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News: FCA Network celebrates 20th anniversary

April 30/May 7, 2018: Volume 33, Issue 23

By Ken Ryan

Puerto Vallarta, Mexico—Against the scenic backdrop of the Pacific Ocean and the Sierra de Vallejo mountains, FCA Network celebrated its 20th anniversary in grand style here last month, complete with a 12-piece Mariachi band, celebratory toasts and, of course, a successful business gathering.

The conference included a vendor showcase featuring a round-robin format in which pairs of retailers spent 20 minutes at each exhibitor station before rotating. The format was well received by suppliers and dealers alike.

“The round robin was awesome,” said Welton Davison, vice president, strategic accounts for Shaw Industries. “There’s no better way to connect. You can talk specifically to important dealers.”

Bob Noe, president of Pacific Solutions, added, “I loved it. We have a captive audience; it couldn’t be better.”

FCA dealers had similar reactions. Sheri Delp, manager, Legacy Flooring, Olathe, Kan., said accessibility to vendors was a big benefit to her business as she looks to leverage the buying power of the group.

FCA Network comprises 51-member retailers encompassing 67 storefronts; many of which readily admit they would not be in business today without Olga Robertson, president of FCA Network, and her management team.

Buddy Mitchell, co-owner of Simply Floors in Denver, is one of those dealers who was thrown a lifeline. When he was in the market for a buying group, he Googled “carpet buying group,” and Olga Robertson’s name appeared. He called the main number and was startled when she picked up the phone. At the time, Mitchell said he was being “blocked” by a significantly larger retailer in his market who tried to “stifle” his business. He was unable to get product from the major mills.

“FCA quickly stopped that,” he said after joining the group. “Without FCA, I wouldn’t have a business today. And now I have a 3,000-square-foot showroom. I think there are a lot of stores out there that don’t know about buying groups. They say they don’t want to be controlled, but FCA isn’t like other buying groups. They gave me the start I needed but I can buy anything I want. Olga is a great leader, and she is picky. She doesn’t just select anyone who applies to the group.”

It is true that Robertson employs a strict screening process. In candidates she looks for people who are willing to be flexible, who can adapt to change, who are embedded in their communities and hard workers. But unlike other groups, they don’t have to change their store names to comply because Robertson believes “their store is their brand” with many of them already established in their respective markets.

Carpet Source, for example, has been a trusted name in the Albuquerque, N.M., market for 25 years, and its place in the market has only been enhanced by its affiliation with FCA Network, according to Don Lovato, owner. “It’s like having a brotherhood here. We share best practices because we are not in competition with one another; it’s symbiotic. At these meetings, everyone walks away with something valuable for their business.”

Being able to help hard-working people succeed in business is what drives Robertson. “What keeps me going is the ability to help someone who really just needs a chance,” she said. “Of course, we cherish our vendor partners as well. We wouldn’t be here without them.”

Discussing disruption

John Godwin, retired executive from Shaw Industries and longtime friend of the group, was the keynote speaker. One topic he touched on was disruptive technologies. He cited Uber, Airbnb, solar power and smartphones as examples. In flooring, rigid core is of that ilk. “Rigid core boards will take share from every other hard surface category—that’s disruptive technology,” Godwin told FCA retailers. “It’s an exceptional product.”

Godwin encouraged dealers to make themselves uncomfortable; in other words, step out of their comfort zones. “You have to change the way you think. It is the only way to grow.”

That change in approach also applies to sizing up the competition, specifically big box stores like Home Depot and Lowe’s. Godwin suggested flooring dealers should walk into a Lowe’s or Home Depot every other week and be inquisitive. “See what they are doing; ask basic questions such as ‘What is your best-selling hardwood?’ Every consumer who is buying floor covering is going to go to Home Depot and Lowe’s as part of the shopping process.”

Godwin went so far as to suggest retailers have Lowe’s or Home Depot install flooring in their offices to see how the big box associates/installers handle that part of the process.

“A differentiator to the consumer is to guarantee that ‘we will provide you the right product for your application and stand behind it because Lowe’s and Home Depot don’t have the sales team to do that,’” Godwin said.

