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Carpet: State of the industry—Higher-end goods boost residential end of the market

August 28/September 4: Volume 32, Issue 6

By Ken Ryan

 

Screen Shot 2017-09-05 at 11.43.04 AMAfter a slow start to 2017, the residential carpet category gained some traction in the second quarter, resulting in a 2% rise in sales over the year-ago period, with units up 0.5% overall in the first half. Executives cited sales of better goods, an uptick in consumer confidence and price increases that have firmed up the marketplace.

The U.S. carpet category continues its ever-so-slight recovery from the Great Recession, its growth held in check by hard surfaces. “We have seen patterns, loops and differentiated product at the upper end doing disproportionately well and outperforming the medium end of the market,” said Tom Lape, president of Mohawk Residential.

T.M. Nuckols, executive vice president of residential business for the Dixie Group, which oversees the Dixie Home, Masland and Fabrica brands, agreed that better goods at the higher end of the spectrum and well-styled products are seeing the greatest activity in the residential market these days. If the products offer soil and pet stain protection—as many of them do—it’s a plus.

The 2% growth in residential carpet is a welcome sign for a category that has shown little to no growth in the last three years. In 2016, for example, FCNews’ research showed carpet sales down 1% to $8.7813 billion while total volume—which includes carpet and area rugs—gained 1.2% to 11.22 billion square feet.

There are some positive signs in housing that should favor a boost in carpet sales going forward. Between July 2016 and July 2017, U.S. home values increased 6.8%, according to Zillow, the online real estate database interest. That number is expected to rise another 2.7% within the next year, the company said. This uptick in home prices has helped boost consumer confidence among homeowners, which has increased two months in a row. As a consequence, the residential replacement market has experienced growth as spending on remodeling projects has moved higher. While most of that spending has been for hard surfaces, soft goods have not been shut out entirely.

However, rising home prices are a double-edge sword because it prevents many would-be buyers, especially older millennials, from entering the market. The flip side is that has resulted in a more robust multi-family segment. The multi-family production index (MPI), which provides a composite measure of three key elements of that market—construction of low-rent units, market-rate rental units and “for-sale” units, or condominiums—jumped 8 points to 56 in the second quarter as all three components increased.

“Improved units can be attributed to a fairly good builder market in both multi-family and single family as well as the return of home equities in the retail remodel sector,” said Brad Christensen, vice president, soft surface portfolio management, Shaw Floors.

Screen Shot 2017-09-05 at 11.43.21 AMThe Main Street segment of the business continues to perform reasonably well, with carpet tile continuing to grow in both small, local businesses and specified commercial. Broadloom, however, continues to lose share in both sectors.

Market research has shown consumers desire the warmth and comfort of carpet in their homes. To meet that need manufacturers are focusing on the look and feel of carpet more so than fiber type. As Christensen explains: “Consumers want a stylish, high-performing carpet that complements their uniquely curated living spaces and demand both design and function in a variety of price points.”

Rodney Mauter, executive vice president of residential marketing for Lexmark, sees value and fashion, especially, as the primary inspiration for consumers. “She wants her bedrooms and family rooms to be just as much of a statement as the rest of her home. As carpet manufacturers we must continue to exceed performance standards while offering more color and fashion choices.”

The dwindling middle
Carpet continues to play well in certain regions, in particular the upper Midwest and Northeast, observers say. Meanwhile, both the low and upper ends of the market are showing fairly brisk activity. Engineered Floors, the No. 3 carpet company, is flourishing in the lower-end polyester market, which continues to be strong. The upper end, which counts Dixie, Shaw (Tuftex) and Mohawk (Karastan), continues to shine. However, the mid-range market—$8 to $13—is struggling. “Rather than building products that fit your assets, build products that fit your customers’ needs,” Lape explained. “We have to figure out a way to create compelling products for our retailers even if it is hard.”

Innovative offerings
Screen Shot 2017-09-05 at 11.43.26 AMMohawk’s SmartStrand is an example of a compelling product that has enjoyed tremendous reception at the retail level, with new iterations like SmartStrand Reserve giving dealers more profit potential. “SmartStrand Reserve has hit the market with very solid acceptance across our dealer base,” Lape said. “Our prior research told us consumers loved luxurious soft performance carpet, and since our launch earlier in 2017 our research has now been proven true with the introduction of SmartStrand Reserve.”

Several advancements in technology have driven today’s exceptional quality, performance and styling looks. Improved yarn systems offer softer hand along with a range of visual aesthetics coupled with enhanced performance and durability. According to Susan Curtis, senior vice president, product development for Phenix, developments in tufting technology continue to open new ways to design creative carpets. She said additional attributes are being engineered into carpet products that enhance the consumer’s use and experience with the product.

Mark Clayton, president of Phenix, said innovations in tufting technology have provided opportunities for manufacturers to create more compelling textures and color palettes for the consumer.

Technology’s contribution to carpet has kept it as a viable flooring solution especially in the areas of improved stain, soil, wear and fade resistance—in addition to affordable pricing. That’s according to James Lesslie, executive vice president at Engineered Floors, whose company introduced an advanced polyester extrusion process fiber system called Apex SD.

