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Inaugural event sets the stage for future growth

October 27/November 3, 2014; Volume 28/Number 10

By Jenna Lippin

Screen Shot 2014-11-03 at 10.09.36 AMMiami—In the aftermath of the debut of Surfaces East, or The International Surface Event (TISE) East as it is officially known, show manager Hanley Wood has been left with something to build on for 2015.

While TISE East was never designed to be anywhere near as large as its Las Vegas counterpart, the event, which encompasses Surfaces, StoneExpo/ Marmomacc Americas and Tile Expo, lived up to those who had realistic expectations, particularly Hanley Wood. “To launch a show with 50,000 square feet is huge,” said Dana Teague, vice president. “People aren’t launching shows very much anymore in the first place, so it was a big risk. But it says a lot about the industry that we have had the response we have.”

She added that she was happy with the number of exhibitors and is seeking about 10% growth across the board for 2015. “That’s reasonable, and we can support that growth.”

Teague cautioned that realistic expectations must prevail with a show of this nature. “TISE East was designed to be a regional show. [Miami] is strong with designers and architects. We do have some national people here, but a good 75% will be from the Southeast region.”

In fact, it was this regional draw that attracted most exhibitors. Take Dream Weaver, for example. According to Melvin Silvers, the company’s founder, the biggest motivator to exhibit was its lack of presence in the Southeast. “We thought some of the customers we haven’t had before would come here. We’ve also added four territory managers in the last six months, so we wanted to see if we could open up the new territory here.”

Some companies used the show as a networking opportunity more so than a launching pad for new product, but not Dream Weaver. “Our theme for this show was ‘Mardi Gras comes to Miami,’” Silvers noted. “We have some new colorations, some blended tonals, double space dye, and some other new things coming out.

“This show will be successful in our minds if we get some new customers,” he continued. “If we can get the top 50 customers in the area to come see us, that’s a success for us.”

The theme at Dream Weaver’s booth was Mardi Gras Comes to Miami, helping to draw attention to some new offerings.
Dream Weaver’s Mardi Gras Comes to Miami booth.

Some companies, such as Stanton Carpet, were hoping to parlay the success they traditionally have at Surfaces in January into some new business. “It just made sense to try [East],” said Jonathan Cohen, COO. “The Surfaces muscle, and knowing we have a fair amount of East Coast companies who don’t come to Vegas, lent to our decision.”

While Cohen was not expecting Las Vegas traffic, “We’re still looking at our core—the flooring retailer. It’s good for them to see new things they can’t see day to day because it’s just not out yet, or displays they don’t have.”

Unfortunately, after the show wrapped, Cohen told FCNews that his expectations fell short.

Kane Carpet was another carpet supplier using Surfaces East as an opportunity to highlight new displays that showcase top carpet offerings. According to Bruce Kurtz, vice president of sales and marketing, the company saw a “great opportunity” in exhibiting at a second show, “as there has only been one show for the whole industry up until this point.”

One of the highlights for Kane at Surfaces East was its new carpet tile line, the Royal Empire Series, which consists of broadloom that’s carved and then clipped into tiles for residential or commercial use. “A lot of the young people are looking for carpet tile, but everything offered is very commercial looking,” Kurtz explained. “This is a residential product—a brand new product that’s available now.” Among the new merchandising systems highlighted by the company was an 8-foot Shagtacular display featuring Kane’s leading shag designs.

Once the show wrapped, Kurtz reported that the new displays were, in fact, one of the most successful parts of the show for the company. “People we showed the new displays to went crazy for them. We absolutely got the green light on them. People were actually coming by to take pictures of the displays. Those displays are particularly successful in the South Florida market thanks to those contemporary looks. And the carpet tiles were picked up big time.”

Kurtz said the show was also a triumph for the Kane team as they gathered every morning to discuss the results at Surfaces East to adjust what would be best to show at Surfaces in January. “We brought in the best people, went through a good amount of product and got much accomplished.”