Dennis Thiets, senior vice president of residential sales, Mohawk, spoke to FCA members about Air.o, the company’s new category of united soft floor covering known for its healthier choice benefits and ease of installation. “Indoor air quality is absolutely critical,” Thiets said. “Paint used to contain 100% VOC, now it is down to 20% as consumers complained about its harmful effects. We believe they will vote the same way for carpet.”

With the average age of today’s installers at 54.5 (Mohawk’s figure), the ease of installing Air.o is another benefit for dealers. “We have lightning in a bottle here,” Thiets said. “Few people are entering the [installation] trade and Air.o is so much easier to install, but this is not a do-it-yourself product. It is exacting.” Overall, it should take about 30% less time to install Air.o vs. regular carpet, he said.

Empire Today, the shop-at-home giant, is private labeling Air.o and making a big push in its TV commercials. As Thiets explained, “Empire is promoting this in a big way and has first-mover advantage.”

FCA’s Robertson called Air.o “disruptive technology” and urged members “to think hard about this product. You have to say this is the direction we want and take the lead here. Open up your mind to this new disruptive technology. It truly is a healthier choice.”

In addition to Air.o, the members were briefed on RevWood and TecWood as the company makes a strong push in hard surfaces this year.

Members were also briefed on new offerings from Congoleum (CLEO Home Studio); Engineered Floors’ PureBac by DreamWeaver; and Signature Classique, a private branded Phenix display with their top polyester styles.

To round out the event, members and vendors alike came together Saturday evening for the group’s annual awards banquet. The event turned out to be a spectacular setting of camaraderie, good food and great fun.

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U.S.-China tariff tiff troubles some flooring executives

April 2/9, 2018: Volume 33, Issue 21

By Ken Ryan

 

Flooring executives are acting with trepidation amid the escalating trade dispute between the U.S. and China, which ratcheted up a few notches last week when the Trump administration threatened to impose tariffs on some $50 billion in Chinese imports across 1,300 categories of products.

The imports targeted for 25% levies range from high value-added goods, such as medicines and medical equipment, to intermediate products like machine tools and chemicals as well as durable consumer goods such as dishwashers, TVs and automobile parts. The list also includes machinery used in the production of some flooring products, including carpet and rugs, as well as milling or molding machines for products such as wood, cork, hard rubber, plastics or similar hard materials.

The day after Trump’s announcement, the Chinese Ministry of Commerce announced plans to impose a 25% tariff on $50 billion worth of U.S. exports. The 106 affected products included soybeans and chemicals and came one day after China announced tariffs on $3 billion in imports of U.S. food and other goods, 128 categories in all.

The penalties will not happen right away, if at all. The designation of targeted products will be followed by a comment period in which American companies can provide feedback to the Trump administration on the product choices. The administration will hold a public hearing on the submissions on May 15 in Washington, and companies will have until May 22 to file final objections.

The move stems from a White House investigation into China’s use of pressure, intimidation and theft to obtain American technologies.

Flooring executives argue that in a global economy, any trade war between economic powers would ultimately result in a slowdown of the world economy. Thomas Baert, president of CFL Flooring, a China-based LVT supplier, said issuing large import tariffs sounds like a great idea since theoretically it would help local production in the West but would hurt categories like LVT, which are mostly sourced in China. “In our industry, the product categories that are imported at this stage cannot be made on the domestic machines,” Baert said. “Although several manufacturers are now transforming some production lines to be able to, it is questionable whether this will truly replace China production.”

Don Finkell, CEO of American OEM, a domestic wood manufacturer, had a different take as he pointed to the U.S. trade deficit. “We’re running at an $800 billion trade deficit with the rest of the world, of which $500 billion of that is with China. Most economists say that it is unsustainable, but they don’t really agree on what the consequences are. It’s been this way for more than a decade and growing. Since more jobs are involved in making a product than in importing a product, loss of jobs seems to be the long-term consequence of a trade deficit.”

Finkell said wood flooring going to China from the U.S. has a combination of tariffs, fees and taxes in the range of 27%. If there is a tariff on wood flooring under these trade actions, he said he would expect it to be in the range of 25%. He termed it “significant but not catastrophic to the industry.”

