Hicksville, N.Y.—According to one of the leading industry associations as well as some wood flooring executives, the hardwood category enjoyed a strong 2004, with even more positive developments seen on the horizon for 2005. Hardwood flooring shipments for October 2004 were 60,493,000 board feet, the highest level since June of 2004, according to industry sources. Figures for the same month in 2003 show shipments of 66,107,000 board feet. The October 2003 numbers, however, were a statistical anomaly in that those figures included a significant amount of product from a specific manufacturer that was reported as October shipments but in reality had shipped earlier in the year.

More compelling is the fact that October represents the second best month for shipments in 2004 and is the third month this year shipments have topped 60 million board feet. Prior to 2004 (and excluding the October 2003 anomaly), the 60 million-foot figure was last topped in June 2001. Cumulative shipments for the past 12 months were 667,790,000 board feet, some 34 million feet, or 5%, higher than the same 12-month period one year earlier. Year-to-date shipments for the first 10 months of 2004 are 563,845,000 board feet, about 6.5% higher than the same period in 2003. Shipments through 10 months of 2003 were 529,169,000 board feet.

“We’ve experienced double digit increases [for 2004],” said Chris Thompson, Mirage’s vice president of sales and marketing, “and have exceeded our expectations.” While 2005 will see some “modest increases” in price due to energy and other costs, noted Thompson, “we still had excellent growth across the board in 2004, including both traditional and exotic wood products. Our exotics did well, but to meet budget you’ve got to grow across the board and that’s what we did.” While the year has been solid, he noted, 2004 saw some obstacles for Mirage.

“The biggest challenge we faced this year involved capacity. What we did about that was, we doubled the capacity of our engineered product. If you asked any of our customers, that would probably have been their biggest issue with our company, that they wanted more engineered products. So, to address the issue, we doubled our capacity for 2005.” “On a broad scale, an issue for 2005 that everyone in the industry faces is the housing market,” he explained, “and what is going to happen there with the impact of rising interest rates. What can we do about the interest rates? I don’t know if there is anything you can do about it. You just have to be aware of it and make whatever modifications or adjustments you can along the way with regard to what is happening in the marketplace.”

Economically speaking for 2005, Thompson noted, if the first month following the election is any indication, things look extremely positive. “Many dealers said, in October, leading up to the election, that their retail businesses had been very stagnant. What I’ve heard since, from across the board on the retail side is, things have been extremely positive for the last month.” John Woolsey, director of marketing for Anderson, noting the hurdles the mill overcame during the past year, said, “We did very well in 2004—it was another record year for us. We almost doubled our display placements with our new, Anderson Appalachian Fashion Showcase unit. We almost put as many of those out as we had existing displays in the marketplace. Several buying groups took on the line during the year. We’re not making product for them, it’s under our own brand. This is important to us as we believe our brand has value in the marketplace.

“We’ve also strengthened our distribution nationwide,” he added. “These were all things that were actively on our list that we felt we needed to accomplish in order to have the growth that we’re looking for both this year and also, going into 2005.” On pricing, Woolsey noted, Anderson had some very slight adjustments and “we hadn’t raised our price in about eight years. We did have some small increases, all of which were under 3%. They were selective.” On trends, Woolsey noted, the handcrafted products Anderson is known for is what the company had the most success with throughout the year. “That is not strictly limited to handscraped products, as we’ve seen a lot of them come into the market this year.

What is interesting is, Virgina Vintage, our primary handscraped product, and Delamano, both of them had huge increases this year. So we haven’t seen much effect from all the competitive and Chinese handscraped products that have now come into the market. Whether we will in the future, we just don’t know. “The biggest problem I’ve seen with exotics in 2004,” he continued, “was availability, particularly the stuff coming out of South Amercia. I know one company in particular that had real challenges getting product out of the ports of Brazil in late spring and early summer. I don’t know if it has resolved all of the problems yet or not but it was common knowledge in the marketplace. There are a couple problems with all your exotics.

“One of them is,” he explained, “consistency, meaning the shipment that you get this month is the same as the shipment you received the month before and matches the sample you have in your rack. Secondly, you’re pulling product on the water. You’re at the mercy of, not only your ports and labor unrest, but also the ports they’re debarking from. “Exotic is such a broad category now,” added Woolsey. “We can talk about it coming from the Pacific Rim, Central or South Amercia or even Africa and Australia. Certainly, they’ve generated interest in the marketplace and we have seen increases in ours. And we’ll probably introduce more for next year.”

Two things Anderson is very sensitive to is, he noted, is being able to assure consistency in supply and also in product. The other is “what we call, chain of custody. That is, there is a lot of product, particularly coming out of the Pacific Rim, that is coming from illegal logging, both from Indonesia and Malasyia. We’re very committed to making sure that everything we sell doesn’t come from either illegal logging activities and activities that are stripping the environment. This goes way back with our company.”Market research continues to show the solid market is shrinking, noted Woolsey.

“It’s shrinking at about 3% a year, while at the same time engineered is growing at about 3% per year. So there is a 6% a year change going on since 2001. We’ve seen this consistently. This means, however, that solids are still a substantial part of the marketplace and they are not going to go away. But, at the same time, from Anderson’s perspective, we are staying out of the commodities solid business. “We’ve entered, what I’d call,” he explained, “the high-end, BMW handcrafted solid business, and the industry will see more of that next year.” Going into next year, Woolsey noted, assuming the economy continues to expand, “the displays we’ve invested in are going to pay off next year, as well as our relationships with the buying groups, so we hope to do even better in 2005.”