% in the remodeling sector— and slightly more robust, about 10%, in new home construction. Mannington is a major player in the hard surface categories, and with some of the things we have planned for next year we think we will be on par with that growth, perhaps outperforming it in some areas.

It’s probably no surprise that the economy is the biggest unknown going into 2017. Specifically, we don’t know how the economy will truly react, over the long term, to the new administration. A lot will be determined in the first 100 days; what changes will be made in the tax law, healthcare and other areas and how consumers will react to those changes.

There are several challenges but one that really stands out, particularly for Mannington, is competition from imported products. We face this every day in the marketplace with copyright and patent infringement in addition to the challenge of communicating the price/value proposition of domestically produced products. We have made significant investments in our manufacturing plants—and we also invest heavily in style and design—to keep one step ahead of this type of competition.

We believe emerging technologies hold the key to the future. We’re thinking very far outside the box these days, and considering any and all options as far as the advancements that technology can bring in manufacturing, styling, product performance and installation. It’s a very exciting time.

Mannington continues to focus on our core competencies: introducing new products that look and perform great. We’re leveraging the investments we’ve made in our plants and look forward to Surfaces, where we’ll unveil what we have to offer for 2017.

Tom Lape, president, Mohawk Residential
screen-shot-2016-12-12-at-10-53-48-amWe’re optimistic about 2017 based upon the fact that we see all of the influential indicators trending positive for flooring purchases. Most notably, home valuations continue to improve and both new home sales and, more importantly, existing home sales continue to trend favorably. Credit availability is quite favorable. Indexes like LIRA (The Leading Indicator of Remodeling Activity) continue to trend positive, predicting strong gains in home renovation and repair spending to continue.

We have invested from a Mohawk view to take advantage of new capacities in each of the growing categories. Vinyl, laminate, wood and ceramic are the fasting growing categories and we have expanded both our North America and global capacity.

Flooring products are largely deferrable purchases, so how the consumer feels is quite important. The big unknown was the election but regardless of which side of the political spectrum you were on, the uncertainty has now been eliminated. There are positive signs out there. For example, new car sales in November were quite strong, and that is a good precursor for our business as well. Things are teeing up favorably and bode well for 2017.

Consumers’ ability to buy the high-end market continues to fare well. We want to see those in the middle incomes come off the sidelines and come back to the flooring space. Whenever you see Middle America they look at these flooring purchases as an investment.

As a company we have invested heavily—product segment by product segment, all the while driving innovation. This all ties in with great marketing, great merchandising, great promotion and a great consumer story.

For 2017 we have a full pipeline ready across every product category. It doesn’t start with a new display or an ad campaign—it starts with great product with great innovation, design and functionality, and then we add great marketing, merchandising, promotion and the great story. But you have to start with great product, and we have that in 2017.

Donald Maler, CEO, Armstrong Flooring
screen-shot-2016-12-12-at-10-53-56-amWe see the industry continuing to show slow but steady improvement. Consumer confidence and market stability will drive repair and remodel as well as new construction markets that will deliver modest growth for the industry in 2017. The builder market is showing improvement. We are focused on driving our mix for both single- as well as multi-family buildings. Consumers are willing to spend more for quality flooring.

We’re in the midst of a transition to new leadership here in the U.S., and we are optimistic and monitoring this closely so we may take full advantage of any opportunities this may create. We believe our growth strategy and resources have us well positioned.

We are focused on combining innovative products and leading-edge design with our world-class distribution network to provide the highest-quality products and service both to our customers and to the end consumer. The centerpiece is our distribution partnerships, which allow us to drive demand generation and best-in-class support to help our retailers grow their business.

We also believe hard surface will continue to benefit from its popularity over soft surface. And let’s not forget that LVT is a category that continues to offer great opportunity. It’s still growing and evolving, and we are continuing to innovate in this category with winning products like Vivero and Luxe Plank. We have new product launches planned for Surfaces, some of which build upon the leadership of our proprietary Diamond 10 Technology. Another big initiative, specifically for the independent specialty retailer, is our retailer-centric program Elevate. We launched the program to help specialty flooring retailers grow their businesses.

