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Surfaces Carpet Coverage: Despite hard surface surge, mills double down on soft

February 5/12, 2018: Volume 33, Issue 17

By Ken Ryan

 

Traditional carpet mills invariably face this decision: Do we ride the hard surface tide and introduce our own products, or do we stick to our knitting and stay soft?

Surprisingly many are choosing the latter, and they are not apologizing for it. While Dixie Group, Phenix Flooring and Marquis Industries expanded their hard surface assortments at Surfaces—while Engineered Floors officially entered the category—many are passing on the opportunity to jump on the bandwagon.

“We make no bones about it, we are soft flooring,” said Brian Warren, executive vice president of sales and marketing for Foss Flooring, which showcased carpet tile and indoor/outdoor broadloom under a “carpet reinvented” theme.

The way Warren sees it, Foss’ business is good, so why disrupt the flow? “Our tile business has grown double digits each year for the past six years. Our tile business is through the roof. We have some unique technologies and have found a way to position these technologies in such a way that retailers get the advantages.”

Foss introduced DuraKnit, a broadloom line that can be installed over pad. “We’re selling $40 looks for less than $6 with a great performance story, a product that won’t fray, wrinkle or unravel. We’re pushing the attributes that only we have. We’re screaming that it is carpet reinvented. Bottom line—we love giving retailers a selling story they can position against competitors.”

Stanton is another mill sticking to soft surface. “Not now. You can’t do it just to do it,” Jonathan Cohen, CEO, said when asked if the company was contemplating a move into hard surfaces. “We are way too protective of the brand to do that.”

Stanton, which is introducing 125 soft surface products in 2018, is entering the commercial Main Street market through Stanton St. Decorative Commercial. Stanton Street is located in the Soho section of Manhattan, near the location where company founder, Sy Cohen, grew up. “We always liked the idea of getting into commercial but it had to match our identity,” Jonathan Cohen explained. “This fits for us. We can be competitive with price, and as long as we stay decorative we feel like we can have a place within the market.”

Couristan has been a soft surface company for 92 years and has no plans to deviate from that course. That’s according to Len Andolino, executive vice president–residential division, who rejoined the company last fall. “We are a soft surface company, that is who we are. The hard surface [surge] has actually helped our business. For example, our broadloom business is heavily fabricated. More than 50% of our business will be fabricated rugs. We’re pushing the envelope with the fabricated rug business.”

Southwind, a carpet and hard surface supplier, focused more of its efforts on soft at Surfaces with six new LCL patterns and six new colorpoints using its soft yarn system. “People are starting to talk about carpet again,” said Tim Gilmore, Southeast regional vice president. “With this new line we wanted to give dealers some options over the typical beiges and grays.”

Prestige Mills is another tried-and-true soft surface company with no plans to make the leap to hard surfaces. But like so many other mills Prestige is looking to leverage the growth of hard surfaces. Peter Feldman, president, said a good deal of its broadloom business ends up as rugs, in some cases cut by their dealers after shipping. “While cutting broadloom carpet into rugs is good for the rug business, you are only using part of the room with rugs, so more carpet is required if you are going to go that way,” he explained. “It is a challenge, but we are up for it.”

Surfaces 2018 marked the return of Gulistan, which went under in 2012 but has been resurrected by Lonesome Oak. John Sheffield, recently of Godfrey Hirst, has taken over as vice president of sales. Tom Mathis, most recently with Lexmark, serves as strategic sales director. The strategy going forward, Mathis said, is to focus strictly on broadloom and to be selective with retail distribution. Its lineup of 20 products is divided equally between Stainmaster offerings and solution-dyed PET. “We are pretty careful who we are partnering with,” Sheffield said. “We are looking for meaningful partners who can grow the business.”

The return of this venerable brand was well received at Surfaces, Mathis said. “Not a single person said, ‘Oh, I don’t want these guys again.’ The Gulistan brand has more equity than we ever imagined. It’s pretty synonymous with Stainmaster, so that is a plus. And despite the fact carpet is losing share, we are a breath of fresh air and we are starting with a clean slate.”

Crossover continues
Long-established carpet mills that have ventured into hard surfaces and, in some cases, expanded their offerings, have not given up on soft surfaces. Quite the contrary. Phenix, for example, introduced 25 new residential carpet products–PetProtect and polyester—and announced its entry into the area rug business under the Cleaner Home Rugs banner. “We all know carpet is the largest category, and we are expecting carpet to lose share again,” said Mark Clayton, president and CEO. “Our challenge is to keep producing unique stories around the products. The business we are serving—what we call the belly of the country, states like Oklahoma, Texas, Colorado, Utah—is still very strong in carpet.”

Clayton said the jump into rugs is a nod to the explosive growth of hard surfaces. “With so many beautiful patterns in our line this is just a natural addition to what we are doing for hard surfaces.”