Flooring observers say the tariffs—should they be implemented—would impact the full line distributor to a greater extent than other sectors since wholesalers have been importing LVT/WPC/SPC products in large part to promote their own private-label brands. Jeff Hamar, president of Galleher, a top 20 distributor from Santa Fe Springs, Calif., which sources from China, said he would be very surprised if flooring is ever involved in the tariffs. “There are already duties on wood flooring produced in China so, in theory, the government is already adjusting those prices to reflect market realities,” he said. “If they were to go after rigid LVT flooring the argument would be that there is so little U.S. domestic capacity, who are they harming? Clearly, any duty would be passed onto the consumer and would result in higher prices. Duties on LVT would cut the gap between wood and LVT possibly helping wood flooring sales.”

Jonathan Train, CEO of Houston-based Swiff-Train Co., which also sources extensively from Asia, is clearly not an advocate for excessive tariffs. “Small tariffs that are clearly understood and fairly implemented are fine and do not block trade,” he said. “Plus, they add a reasonable means of revenue for the government. But larger, volatile and retroactive tariffs disrupt markets unnecessarily and do not fix anything.”

Many economists see a trade war as little more than punishing the other country rather than protecting domestic producers. Some flooring executives have similar views. “Unfortunately, it’s going to be a ‘tit for tat’ kind of game that we can’t afford to play,” said Olga Robertson, president of the FCA Network. “Imagine just for one second if Walmart couldn’t fill their stores with goods—it would be Armageddon.”

manufacturing to make more stuff here in the U.S.,” said Olga Robertson, president of the FCA Network, Shorewood, Ill. “But unfortunately, it’s going to be a ‘tit for tat’ kind of game that we can’t afford to play. Imagine just for one second if Walmart couldn’t fill their stores with goods—it would be Armageddon.”

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FCA Network: Retail members praise industry’s ‘best-kept secret’

March 27/April 3, 2017: Volume 31, Issue 21

By Ken Ryan

 

Screen Shot 2017-03-31 at 10.27.17 AMChicago—Cottonwood, Idaho, is located on the Carnas Prairie (population 910, as per 2010 U.S. Census), 158 miles from Spokane, Wash., the nearest city with more than 100,000 people. It is home to Hoene (pronounced Hay-nee) Hardware Co., a 108-year-old, fourth-generation retailer that sells items including appliances, bedding, furniture and flooring—and is the newest member of the FCA Network.

Gus Hoene, owner, said that after buying out his partner last year he wanted to join a group. He started looking online and came upon the FCA Network and Olga Robertson, its president. Hoene said he dialed an 877 number and Robertson immediately picked up. “I was driving and had to pull over to the side of the road because I didn’t think I would get through, and I wasn’t prepared to talk,” Hoene told FCNews. He spoke with Robertson for 90 minutes and verbally committed to joining the group.

To seal the deal, Robertson personally visited Hoene’s Hardware. She flew to Spokane, traversed rugged mountain ranges and arrived “white as a ghost” from the trip, Hoene said. During the visit, Robertson rearranged the store’s merchandising and collaborated on a new marketing slogan for the store. “Olga bulldozed through my store, which I liked,” Hoene recalled. “She said, ‘Move that,’ ‘Get that crap out of the window,’ ‘Put that here.’ The store has never looked better since she redesigned it.”

The Hoene Hardware scenario is not uncommon at FCA Network (except perhaps for the long and winding road traveled), where Robertson and her team are a mere phone call away. FCA Network is not the largest buying group, but to hear its retail members tell it you would be hard pressed to find a more loyal group of dealers.

“The FCA Network may be the best-kept secret in the industry,” said Carlton Billingsley, owner of Benton, Ark.-based Floors and More, a member for 15 years. “I don’t think they realize how great having a female leadership of a flooring buying group adds to each member’s success from not only a woman’s expertise, but the female perspective of what the customer really wants.”

The majority of FCA’s newest retailers (it has 54 members and 62 storefronts) come via online searches or referrals from existing members. As Robertson explained, “We don’t have people beating the bushes looking for new members.”

FCA Network, which bills itself as the low-cost buying group with high-powered expertise, is unique in that it is the only retail group actually run by retailers (it has its own corporate stores). The group, an offshoot of Floor Covering Associates, a $40 million-plus retailer based in Shorewood, Ill., was launched in 1998 with the goal of assisting independent retailers in expanding opportunities through marketing, merchandising and buying power.