Beyond carpet

Screen Shot 2014-11-03 at 10.14.56 AMHard surface companies also found value in exhibiting at Surfaces East. Max Woods, for example, used the event as a platform to showcase its rebranding from Max Windsor Floors. Company owner Peter Spirer acknowledged the risk of showing at a first-time event, but considered Max Woods at an advantage as the show helped inspire the supplier to be ready with new product and branding for the fall.

“We were able to get a marvelous amount of things done in time for the fall selling season,” he said. “We think we’re going to have a good leg up no matter what; we will be delivering our products introduced at this market long before those who are introducing in Vegas. We felt it was timely for us, it forced us to hit a deadline, and it made us think and make decisions about how we want to merchandise, which is a very big factor in our business.”

Brand exposure was a major driver for Max Woods’ strong presence at the show, which included women airbrushed to match the company’s wood displays. “We also knew the trade press would be here, and we might have a chance of being a compelling place to visit,” Spirer continued. “It’s more about the exposure to the industry thinkers—the major retailers move mountains with their opinions, and their opinions are usually expressed through what they buy. This is for them. Our program is poised to work with the largest retailers.”

After the show, Spirer said Max Woods accomplished its goals for Surfaces East, which were establishing its brand and giving attendees an idea of the scope of the products the supplier now offers. “On my personal score card, I would rate it very high in terms of what we were after. Our organization was very pumped about the show. We really did well.”

Screen Shot 2014-11-03 at 10.15.44 AMOn the resilient side, FreeFit was one of the few LVT suppliers at the show, which suited Ray Pina, vice president of sales and marketing, just fine. “There’s a risk or uncertainty with a new show, but we have the opinion that it’s better to be an innovator and be here while others aren’t. If we can build business with contractors in the Miami area, it’s a win for us. We’re meeting people we wouldn’t have met. I’m looking at it as a Miami trade show—I’m not looking to get customers from Wisconsin here. If I can walk out of here with three or four new customers in Miami, I’m good with that.”

Also showcasing its hard surface wares was Nuvelle engineered wood floors and laminate, a private-label brand from Florida distributor Suncrest Supply. Dewevai Buchanan, president of Nuvelle, said Surfaces East “paid for itself” with the positive response to some of its hottest products, like Beach House, which includes 32 plank variations. “As far as new customers, we’ve seen people from [as far as] California and Brazil. For us this show has been great. We said if we get five customers out of this, that’s perfect. We’ve already done that in the first day. We will absolutely come back.”

Jeffrey Castor, vice president of sales for Diversified Industries, also cited Surfaces East’s connection to Latin America as a benefit of exhibiting at the show. He noted that he wouldn’t normally get to meet these potential customers, nor would they make the trip to Las Vegas for Surfaces. “I also got to meet with a lot of OEMs who are here. All in all, there was a good showing from retailers—I met people from Colorado, California, Florida, all over. I think the show, for its first year, is good. I think there’s definitely a ramp-up period. I foresee in three year’s time this show really growing.”

Attendee response

Nuvelle reported considerable traffic in its booth, with the  innovative Beach House laminate receiving rave reviews.
Nuvelle’s Beach House laminate.

Positivity wasn’t just on the exhibitor side of the show. Attendees—while many were from the local area—responded well to the event, citing the show’s educational sessions as one of the brightest highlights.

Thomas Crook, manager and owner of East Coast Flooring in Ocala, Fla., said Surfaces East was simply more convenient for him, as he was able to get in his car and drive as opposed to jumping on a plane. “I like things in Las Vegas, too, but I think Miami is a better venue overall for a business type of event,” he noted. “The education portion for the most part has been very good. They had a nice selection in classes. On the show floor, we’ve seen new things we’re excited about, particularly from distributors. I hope they continue to [host this show].”

Another local dealer, Laura Hessler of Hessler Paint and Decorating Center, with locations in Delray Beach and Boynton Beach, Fla., agreed the education at Surfaces East was a major draw. As the leader of Hessler’s decorating department, she said she finds it “very beneficial to keep up on things, get questions answered and get information from professionals.

“I would still go to Vegas if they didn’t have an event here, but it was an hour drive south and much more affordable,” she continued. “If this show becomes large enough and offers everything the Vegas show does, for sure I would come here again. I would go to both.”

