Article Number : 2310 |
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| Date | 8/19/2007 4:16:16 PM |
| Written By | LGM & Associates Technical Flooring Services |
| View this article at: | //floorbiz.com/BizResources/NPViewArticle.asp?ArticleID=2310 |
| Abstract | By Louis Iannaco The famous line uttered by a long-time New York City mayor, “So, how am I doing?” used to provoke many different responses during his tenure. It all seemed to depend on whom you asked and at which time you asked it... |
| Article | By Louis Iannaco The famous line uttered by a long-time New York City mayor, “So, how am I doing?” used to provoke many different responses during his tenure. It all seemed to depend on whom you asked and at which time you asked it. That seems to be the case with the current state of the carpet industry, as broadloom executives many times had varying thoughts about the same subject—as different as many of the carpet styles currently being offered today—while other times a consensus was actually reached. Obviously, the slowdown in the housing market continues to affect the residential broadloom business, as it does so many others. But while the effects of the slowdown may have dragged on longer than most expected, there still seems to be a glimmer of optimism for what may lie ahead in 2008. However, commercially, things presently couldn’t be more on the opposite end of the spectrum as executives continue to report overwhelmingly positive news. Said Randy Merritt, president of Shaw Industries, “We feel the residential industry is off considerably due to the issues around the builder business and slower retail traffic. We believe the residential part of the industry is off 12% to 15% with the builder segment off the most by far.” On the commercial side, he added, “the business is much stronger and carpet tile continues to be one of the fastest growing segments of any product. Retail business traffic has been soft and consumer funds have been challenged by factors such as the rising cost of fuel, increasing variable mortgage rates, higher energy costs and so on. That said, we hope to see some improvement for the third and fourth quarters.” Mark Clayton, Beaulieu of America’s executive vice president of marketing, noted, “We have performed reasonably well thus far this year considering what a difficult market we are experiencing. Obviously, the slow down in the housing market as well as the slow in residential replacement has had an impact on our overall business. The residential replacement and builder segments both began to slow the second half of 2006, and have remained soft throughout this year.” Cathy Mansour, director of marketing for Beaulieu Commercial, was understandably more optimistic than her colleague in the mill’s residential division, and noted a common theme heard from many in the industry about modular tile. “Beaulieu Commercial continues to grow in all market segments and our three brands, particularly, Aqua Hospitality. Sales of Nexterra tile has significantly increased now in its third year in the marketplace.” Jonathan Cohen, executive vice president for Stanton Corp., said, “Although the environment in 2007 is more challenging than most of last year, Stanton was able to make the necessary adjustments in the second half of 2006 that has strengthened our position this year. Sales are slightly off budget, but we remain confident and optimistic in our business plan. While the residential market is tougher than last year, the commercial business has been solid in 2007.” Mohawk’s chairman and CEO, Jeff Lorberbaum, continued the sentiment of hot commercial, cold residential. “Commercial sales were stronger than residential as modular carpet continued to gain market share. Raw material costs increased during the quarter, and we announced a carpet price increase in May of 4% to 6%, which we began implementing in June. Promotions continue at a greater pace to stimulate sales and balance asset utilization in the industry.” How the tide will turn He added, “We expect the U.S. residential environment to continue to be difficult during the third quarter. The management team is committed to maintaining the proper balance between cost cutting and being prepared for a future turnaround.” Merritt noted, “We must remember, our industry is cyclic, and recent years have been the best in the history of the flooring business. Our approach during the slower retail and builder climate that we’ve seen in ’07 is to continue what we do best: create innovative products in soft surface flooring, enhance manufacturing and distribution efficiencies, and continually improve our service levels to our customers.” The flooring industry continues to lag behind other consumer durables in the ‘excitement factor,’ he added. “We are competing for consumers’ dollars with electronics, home fashions and other high-interest categories. “Shaw is creating excitement among consumers with our advertising that presents inspiring flooring messaging,” Merritt explained. “We are carrying that excitement through at retail with innovative products and displays. Shaw green ads are appearing in top consumer publications and Shaw Green Edge POP will be in stores by the end of summer. When a consumer walks through the door of one of our dealers’ stores, we want her to shop that store and purchase a Shaw product.” According to Cohen, Stanton’s Web site has had a positive impact in the marketing of the company and its products. “We are planning to re-vamp it this year. We are also promoting our natural fiber products like wool in a much bigger way. We believe in the long-term importance of this movement and have created a campaign around our ‘naturally green’ theme.” Green is the word As time marches on more industries are becoming environmentally conscious, and the carpet industry continues to lead the way. “You can’t open a newspaper or magazine without reading about the newest green product or service,” said Merritt. “The introduction of Shaw Green Edge last fall was at an opportune time. However, Green Edge is not a marketing gimmick that was quickly constructed to participate in a trend. The initiatives listed on shawgreenedge.com are processes, accomplishments and practices that have taken Shaw over a decade to put into place.” Environmental awareness is an integral aspect of the Shaw culture, he added. “The introduction of Green Edge has been as beneficial internally as it has externally. Shaw associates have truly embraced the collection of our environmental initiatives and are consistently seeking better environmental practices or undiscovered Green Edge initiatives throughout the company. Many companies have reacted to the green ‘revolution’, but Shaw has simply restated a long-standing stance. We’re very excited about the leadership position we have with ANSO nylon, EcoSolutionQ, and EcoWorx as true cradle-to-cradle products.” Beaulieu is committed to protecting and preserving the environment and its natural resources, noted Mansour. “As we go beyond just environmental compliances, we’re integrating sound environmental practices in all we do. As a result of this initiative, our commercial carpet manufacturing facility is the first mill to include 100% of our product offerings with post consumer recycled content. As we continue to find solutions to our environmental goals, we are exploring energy-saving techniques, managing our natural resources and integrating environmental factors into purchasing, operating and manufacturing decisions.” Concluded Lorberbaum, “We’re focused on environmental stewardship and will be presenting our many initiatives under a program identified as Greenworks. This program includes recycling both post consumer and industrial waste, utilizing bio-based raw materials and energy, and reducing water usage, energy consumption and emissions. Greenworks is beneficial for our customers, our communities and the environment.” |