Article Number : 3735 |
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| Date | 10/10/2008 11:15:10 AM |
| Written By | LGM & Associates Technical Flooring Services |
| View this article at: | //floorbiz.com/BizResources/NPViewArticle.asp?ArticleID=3735 |
| Abstract | By Sarah Zimmerman HICKSVILLE, N.Y.—Even with a continual drought in the housing market, an uncertain economic future and an ever-looming credit crunch, the resilient category has yet again maintained a “glass is half full” attitude... |
| Article | By Sarah Zimmerman HICKSVILLE, N.Y.—Even with a continual drought in the housing market, an uncertain economic future and an ever-looming credit crunch, the resilient category has yet again maintained a “glass is half full” attitude. Though sales, both in units and dollars, are not up thus far in 2008, leading mills report similar declines to last year’s close—overall low to mid-single digit declines in dollars and high single-digit declines in units— with commercial once again outpacing residential. Kim Holm, president of residential business for Mannington, said units were pushed down this year by the housing slump and slow replacement market, while rising raw material and energy costs have pushed prices up. On the commercial side, he noted business continues to hold its own, but warns of weakness in the segment moving forward. However, Holm pointed to the category’s diversity and increased global presence as a plus looking toward to the future, naming felt-back sheet goods, recycled products, glass-back sheet goods, luxury vinyl tile (LVT) and new installation systems as positive advancements. “Ultimately, competition drives innovation and the consumer has never had a broader selection of resilient choices than she does today.” He noted 2008’s trendsetter is realism. “Resilient products continue to look more realistic each and every year. It’s always been a category known for performance and durability, but now it’s providing design options like never before.” Armstrong reported an optimistically off year heading into quarter four with slightly better numbers than the masses. The mill did, however, note similar sector findings—commercial carried the category, residential remained unrelinquished. Allen Cubell, vice president of product management, residential resilient, again looked to the housing slump and material inflation to explain the low-single digit decline in sales. However, he noted technology and product variation are still driving the segment forward. “LVT, glueless and fiberglass floors are doing well this year,” he said, pointing out realistic visuals, installation advantages and durability as key selling points. He noted MODe and StrataMax as segment leaders. Dominic Rice, vice president of product management, commercial resilient, said overall commercial held its own this year, but started softening in the third quarter due to economic conditions, consumer confidence and decreased demand. He highlighted LVT as a leader now and in the future due to its design capabilities and flexibility, and pointed to sustainable innovations—such as the mill’s Migrations BBT—pioneering forward. In accordance, Tarkett reported a steady year on the commercial side with undetermined residential findings to date. Diane Martel, vice president of marketing for Tarkett Commercial, said retail and office sales dropped while other sectors stayed flat, however, commercial sales remained stable in most markets. She explained to keep ahead of the curve, Tarkett looks to technology and cost differentiators. “We’ve strategically kept ahead of the game with new technology and products. Plus, we continue to implement improvements in our manufacturing process in order to keep costs to a minimum.” Similarly, Gary Finseth, Tarkett Residential marketing director, said the mill offered broader and more diversified SKUs—specifically in its Fiber-Floor line—to appeal to the everyday consumer. “Besides being far less expensive and offering great designs, resilient sheet flooring offers the performance consumers prefer for their day-to-day living.” He noted, optimistically, that although the economy remains a concern for everyone, Tarkett is bullish that consumers are looking for performance, value and practicality and will consider resilient an attractive option moving forward. Martel noted increased environmental concerns will help drive education and the category in 2009. Like others, Don Evans, vice president of sales and marketing for EarthWerks, said 2008 will round out similar to last year on the resilient side, with commercial again holding weight for residential— commercial sales 60%, residential 40%. He pointed the finger at the economy and almost non-existent new construction. However, he said product advancements and commercial business will keep the future bright. “LVT has been phenomenal for EarthWerks and will only continue to grow next year,” he said, noting it’s easy to install and decorative. He also listed glueless planks and tiles as high sellers moving forward. “It is very important to offer innovative and stylish products today and moving ahead,” he said. “Everyone will have new offerings; you need to stand out to succeed.” And, the new kid on the block, LG Floors—which only engages in the commercial sector— will again record growth for 2008 with LVT and sheet sales more than doubling. However, Harry Brownett, vice president of sales and marketing, explained, “Since we are new to the industry, we’re small enough where we have to grow to stay afloat.” So, he said the company continues looking for more affordable options to combat the dwindling economic standing. Overall, Brownett said he’s happy LG is on the commercial side of the category—as it is still on the up-and-up—where he predicts a shift toward rental properties to come. He also noted an increase in healthcare and education arenas, continued growth in LVT and enthusiasm for bamboo, vertical and linear visuals. Specifically looking at LG’s future in the market, Brownett said, “We will look to continue growing business as much as possible, and continue to defy the laws of gravity [the economy] as we’re seeing now.” He said one great thing about resilient is the fact there is still a lot of potential in the category; a lot of room for new technology to come. |