Screen Shot 2017-09-05 at 11.43.32 AMAt Shaw Floors, its LifeGuard waterproof backing system is now offered as a trade-up option for dealers. In 2017 Shaw added LifeGuard to its Anso Color Wall in a Titanium collection with 150 new SKUs. “We’re listening to consumers more than we ever have before and adapting our strategies to meet their needs,” Christensen said. “Making LifeGuard an optional upgrade on more styles is just one example of this new approach.”

Products that offer stain and soil protection continue to resonate with consumers, the majority of whom own pets, studies show. To that end, the Dixie Group introduced a significant number of new products under the Stainmaster PetProtect brand, including many new carpet styles under its Dixie Home and Masland lines.

Phenix’s Cleaner Home carpet, meanwhile, features built-in Microban antimicrobial technology to protect against the growth of stain- and odor-causing bacteria and mold. Recognizing consumers’ growing desire for a cleaner home without cleaning more, Phenix combined these three unique components—a new fiber with two proactive technologies—to create this new carpet collection.

In terms of innovation and initiatives perhaps no one has been as busy as Engineered Floors. “Our top innovations are hard to pinpoint because 2017 has been so busy for us,” Lesslie explained. “So far this year, we’ve launched a totally new website, expanded our social media, broken ground and are in the process of completing a new modular carpet manufacturing facility, added several new Main Street commercial products through our Pentz brand and introduced Apex SD. And we’ve got four more months to go.”

 

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Resilient: The next evolution of Stainmaster—PetProtect LVT

July 3/10: Volume 32, Issue 2

By Ken Ryan

 

Screen Shot 2017-07-10 at 2.59.50 PMFor more than three decades, Invista’s Stainmaster has enjoyed the prestige of being arguably the most recognizable brand in flooring, a name synonymous with fiber durability and stain protection. In recent years, Invista has built on that heritage with the launch of PetProtect. Designed with pets in mind, the Stainmaster PetProtect carpet and cushion system resonated with consumers and pet owners for its ability to resist stains and odors.

Today, with hard surface growing exponentially, Invista executives decided the time was right to develop a hard surface product featuring Stainmaster PetProtect.

Nearly 20 months after the idea was conceived, Stainmaster PetProtect LVT was launched this spring with Dixie, Masland and Phenix as the first licensees. Despite being late to an already overpopulated LVT field, flooring dealers suggest Stainmaster PetProtect LVT most certainly will have a place in their showroom.

In preparation for this launch, Invista executives did their due diligence by drawing on consumer feedback and conducting their own R&D in developing this unique line. As with carpet, Stainmaster PetProtect LVT was created with the pet owner in mind (executives cite a statistic that claims 72% of U.S. households have at least one pet). To address that trend Stainmaster PetProtect LVT comes with two differentiating features—Claw Shield and Action Traction. Claw Shield provides a protective coating that helps resist claw scratches associated with pets. To complement the claw shield protective coating, the floors feature pet-action traction for pet paws. Both features include proprietary technology.

Claw Shield, for example, went through rigorous testing at Doguroo, a doggie day care in Atlanta, over the course of several weeks. Consumer feedback was also important in the technology’s development. Invista executives weighed both the good and negative feedback, made tweaks and delivered to the market what they deem to be a difference-making product.

“One of the key insights was our flooring reduced the slipping and sliding,” said Dana Wright, hard surface segment leader for Invista. “Claw Shield and Action Traction allow us to connect with the consumer base and helped us explore ways to solve problems and be able to deliver the benefits and make their lives better every day.”

Phenix, Dixie and Masland (Dixie and Masland are under the Dixie Home umbrella) are the first mills licensed to sell the Stainmaster PetProtect LVT line. These brands have had long histories with Invista and have embraced the Stainmaster story. Executives representing both Phenix and Dixie/Masland view the LVT launch as a brand extension, even though these companies are historically carpet mills. “The fact that we have already been participating in the PetProtect category has really made it quite easy for us to introduce this new product,” said Susan Curtis, senior vice president, product development, Phenix.

Screen Shot 2017-07-10 at 2.59.44 PMDan Phelan, vice president of marketing for Dixie/Masland, said the company’s entry into the tight LVT space would be far more difficult without the Stainmaster/PetProtect cache. “We go into this with a lot more ammunition at our disposal, and it’s not just blanks. When it comes to what makes you different, we had a simple choice—enter the market and sell LVT ourselves or enter and sell Stainmaster PetProtect LVT. Being a forerunner and early adopter of what PetProtect has meant on the carpet side—and what it could mean on the LVT/P side—will make the selling easier for the retail sales associate. It was an easy decision at the end of the day.”

Phenix created an entirely new merchandising display for its Stainmaster PetProtect LVT. Its Free Expression Loose Lay display consists of seven lifestyle boards, a collection of imagery of various geographic areas with which consumers can identify. The displays include both carpet samples and LVT as Phenix worked on a total coordination story. The displays feature an extended architectural folder that coordinates and ties in with each of the palettes. “The consumer who is looking for a well-curated and coordinated story will find this very easy to navigate,” Curtis explained.

