By Ken Ryan and Lindsay Baillie
The abrupt shutter of Royalty Carpet Mills, a California carpet manufacturer with a 50-year history, stunned many of its flooring dealers who said they were caught completely off guard by the sudden closure.
“There are a lot of angry folks and angry customers,” one industry executive told FCNews.
Typical of the reaction was that of Julie Goodman of Goodman’s Floor Covering, Florence, Ore. She was attempting to order Royalty samples over the phone when she heard the recording explaining the plant was closed for good. Goodman’s Floor Covering has sold Royalty Carpets since 1990 and now has to find another brand to take its place. “We need to fill the niche,” she said. “We’ve always really appreciated their products so there’s a void without them.”
Others were similarly stunned. Michele Hurst of A-1 Carpet & Tile, Portland, Ore., heard the news from another manufacturer’s representative. “We had tried to reach our Royalty rep [earlier this month] and were not able to. He never called us back. I put in a call to our Mohawk rep to ask about her products, and she asked if we had heard the news.”
Like other Royalty dealers, A-1 Carpet & Tile is suddenly looking for a replacement. “We’re not quite sure what we’ll do,” Hurst said. “We already have Dixie Mills products. We also may look into more wool lines.”
Another Royalty dealer, M & D Carpets, noted no signs of a potential shutdown. “I had no idea,” said Danielle Berger. “We were going to call and place an order that day. We were kind of shocked.”
Berger explained the company found out from a Royalty rep on June 14, the day the business closed. “I actually had a past representative who worked for Royalty call and ask if I heard the news. I said, ‘What news?’ and he explained that Royalty had closed down.”
M & D Carpets plans to continue selling its Tuftex and Karastan products and is interested in bringing in Dixie Home products to take Royalty’s place.
Then there are dealers like Lesley Castruita, House of Carpet, South Lake Tahoe, Calif., who had an order in house that is no longer available to her. “We’re not very happy about this. We’ve been Royalty customers for 34 years, and we had no idea this family-owned, Southern California mill could have such a devastating effect on us.”
Among those mills looking to fill the void is Tuftex, a California-based manufacturer and the high-end carpet division of Shaw Floors. “Customers will be looking for options for a West Coast supplier, West Coast service, West Coast styling and West Coast colors,” said Doug Jackson, vice president of sales and marketing. “Our Tuftex sales force will be out to earn this business. Where dealers may already have orders not being serviced by Royalty, Tuftex can offer quick alternatives and service to help keep these consumers satisfied and to get their floors finished. The dealers that have enjoyed the service of a West Coast supplier have Tuftex as strong supplier.”
A long tradition
Founded in 1966, Royalty Carpet Mills had grown into a large carpet manufacturer with the addition of PacifiCrest Mills, Camelot Carpet Mills and Moda LLC—all acquired and added to its brand portfolio.
Under Derderian, Royalty created a legacy for producing high-quality carpet products noted for their style and design. When Derderian passed away in 2013 at age 87, his daughter, Andrea Greenleaf, took the reins. Greenleaf had been running PacifiCrest, its commercial division, for the previous 20 years. With Greenleaf at the helm, Royalty became the only female-owned and led carpet mill in the U.S.
However, on June 14, nearly 400 employees were called into a conference room in Irvine, Calif., and were notified that the plant was closing for good that day. It was reported that they were given just a few hours to leave.
Greenleaf did not return calls or e-mails from FCNews seeking comments regarding the abrupt closure or to confirm rampant industry speculation that a proposed deal to acquire Royalty broke down in the days leading up to the shutdown.
Dennis Johnson, vice president of manufacturing, Royalty, told The Portverille Record that employees would be paid for 60 days and receive benefits as required by the federal labor rules regarding plant closures. In an email to the local newspaper, Johnson blamed the closure on the high cost of doing business in California. “This puts us at a huge disadvantage when trying to compete in an extremely competitive national market and it gets worse every year.”
Royalty owned three large facilities in Orange County. Real estate sources told the Orange County Business Journal that a deal is in place to sell those properties.
John Lollis, Porterville city manager, said the closing was “very unexpected” and runs counter to recent conversations he had with Royalty officials. He explained that Royalty owns a piece of vacant land just north of the existing plant; when inquiries were recently made as to whether the land was available to be purchased, plant officials told him it may be needed for future expansion instead.