The bedroom remains one of the last bastions for carpet in the residential sector, and consumers have shown a willingness to spend more for higher-end goods. To address that trend, Dixie Home launched several Stainmaster offerings with differentiated PetProtect loops and patterns as well as some multi-colored textures. “We think the consumer is buying carpet by the room, not by the whole house, and that leads to better opportunity for better goods,” said T.M. Nuckols, president, residential division, The Dixie Group. “The market is looking for better goods and products that work well with hard surfaces.”

The Masland brand showed new PetProtect collections as well as Masland Energy, a broadloom and tile program for the commercial segment for retailers targeting the upper end of Main Street.

Mills agree Main Street commercial is hot these days. Engineered Floors’ Pentz brand of broadloom and modular tile is keeping pace with several new products, including some from the former Beaulieu’s commercial division. EF’s new 500,000-square-foot carpet tile plant will be in full production in the next few weeks and has already been graded for expansion.

At Surfaces EF touted PureBac, its premium, no-latex backing system. “The dealers say they can get more money on it,” said Will Young, director of national accounts. “PureBac offers a complete story on cleanability, with no latex and a hypo-allergenic face fiber. It is a very installation-friendly product.”

 

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Flooring dealers laud mills’ decision to reinstate terms

October 23/30, 2017: Volume 32, Issue 10

By Ken Ryan

 

Screen Shot 2017-10-27 at 11.57.44 AMSpecialty flooring dealers who say their profits rely heavily on term discounts offered by the two major mills applauded Mohawk and Shaw for reinstating terms on residential carpet products.

Terms are percentage discounts for paying bills within a certain time frame, often within 10 days of receipt of invoice. Terms are a huge deal for legions of flooring dealers, as many view the payment discount as the single largest contribution to their profitability. As such, losing such a perk would strip thousands, if not tens of thousands, right off a dealer’s bottom line.

“I would say 99% of retailers base their selling price on the cost of the material with freight added,” Paul Johnson, owner, Johnson Floor & Home/Carpet One, Tulsa, Okla., explained. “No one subtracts the discount term and then figures their margin. So the best, most financially astute retailers pay their invoices on time and take the discount. The discount literally drops to the bottom line.”

Johnson noted that the World Floor Covering Association has conducted many profitability studies over the years and on average a “good” flooring retailer makes 2% net profit. “So you can readily see the positive effect discount terms have for the profitability of retailers. The best thing hard surface manufacturers and distributors could do to help the profitability of their retail partners is start offering discount terms for timely payment.”

Cathy Buchanan, owner of Independent Carpet One Floor & Home, in Westland, Mich., can attest. Each Thursday at noon she sits with her office manager and goes over the existing bills. She takes pride in knowing that over the past two to three years Independent Carpet One Floor & Home has been taking discounts. “We are totally caught up to Nov. 14 [on Oct. 24] we paid $21,824.44 [in bills] and took in a total of $841 worth of discounts from Shaw alone. To think we would be losing those discounts truly hurt and cut into my excitement every Thursday of showing my mother how much money we saved and to see her smile.”

Buchanan said a price increase of 5% isn’t the same as losing a 5% discount on terms because with price increases she can pass the increase on to her customers and reprice her showroom floors. “Yes, it is a burden especially within my 10,000-sq. ft. showroom to do that but the burden is a lot less than punishing the retailers that do take discounts. When we make our desired margins—and make money at the end of the year—everyone is happy.”

On Oct. 12, as part of an announced price increase on residential and Main Street carpet products, Mohawk had announced plans to eliminate discounted terms on residential carpet products, if purchased on that basis, in lieu of a price increase. But perhaps bowing to industry pushback, the carpet rescinded that portion and allowed the exchange of discounted terms in lieu of the announced price increase. The announced price increase of 5-6% on all of its residential and Main Street carpet products will be applied to all customers in similar manner for orders placed on or after Nov. 27 and shipments after Dec. 29.

In an Oct. 6 letter to dealers Shaw stated that instead of a standard price increase, it would move to standard billing terms of net 30 days company-wide. The manufacturer said the move would standardize terms across flooring categories and bring it in line with other building material suppliers and providers. For carpet products already sold on net terms, prices would increase 5-6%, with the changes to take effect with orders on or after Nov. 13, and shipments on Dec. 4. Shaw similarly reinstated the discount.

Flooring dealers understandably let out a collective sigh of relief. “We were happy to see they rescinded doing away with terms and decided to raise prices instead,” said Ben Boss, owner of Boss Carpet One Floor & Home, in Dixon, Ill. “Shaw and Mohawk’s concern of a level playing field is valid. Shaw and Mohawk have competitors that do not offer terms. Many dealers and their sales staff forget about the terms Mohawk and Shaw offer and will take a price without terms and unfairly compare the two prices.”

The way Billy Mahone III, manager at Atlas Floors Carpet One in San Antonio, sees it, terms are a win-win for both parties. “To me terms are an important tool for both mill and retailer, improving cash flow for the mills and helping retailers with their bottom line. I’m glad both mills reversed their decision to do away with terms because we take advantage of terms any chance we can get.”