Dixie/Masland first showed its Stainmaster PetProtect LVT display at Surfaces. Based on retailer feedback the display system was made smaller and more compact, using flip cards to maximize showroom space. There are 20 products in both the Dixie Home and Masland collections; however, each product is created to be unique. Dixie’s lineup includes 6mm and 7.5mm click offerings with a cork backing, each with different visuals and sizes. Masland is offering dryback SKUs including nine with a rigid-core construction; the sizes offered include 6 x 48 and 9 x 60 in rigid-core click in a heavy, 28 mil wear layer. “We are definitely in deep with this launch,” Phelan said.

Retailers react favorably
One potential challenge to the Stainmaster PetProtect LVT launch is the fact flooring dealers already have a well-stocked showroom containing LVT and its WPC and rigid-core offspring. However, in this case, they vowed to make room even if it means dropping another line or two.

Pierce Flooring/Carpet Mill outlets in Montana is carrying both Dixie and Masland. Greg Loeffler, vice president of sales and marketing, said the WPC/rigid-core/LVT segment has exploded in the last 24 months, albeit with very little separation among the competing players. “The products are quite similar even though everyone says theirs is the greatest. The fact is most are coming from a handful of factories in China and the differences are minimal. What’s different here is there is a unique selling proposition. Part of our thought process is to leverage the Stainmaster brand. It is still strong and valuable. We still have three design centers that are Stainmaster flooring stores, so Stainmaster sells well with our selling system and it is something our salespeople are very in tune with. This is a nice fit.”

Screen Shot 2017-07-10 at 3.00.01 PMLoeffler said the styling and construction of the Dixie/ Masland lines are very impactful and, most importantly, sellable. He especially liked Masland’s upgraded version with the heavier wear layer. “It gives us a premium option with added benefits along with the PetProtect name. Masland maybe over-engineered a bit and went on the high side of specifications, but it makes for a really high-quality product. The challenge we have today is we are competing in the weeds with all the discounters and low-cost offerings; it is a jump-ball situation with many of these products and often we don’t win because the margins are not there. We need to offer better quality and value to upsell our consumers. Masland certainly plays well into that. On our end we are going to put a lot of energy behind this.”

Amy Mitchell, sales manager for Britts Home Furnishings, with three stores in Georgia, reports that within one week of carrying Phenix Stainmaster PetProtect LVT she sold one job that comprised 1,100 square feet of LVT to cover virtually every room—except the bedroom. The buyers were a retired couple with a dog. Britts carries Mohawk, Shaw, USFloors, Mannington and Armstrong LVT, but she said there is room for Stainmaster PetProtect. “I am impressed with the visuals and the textures; it looks like wood and it has pretty patterns. PetProtect is really huge; it may seem silly to say but it is not. Dogs are going to ruin wood, period. This gives [the homeowner] peace of mind. Phenix did a great job putting together these displays and they did a really good job with the colors. I’m really excited about it. I think everyone else will be, too.”

The strong bond homeowners have with their pets has been an instrumental selling tool at Grigsby’s Carpet, Tile & Rug Gallery in Tulsa, Okla., which plans to carry both Dixie and Phenix. “It is such a good connection when you are asking about children and pets,” said Penny Carnino, vice president of operations. She called the move from PetProtect carpet to LVT a natural progression. “It’s another extension in carrying out the Stainmaster brand. If you have someone who in the past has had Stainmaster carpet, then she is much more inclined to buy a hard surface product with the Stainmaster name. If she had good results—and Stainmaster is great about taking care of any issues—she is going to feel that much more comfortable because she will have that assurance.”

Flooring dealers say Invista understands current customer mentality trends, and they responded in kind with an “all floors, all rooms” approach. By enhancing the Stainmaster PetProtect flooring portfolio, the company is able to tap into a broader consumer lifestyle approach. “It’s the No. 1 brand in flooring coupled with margin expansion opportunity for retailers,” Invista’s Wright said. “This new introduction allows us to cut through the sea of sameness.”

Invista is supporting the Stainmaster PetProtect LVT launch with national TV advertising, online videos and YouTube channel promotions. The TV campaign features a boy with his dog playing a game and includes the tagline: “Life should leave memories, not marks.” The spot began in March and runs through the end of July.

“As we have expanded our portfolios it gives us a chance to improve our messaging,” said Sakaait Mathur, senior brand manager for Invista. “Video advertising creates a bond between human and pet. This is kind of new to the market in terms of advertising and communication without mentioning the benefits of the product. Stainmaster PetProtect has solutions for the entirety of the home.”

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Stainmaster promoting pet carpet at Westminster

Stainmaster logo Kennesaw, Ga.—Stainmaster will promote its new PetProtect carpet and cushion system at the Westminster Kennel Club show in February.

 PetProtect is the official carpet of the 138th annual All Breed Dog Show.

The company says the carpet and cushion system resists most difficult pet stains and easily releases pet hair when vacuumed.
 
It will be featured in the WKC purple color at designated areas at Pier 94 and at Madison Square Garden during the show on Feb. 10-11.
 As part of the partnership, the brand is holding an Unshame Your Pet Photo Contest hosted on its Facebook page for a chance to win a trip to the show.