Article Number : 4498 |
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| Date | 5/21/2009 9:29:28 AM |
| Written By | LGM & Associates Technical Flooring Services |
| View this article at: | //floorbiz.com/BizResources/NPViewArticle.asp?ArticleID=4498 |
| Abstract | Leading laminate manufacturers may reign supreme when it comes to mimicking nature, but nearing quarter two of another tough year has them taking a realistic approach to a hopeful recession rebound. Reporting sales off by about... |
| Article | Leading laminate manufacturers may reign supreme when it comes to mimicking nature, but nearing quarter two of another tough year has them taking a realistic approach to a hopeful recession rebound. Reporting sales off by about 15% to 20% and units between 12% and 15%, category heads say 2009 remains grim— though in comparison to other industry segments, not terrible. “Laminate sales at retail were definitely down by an average estimate range topping 15%,” said Bill Dearing, president of the North American Laminate Flooring Association (NALFA). “The good news is in a bleak overall market, laminate appears to have increased market share slightly.” And it’s this reality that has industry leaders aggressively vying for floor space, as a mix of big pluses—laminate’s inherent value, performance, price, styling, green story, installation, etc.—and minuses—depressed economy, credit crunch, fall of remodel segment, new competition, etc.—push and pull the category forward. Aligned with remodeling, of course laminate has been slowed in recent months by the dwindling economy, scarce credit, drop in consumer confidence and decrease in retail traffic, experts explained. However, they noted the segment’s inherent value, brand awareness and increased innovation continue providing that much- needed push to succeed in the trenches. “The challenging economic times that began in ’08 have started to winnow out the weaker players in the market,” said Roger Farabee, senior vice president of marketing for several Mohawk brands, who noted this fact as an advantage to those still in the game. And getting more specific to the category, he explained though fewer consumers exist, today’s remodelers are looking for value, “which laminate offers at all price points, especially in comparison to other segments. It is appealing to shoppers who realize it can let them buy more style than they thought possible.” Similarly, Ken Peden, COO of Kronotex/Formica, suggested retailers should educate themselves on their laminate offerings and sell value over price. George Kelley, CEO of Pergo North America, said aside from value, strong brand names [such as Pergo] also help contribute to the popularity of laminate flooring, specifically in the down market. And Gary Finseth, director of marketing for Tarkett Residential, said category sales continue to be driven by performance. “While design is a strong consideration, it is never purchased at the expense of performance, which remains the consumer’s number one criteria.” Also naming performance a lead laminate player today, Kim Holm, president of residential business for Mannington Mills, named technology as the influential force behind laminate sales. “The fact that consumers can get the looks of wood or slate with the performance of laminate is unmatched with its exceptional scratch and wear resistance, making it an excellent long-term value.” Although performance holds top of mind in laminate, when it comes to best supporting role, style is second to none. And though both hardwood and tile looks remain available, the popularity of wood options continue as frontrunners. “Wood species remain the dominant design in laminate flooring with handscraped/rustic keeping hot,” Dearing said. In agreement, Eric Erickson, laminate category manager for Shaw, said wood visuals continue to outpace the tile looks because of tile’s regional appeal. He noted along with handscraped looks staying strong, the high-gloss segment shows continued success—specifically in exotic looks and darker colors. However, regardless of wood or stone, high-gloss or rustic, Milton Goodwin, Armstrong’s general manager of laminate, reminded dealers that the importance of laminate styling is to “strive to get imitation products as close as possible to their natural counterparts.” He noted though the majority of investment in this is still being given to wood—as that’s where the demand and popularity lie— improvements are being made to its tile counterparts. On that front, Mannington’s Holm said a growing trend in tile is toward both modular and larger-format looks. Pergo’s Kelley expanded, noting the popularity of larger tile slabs with narrow, refined grout. So with style, performance and inherent value keeping future thoughts lit, what does the category have to look forward to in the coming half of 2009, and what hurdles may be met along the way? Experts said green accolades, Lacey compliance, commercial opportunities and expanded mid-priced offerings look promising in the coming months. However, laminate’s No. 1 competitor—other categories— and the economy remain tough opponents in the battle for market share. Although laminate products offer green, Lacey-compliant wood looks—both in exotics and domestics—which may take share from the hardwood segment, two deterrents remain, Goodwin warned: “It’s fake, and occasionally floating applications leave a hollow sound.” However, he said that’s why the category continues to invest and make strides to take these factors to task. Another facet pushing innovation in the second half of the year is the recent advancement of luxury vinyl tile (LVT), making it a better option than in prior years and a direct competitor for laminate. “Floating LVT has expanded customer base and made it an accessible DIY product, which has challenged laminate to continue to drive new technologies and innovative looks currently unavailable in LVT,” Erickson explained. He also agreed laminate’s great environmental story—low waste factors, long life cycle, high recycled content and glueless installation—gives laminate a huge advantage over the hardwood segment. “The Lacey Act is going to continue to impact the exotic wood arena reducing the volume of products available, while driving up price,” he suggested. “We, however, can keep bringing wood visuals— exotic or not—at a much lower price with added advantages.” Furthermore, laminate, which typically has been a residential remodel product, is one of few categories looking to readily expand into commercial, mills said. “Laminate has significant potential for growth in the commercial market— specifically Main Street commercial,” Farabee explained. And Dearing noted expansion due to a strengthening in the middle market area as a bright spot. “This segment has been challenged for some time, but as designs and features improve, they find their way eventually into the mid level.” Overall though, laminate is facing the same issues as all other flooring categories: not enough customers, Farabee explained. But, regardless of the economic hardships and continued decline in business, laminate leaders remain perched in anticipation of significant pent up demand for their products when recovery accelerates, Kelley noted, with those who emerge from the wreckage stronger and more efficient. |