 

 

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Royalty Carpet’s closing leaves trail of questions, angst

By Ken Ryan and Lindsay Baillie

 

andrea_mrdThe 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.

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Carpet: Mills up the ante in the fight against spills

Stain protection update

February 13/20, 2017: Volume 31, Number 18

By Ken Ryan

 

What drives carpet purchases? If ongoing research is to be believed, it’s all about stain and soil protection. So if you want customers to spend more money, the carpet products retailers offer should incorporate such treatments.

Stainmaster PetProtect from Invista was a big hit in large part because it addressed a huge consumer need, executives say.

The American Pet Products Association (APPA) estimates 70 million to 80 million dogs and 74 million to 96 million cats are owned in the U.S. Approximately 37%-47% of all households have a dog, while 30%-37% have a cat.

“Our consumer research shows pets actually influence flooring purchasing behaviors even more than children in the home,” said Brad Christensen, vice president of soft surface category for Shaw Floors.

Soil and stain protection play a pivotal role in the growing trend of healthier floors and homes. Extensive research has been done on consumer preferences toward healthy homes and how pets are incorporated into the family environment. “Consumers are looking for products that can do more for them, passively keeping their homes cleaner, healthier and looking great,” said Susan Curtis, senior vice president, product development for Phenix.

Following is a look at some recent introductions featuring stain and pet protection carpets.

Screen Shot 2017-02-20 at 3.18.48 PMEngineered Floors
The company’s Lifetime Pet Warranty promises “complete relief for you and your pet,” according to Will Young, residential brand manager. “That means we will stand behind our carpet when it comes to dog and cat accidents in the home for the life of the product.” The warranty is available on most DreamWeaver styles, particularly those on its new Your Retreat 65-color wall display, which was introduced at Surfaces last month.

Screen Shot 2017-02-20 at 3.18.56 PMLexmark
All of Lexmark’s 2017 introductions feature 100% solution-dyed PET fiber that is inherently very stain resistant. What’s more, Lexmark added Scotchgard Protector by 3M to provide greater stain and soil protection. This one-step application process treats the entire carpet fiber. As a result, spills stay on top of the surface and dirt does not adhere to the floor.

Screen Shot 2017-02-20 at 3.19.01 PMMohawk
SmartStrand Forever Clean, installed in more than 7 million homes and heralded for its durability, stain resistance and comfort, has become an even smarter choice for active families with pets. Mohawk enhanced this popular carpet with All Pet Protection, a warranty and protection system that covers all pets, all accidents, all the time. SmartStrand Forever Clean comes with Nanoloc, an advanced nanotechnology that encapsulates the SmartStrand fiber to create a spill and soil barrier.

Screen Shot 2017-02-20 at 3.19.07 PMPhenix
Phenix’s major 2017 introductions address consumer needs related to pet protection and healthier homes. Cleaner Home, which comprises 10 new carpets with antimicrobial protection, was developed in an exclusive partnership with Microban, a leading producer of antimicrobial additives. As well, Cleaner Home was developed using a highly engineered PET polyester yarn called Opulence HD and includes SureFresh, an odor capture technology to provide a smarter soft surface flooring option.

Screen Shot 2017-02-20 at 3.19.13 PMScotchgard by 3M
When applied during the manufacturing process, Scotchgard by 3M-branded products provide a protective treatment by surrounding each individual carpet fiber with an invisible shield, making the carpet resistant to water- and oil-based stains as well as soiling from everyday use.

Screen Shot 2017-02-20 at 3.19.27 PMShaw
Shaw Floors continues investing in carpets made with its exclusive LifeGuard waterproof backing system, which provides an optimal carpet for pet owners. “Thanks to this industry-exclusive system, pet accidents stay on the surface longer for easier clean up,” Christensen said. “And for those accidents not discovered immediately, consumers now have the peace of mind knowing that pet urine and other liquids will never soak through the backing, into the cushion and onto the subfloor.” New for 2017, the LifeGuard waterproof backing system was added to Shaw’s popular Anso Color Wall in a product called Titanium, which offers 150 new SKUs.

Screen Shot 2017-02-20 at 3.19.33 PMStainmaster PetProtect
Invista’s Stainmaster PetProtect carpet and cushion system provides a breathable moisture barrier that helps prevent accidents from penetrating the padding and subfloor, which enables more thorough cleaning. As well, PetProtect also reduces the attraction between pet hair and carpet, allowing consumers to easily remove the hair with normal vacuuming.

Screen Shot 2017-02-20 at 3.19.42 PMStanton
Stanton announced a new partnership with 3M Scotchgard with the introduction of 15 products treated with Scotchgard Protector by 3M. The carpet introductions are made of nylon type 6 and type 6,6. Each of the new Stanton styles is treated with Scotchgard Protector 3M and is covered under a 10-year stain and soil protection warranty.