Appropriately, this year’s convention theme was “Opportunity Knocks,” and against a backdrop of an improving economy and more favorable housing numbers, the outlook is indeed bright for the group. “I really believe there are unlimited opportunities for us,” Robertson told members. “We all have to step up our games because the status quo is not a business strategy. Retail is getting more complex every day. Creative thinking, networking and the strength of our product assortment are what are needed. FCA has the muscle to help [members] survive and thrive.”

Screen Shot 2017-03-31 at 10.27.49 AMDennis Thiets, senior vice president of residential sales for Mohawk Industries, a keynote speaker, tapped into Robertson’s positive outlook in his address, saying, “There is once again reason for optimism all around us. If you look at consumer confidence, for example, the most optimistic of all age groups is 35 and under, which is very encouraging for our industry.”

Ninety percent of membership attended the Chicago event, which is par for the course, and yet a rather significant statistic considering the conference is not mandatory. “Our members are here because they want to be here,” Robertson said. “They are committed to this business.” As with everything with this group, no program or product is mandated; retailers remain autonomous in how they want to run their business. FCA Network is there to provide the necessary support through professional assistance.

Bob Gaither, owner of The Carpet Gallery and Quality Carpet & Flooring, Akron, Ohio, was one of the original members of FCA Network. He said each convention gives him a renewed sense of purpose. “I wouldn’t call it a pep talk, but I think it is a shot in the arm when I come here—and when I get back to the office I am fired up. I remember Bob Hill [FCA Associates founder] saying 15 years ago that if you did things the same way you did them a year ago, then you are doing something wrong. This group is constantly evolving with products and programs, which they have to do because the industry is evolving.”

Supplier executives who took part in the vendor trade show said FCA Network’s can-do spirit starts at the top. “While a lot of groups help out with their buying power, Olga does that and more—she helps them with their merchandising and store layout,” said Ann McDermott, vice president of national accounts for Shaw Industries. “Many of the smaller dealers in this group who may not have known where to turn if they have a problem can count on Olga. She takes care of their needs. She’ll go into their stores and give them a facelift. She really beautifies their stores.”

Joe Ross, regional vice president of sales for the north central region, Phenix, noted, “Olga always tries to create a unique venue to inspire her members in a different way, whether it is product assortment, merchandising or digital platforms.”

Robertson is happy to oblige. “FCA Network is a partner in our members’ success; helping them improver their profitability while maintaining their local identity.”

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Women in Flooring – Olga Robertson: Taking risks, making mistakes part of the journey to success

Volume 27/Number 26; April 28/May 5, 2014

By Jenna Lippin

SONY DSCSONY DSCWhen Olga Robertson, president of FCA Network, was first approached about joining the flooring world in the early 1970s, she was reluctant to get on board. “I said, ‘No, that’s not for me. I’m not going to work in a floor covering store.’ The only knowledge I had of flooring at the time was that my mom ordered carpet from someone and he ran away with her money, so that wasn’t a good experience.”

However, Robertson at the time was working as an insurance claims analyst, a job, she said, that “bored her to tears.” A friend who worked as an installer suggested she talk to Bob Hill, owner of Floor Covering Associates (FCA) in Shorewood, Ill., a suburb of Chicago. One interview later, Hill offered her $15 more a week than she was making, so she decided to take the position as “something transitional.” Continue reading Women in Flooring – Olga Robertson: Taking risks, making mistakes part of the journey to success

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FCA Network preps for the future

by Emily Cappiello

Chicago—While the road to recovery has been rocky, FCA Network is giving its members a map on how to navigate the path ahead. “We are here to help you prepare,” Olga Robertson, president of FCA Network, told members at its  annual convention held  here from March 25 to 27.

Robertson and her team did just that. The group went with a retro theme, she said, because “sometimes it’s good to remember the past so you don’t make the same mistakes and sometimes it’s good to remember the past because you can remember something that worked and do it again.” Continue reading FCA Network preps for the future

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Credit: How to upsell the customer every time

by Ken Ryan

Ken Weisbacher, owner of Carpetland Carpet One in Cincinnati, remembers the time when five-year financing terms were the norm in the flooring industry and provided the impetus for dealers to upsell consumers.

That sweet spot has been reduced to 12 months (on average) or 18 months during the economic downturn, according to Weisbacher and others, who noted the use of financing is still very important, albeit less prevalent than a few years ago. Continue reading Credit: How to upsell the customer every time