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The new Max Woods: ‘Imagine’ the difference

October 13/20, 2014; Volume 28/Number 9

By Ken Ryan

Screen Shot 2014-10-31 at 11.39.59 AMWhat’s in a name change? For Max Woods—the company previously known as Max Windsor Floors—the new moniker represents more than just a rebranding, but a full transformation touching all areas of the operation.

“We changed the name to Max Woods to underscore a new start for the company,” Peter Spirer, CEO, told FCNews. “This is a very different company from Max Windsor, and we thought with a new name, new logo, new team and new vision, we would have a better chance to be our own brand.”

While acknowledging there are not a lot of advantages for smaller companies to compete against larger entities, Spirer believes flexibility and contained overhead are among the few advantages Max Woods can leverage in the market. “We pick our opportunities very carefully, and our top managers have the time to spend with customers, rather than managing,” he said. “It’s a hands-on business, and that’s a major advantage.”

Marketing approach

For the sake of simplicity, Max Woods is segmenting its product line into three categories. Not a good/better/best concept, which, Spirer said, presumes that it is possible to trade the consumer up from an inexpensive starter product to higher qualities.

“At Max Woods, our price points take for granted that the consumer has done her homework and has set a fairly rigid budget,” he explained. “We offer a value platform with retail price points that allow our retail partners to go nose-to-nose against the boxes, Lumber Liquidators, and other national chains. These are 3⁄8-inch birches, hickories, maples and oaks. They’re good looking and affordable, and they wear about as well as planks with thicker wear layers. Put them on the floor and no one can tell the difference.”

Max Woods’ next platform targets the residential and builder step-up segments. Spirer calls this the “heart of our business” and embraces the notion that there are a number of end users out there with varied tastes and needs. “The offerings need to be abundant and beautiful,” he said. “We call this platform Heart & Soul. Products in this platform represent a retailer’s day-in, day-out sales.

“Lastly, there is our fastest growing platform, Imagine. This is where our customers can ‘max-imize’ their profits. These are our uniquely styled monumental planks, with widths up to 9.5 inches and lengths of 6 and 7 feet. These products are bought by the relatively small percentage of consumers who have both the pocket and the willingness to try something new.”

Max Woods currently has two collections in its Imagine group and will be exhibiting two more at The International Surface Event East (TISE East) in Miami Beach this month. Spirer calls these offerings “knockouts.”

Retail strategy

Screen Shot 2014-10-31 at 11.44.08 AMAnother linchpin in Max Woods’ retail strategy is based on the size of the businesses it targets. Spirer said the company has adopted distribution geared to the largest few hundred retailers in the country. “By keeping the size of our customer base manageable, we can talk with or visit almost all customers frequently. We share our thoughts, as do they, in order to correct and improve how we perform.

“We recognize that to truly build a partnership with customers, it is incumbent on the supplier to be loyal to the customer,” he continued. “We are obligated to do what it takes to maximize the sales and profits of our customers. We demand next to nothing of them, figuring if we do things right, they will give us increasingly more of their business. The burden of performance is ours.”

Spirer said in order for flooring dealers to hold their own and build market share, they have to compete with the growing penetration of the big boxes. That requires a more diversified product line, sold by knowledgeable sales professionals. “To compete most effectively, many of these retailers stock the ‘value platform’ products and meet competition head-on. This validates their competitive stature in the minds of shoppers, making the purchase of better goods more credible. Accordingly, we sell them container quantities as well as truckloads and pallets.”

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Max Woods appoints Moxie Distribution for Arizona

​Jarred Boyle and Tracy Lassen of Moxie Distribution​
​Jarred Boyle and Tracy Lassen of Moxie Distribution​

Adairsvlle, Ga.—Max Woods Floors (formerly Max Windsor USA) has appointed Moxie Distribution of Phoenix as its exclusive, full-line distributor for the state of Arizona.

Josh McGrane, executive of Max Woods, characterized the Moxie organization as “great young businessmen with an eye to the future. Tracy Lassen and Jarred Boyle, co-owners of Moxie, have a fresh, exciting industry view in which service to dealers takes precedence over any other factors.