Armstrong Flooring continues to invest in strategic initiatives to support our retailers. We are partnered with a world-class distribution network to deliver our innovation and leading-edge designs to our retailers and to their customers. Our goal is to be our customers’ preferred business partner and flooring brand.

Randy Merritt, president, Shaw Industries
screen-shot-2016-12-12-at-10-54-04-amWe’re upbeat about 2017. Business is continually getting better. New home sales are rising and slated to ramp up over the next several years, and commercial sales are good. Investments in new plants and innovation will drive us forward along with the acquisition of USFloors, which is poised for continued innovation and growth in the year ahead.

Today consumers and commercial clients have more choices than ever before. Those choices can be confusing and even overwhelming. It requires retailers and manufacturers to provide even clearer, easy-to-understand communication about product features and benefits than ever before and to be a trusted advisor that can ascertain what the buyer’s needs and preferences are and what product can best achieve that. This diversity of product also brings a need for a keen understanding of consumer and market insights that allow us to strategically invest in manufacturing and innovation that will have the most impact.

Shaw has invested in manufacturing capacity with the completion of our new LVT facility in Ringgold, Ga.; the opening of our new carpet tile facility in Adairsville, Ga.; the expansion and modernization of our extrusion facility in Columbia, S.C., and the expansion of our hardwood plant in South Pittsburg, Tenn., all coming online in 2016.

In 2017, we’ll truly begin to see the benefit of those investments with each entering a full year of operation. That gives us even greater ability to meet customers’ quality and service needs with a diverse portfolio of products.

By the end of 2017, we’ll complete our recently announced 67,000-square-foot Create Centre in Cartersville, Ga., which will house our commercial division’s marketing, design and innovation associates. This Centre will spur further growth and innovation. Bringing these talented professionals together, the new workspace will provide a collaborative environment.

Additionally, the acquisition of USFloors will provide increased opportunity in hard surface with its WPC flooring, as well as cork, bamboo and hardwood products. It expands and complements our leading position in the LVT and hard surface markets and further diversifies our product portfolio.

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Executive forecast: Ceramic producers optimistic about 2013

By Louis Iannaco 

Volume 27/number 15; December 3/10, 2012

The term “cautiously optimistic” is a well-worn adage, and when it comes to what the future may hold for the ceramic segment, it begs to be used yet again. After doing somewhat better than expected in 2012, industry executives who spoke with FCNews feel better times may truly lie just ahead, even though some admittedly have used that refrain before.

Entering 2013, executives said digital technology has and will continue to make an impact in the coming months and years. Also, larger formats and rectangular designs will continue to grow, as will the emergence of thin tiles. Top players also generally see good things for the housing market, the great dictator of growth or shrinkage in the segment. Continue reading Executive forecast: Ceramic producers optimistic about 2013

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Executive forecast: Resilient segment anticipating a successful year

By Jenna Lippin

Volume 27/number 15; December 3/10, 2012

In 2012, industry leaders in the resilient category anticipated favorable economic conditions and widespread growth. Now that the year is coming to a close, many companies report things were quiet over the last 12 months. However, the final numbers did not disappoint.

Once again, despite unpredictable economic conditions, executives look forward to a successful year in 2013. New products, the commercial market, multi-family structures and property management are all expected to help the success of resilient companies across the board.

The upcoming Surfaces event in early 2013 has a number of top players feeling positive, as well, as the event will showcase the latest innovations that will facilitate increases in sales. Continue reading Executive forecast: Resilient segment anticipating a successful year

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Executive forecast: Wood manufacturers see light at end of tunnel

By Melissa McGuire

Volume 27/number 15; December 3/10, 2012

Within the wood segment, executives are hopeful but guarded as they head into 2013, as they see a faint glimmer of light at the end of the tunnel.

A slight uptick in building and purchasing coupled with investments in new product and initiatives have executives not fooling themselves with the thought of robust growth, but rather seem content with a mild, if not sluggish, recovery. Continue reading Executive forecast: Wood manufacturers see light at end of tunnel