Article Number : 4911 |
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| Date | 9/30/2009 9:27:22 AM |
| Written By | LGM & Associates Technical Flooring Services |
| View this article at: | //floorbiz.com/BizResources/NPViewArticle.asp?ArticleID=4911 |
| Abstract | By Ken Ryan No longer the fair-haired boy of flooring surfaces, sales of laminate have fallen two straight years and distributors say the category faces challenges even as the economy improves. Although there are signs in some camps that laminate may be... |
| Article | By Ken Ryan No longer the fair-haired boy of flooring surfaces, sales of laminate have fallen two straight years and distributors say the category faces challenges even as the economy improves. Although there are signs in some camps that laminate may be making a comeback, the overall picture since last year is rather grim. Floor Covering News’ survey of flooring distributors found that laminate sales in 2008 were down on average 15% to 20% with estimates for 2009 showing a continued decline of around 10%. “I keep thinking I see some signs of a [laminate] recovery but every time I think that, it hits a wall again,” said Charlie Cobb, vice president of marketing at Adleta. “The laminate category takes two steps forward and one step back. We’re holding our own but it is not the robust business we have seen.” A combination of factors has hurt the laminate category, wholesalers say. 1. Laminate is primarily a retail-only product. “It is not diversified like the others; there is very little commercial or builder application, and so it is not insulated from the fickleness of consumers,” said Jeff Striegel, CEO of Elias-Wilf, which saw laminate sales drop 17% in 2008. 2. Engineered wood, with its price dropping 20% to 30%, is encroaching on laminate territory. 3. Advancements in LVT have made the resilient product a much more viable alternative, further eroding laminate’s position in the market. “LVT is the cool, hot thing,” Striegel said. “While laminate has had two down years, LVT has been enhanced by grouting, Lock-NGo, simplified installation and other improvements.” 4. Consumers can purchase laminate anywhere, according to Terry Gray, vice president of marketing at NRF. “Consumers have so many alternatives, it’s not just the Internet,” she said. “[Consumers] pick it up at Sam’s Club and think it is a deal. Then they bring it home and ask, ‘Where’s the trim?’ ‘Where’s the cushion?’ ‘It doesn’t sound right.’ Or they think their brother’s sister’s cousin can install it.” Gray said distributors can counter this trend with superior service to their retail customers. “We have to help them advertise and they have to push installations. Professional installation is the key.” While the majority of flooring distributors have witnessed little to no momentum in laminate this year, Striegel has seen an uptick in the last 90 to 120 days. He said through the first quarter, laminate for Elias Wilf was down 20%, off 2008’s 17% drop. But based on current projections, he expects laminate to finish down in the low single digits by year’s end. He credits suppliers Mannington and Quick•Step for “getting more aggressive with pricing” and creating a newness withvisuals and aesthetics. David Sheehan, director of laminate and resilient for Mannington, said the company’s focus on high-end looks is paying off. Mannington’s Diamond Bay Collection includes a finish that “not only allows us to achieve better clarity and richer colors, its scratch resistance is comparable, if not better than, our classic finishes found on Revolution Plank designs.” Other distributors agree that selling up is crucial to stimulating interest in laminate. “When you get to the higher-end looks, that is where everyone can be more profitable,” NRF’s Gray said. “Upgrading consumers is easier than ever. We’re putting our eggs in that basket.” Hoy Lanning, CEO of CMH Space Flooring Products, said because pricing pressure in the base grade negatively impacted his business, “We are promoting upgrade products to build our business back.” Focusing on the high-end has worked wonders for Cain & Bultman’s laminate business, which has defied current market conditions by posting a 30.6% increase in 2008 vs. 2007. Laminate is down 6% in ’09. “We have been able to grow the category pretty good,” said Buddy Faircloth, executive vice president, Armstrong, at Cain & Bultman, which serves south Georgia and all of Florida with the exception of the Panhandle. “We have more displays out in the marketplace, more feet on the street. It’s all tied to higher-end business with the Armstrong and Bruce laminate lines. We’re going to continue to attack that high-end market. It has worked well for us.” |