“As a fairly new company, Moxie has made strong inroads in the market, and is recognized by customers as an aggressive team with compelling new ideas,” he added.

MaxWoods will be servicing Moxie from its Commerce, Calif. distribution center, as well as on a direct-container basis from China.

Tracy Lassen, Moxie’s COO, said, “We are really pleased to be associated with the Max Woods hardwood line.  Like us, the company is fairly new, and recognizes that it takes superior new product styling and marketing savvy to capture the attention and imagination of retailers. We will help each other to make that happen in Arizona.”

Jarred Boyle, president of Moxie, echoed Lassen’s enthusiasm.” We have seen some of the products these guys are taking to market.  They’re a breath of fresh air, and will enable us to bring innovative marketing concepts to Arizona.”

Moxie will run the line under the MaxWoods label.  Sample placement is due to begin in November and be completed by January.

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FEI Group divisions continue to outpace the market

September 15/22, 2014; Volume 28/Number 7

By Steven Feldman

Home Solutions, MultiFamily Solutions members report strong growth

Screen Shot 2014-09-24 at 11.11.12 AMLake Tahoe, Nev.—Despite the new housing market lagging behind initial projections and a delay in the prime season for multifamily, FEI Group members are doing just fine. As supporting evidence, Jay Smith, president of the organization comprised of three networks—Home Solutions, MultiFamily Solutions and KBx (cabinets and countertops)—called FEI Group’s recent gathering “the best conference we’ve ever had,” citing mood, enthusiasm, and member attendance and engagement. “The group is rolling.”

This all correlates with significant increases in both 2013 and 2014. Smith said FEI Group members are taking market share and seeing an improvement in product mix along with greater compliance with national programs. “Our members have dedicated themselves to new approaches to the business.”

For MultiFamily Solutions members, who service large property management companies, real estate investment trusts and privately owned properties, the rental segment remains strong with occupancy rates high. However, they did have to endure a delayed start to their peak season that traditionally begins right after Memorial Day, which this year didn’t spike until July.

“If you are in multifamily, 40% of your business is conducted late May to August,” said Dave Gheesling, CEO of FEI Group. “People want to be in place by the school year. But until these last couple of months we were flat on apartment turns vs. last year. Occupancy rates were at all-time highs. But July, August and September have been record months in most regions of the country.”

What’s driving the spike? Two factors, Gheesling said. First, members believe there may have been more movement across markets. Second, for the past few years younger people were graduating college and moving back home in the throes of a suffocating job market. “Now we are seeing these people moving out of their existing situations and getting their own places.”

With that said, new multifamily construction is up 40% in 2014. “That is being driven by people getting out of college today who are not interested in diving straight into home ownership,” Gheesling said. “They saw what happened to their parents [with home values]. That’s why builders are scrambling to get new units into the marketplace.”

On top of that, he noted that financing remains tight in new home construction. “If you look at the buyer database, 25% to 27% are first-time buyers, and these people are still having a problem qualifying for a mortgage, in many cases because of student loans. Then you have 10% to 12% who are credit impaired. So we can only sell to less than two-thirds of the market who want to buy homes.”

FEI Group is driving business to MultiFamily Solutions members through an extensive national accounts program. “Our efforts are to engage and create large programs with regional and national management companies,” said Graham Howerton, vice president. “Because we cover 135 markets nationally, we are able to create one turn-key program for a management company for every community in which they have units.”

Howerton said the group had secured more than 400,000 units for its members heading into 2014, and through the first nine months of the year the number of new units brought into the program has grown 12%.

Mike Schreiber, Mikes Flooring Co., Chantilly, Va., a MultiFamily Solutions member for eight years, noted that the national accounts program has been good for his company—so good, in fact, he is up “strong double digits” this year. “New multifamily construction has been great, but in the DC area we have seen a slowdown in government spending. If growth continues, labor will become more of a challenge; no one is coming out of high school [into the trade].

Home Solutions

The Home Solutions division of FEI Group is comprised of single-family residential flooring contractors who service the top 50 builder markets in the U.S. And, while new home construction has failed to live up to some lofty expectations set forScreen Shot 2014-09-24 at 11.11.33 AM 2014, members are outpacing the market, Smith said. “Nationally, the year has not quite been what forecasters thought it would be. Starts and sales are under forecast in some markets. That said, there are a few markets that are very hot currently. The bottom line is that Floor Expo members are doing very well. We think this year simply means that the upswing cycle will be longer.”

On a positive note, Smith said members are seeing a change in product mix. On the flip side, they are challenged by labor constraints and access to credit. “We have to do more to get the first-time homebuyer in the market. That’s what is lagging.”

Home Solutions member Jim McGee, CFO and minority partner, Great Floors, with 15 locations in the Pacific Northwest, agreed labor has been his biggest challenge this year. “In Spokane, we had a lot of skilled labor that went to North Dakota when the oil boom hit, and I am surprised they haven’t returned. Young kids need to realize they could make $60,000 a year with one year of training.”

Home Solutions 2013 Member of the Year Roy Lomas Carpets, Harleysville, Pa., is seeing a mid single-digit uptick this year, but it’s not coming from its traditional new single-family home construction business. “This year, new multifamily construction has been good for us,” said Rick Forbes Jr., secretary/treasurer. “We normally have one to three projects a year, but we have six going right now with a seventh coming on board. The owners of each building say they will be fully rented before they are done with construction.”

Convention

The theme of the convention, Impact 2020, focused on developing a five-year plan so FEI Group members can maintain their leadership position in the industry. “The only way you do that is to challenge yourself to stay ahead of the curve, to be on the leading edge of the market,” Smith said.

The idea, according to Gheesling, is to think about what the group is doing, how it is doing it, why it is doing it, where it wants to go and “put some meat on the bone.” In illustration, he cited how a member’s design center will function and what it will look like. “We want to make sure our members have the finest design centers.”

One idea that has been working for members is improving their product mix in their design centers. “During the recession we got into the mindset that we were going to get into the cheapest products,” Gheesling said. “Now we have a flow of business and more confidence at the consumer level. They expect to be in their homes longer than they may have [anticipated], which presents an opportunity for them to invest in better products.”

The convention also saw a series of think tanks on critical topics such as the challenge of finding qualified labor, subfloor issues and people cost. “People are the most expensive cost for the contractor,” Gheesling said. “The idea is to keep our members as profitable as possible.”

Screen Shot 2014-09-24 at 11.12.29 AMSuppliers chime in

Now owned by industry icon Peter Spirer, Max Woods—the reincarnation of the Max Windsor brand—showed at the FEI Group convention for the first time.

The company brought products from promotional to mid price points. “The heart and soul products are what we brought to this market—birch, hickory and oak,” Spirer said.

He was attracted to FEI for a number of reasons. “As a wood company, we can’t lose sight of the fact FEI is on the ground floor of the action. They do individual homes, tracts, multifamily, institutional stuff, and they do it in a very professional manner. We always knew about their prowess and importance to the wood flooring business. To underscore, there is not one member who said their business is not moving from carpet to hard surface, including wood.”

Bamboo supplier Wellmade was a second-time vendor at the supplier showcase. Vice president of sales Rob Tarver said this group has been on its radar “because they are the best and largest contractors for new construction and multifamily. Our bamboo is perfect for new construction and multifamily. Certainly, FEI membership is best at penetrating those two markets, and they have the best installers.”

Second-year exhibitor Schönox was presenting its subfloor technology to the group after enjoying a relatively successful first year. “The industry is still in the mindset of putting a band-aid on a poor subfloor as opposed to addressing it for a long-term solution with adequate warranty,” said Doug Young, executive vice president. “FEI can be at the forefront and create value for their customers in that a property manager doesn’t ever have to worry about subfloor issues.”

Canadian carpet manufacturer Venture Carpets displayed its restyled lines of nylon and polypropylene carpet tile and broadloom for the Main Street market. Johanna Paul, director, business development, appreciates the professionalism of FEI Group. “What I value most about this group is how they focus on their supplier partners and truly make you feel like you are their business partner. They are the most successful entrepreneurs.”