NFA president looks to the future Article Number : 6493

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Date	3/28/2011 8:47:08 AM
Written By	LGM & Associates Technical Flooring Services
View this article at:	//floorbiz.com/BizResources/NPViewArticle.asp?ArticleID=6493
Abstract	NFA president looks to the future Jim Mudd, president and owner of Sam Kinnaird’s Flooring Outlet, Louisville, Ky., has done more than see the National Floorcovering Alliance (NFA) go from a loosely knit band of market-leading retailers earning rebates to a tightly bound, cohesive group of...
Article	NFA president looks to the future Jim Mudd, president and owner of Sam Kinnaird’s Flooring Outlet, Louisville, Ky., has done more than see the National Floorcovering Alliance (NFA) go from a loosely knit band of market-leading retailers earning rebates to a tightly bound, cohesive group of dealers undertaking industry-changing programs; he has played an active part in the transformation. Kinnaird’s first joined the organization in 1994 and Mudd has been attending meetings ever since. Now, as NFA’s sixth president, he is in a position to take this transformation to the next level as the group celebrates its 20th anniversary. Floor Covering News’ senior executive editor Matthew Spieler sat down with Mudd to discuss where the group is going as it embarks on its next 20 years and what he would like to see happen during his presidency. What is the state of NFA? Currently, we have 38 members who do over $1 billion in sales a year at retail from 255 storefronts. Financially, we are doing fine. I don’t get paid and neither do any of the board members or committee chairs. We have one paid employee, Lisa Browning, our executive director, and that is it. Plus, 100% of the rebates go back to the members. Is the group seeking to add more members? We are always open to new members. It is no different than our customers. We have to always go out and get new customers because you will always lose some for whatever reason. The current economy is one of those reasons. I think we can handle up to about 50 members with our current format for meetings, but after that it may get challenging. What about suppliers/vendors? Where do you feel you need more or different ones? I think it is the same as with new members. You will always lose some for whatever reason. Wilsonart is a good example. It had been a core vendor from the beginning. There is a difference with core vendors, however. We really can’t handle any more than the current total due to our meeting structure. One would have to leave to add a new company. NFA is 20 years old. What do you feel it has achieved during this time? We started out with eight very large members who had a specific goal in mind: rebates. While that is still a big part of our group, we are not going to focus strictly on rebates. We now focus on special purchases, a promotional calendar and special products or extended color lines. What message would like you to convey to the rest of the industry about NFA? That we are not a buying group. There are very few things in common with us and other groups. For example, 100% of the rebates go back to the members. How has the recession affected the group? For instance, have any members fallen below the $10 million threshold? The recession has affected us like everyone else. We have lost a couple of members because of it. There are some who have fallen below the threshold but are on their way back up. We are re-writing the by-laws just for this situation. We want to give members a time frame to get their numbers up because the economy is out of their control. As NFA president, what are your top goals for the coming year? My No. 1 goal is to get the by-laws rewritten so we don’t have to worry about this kind of situation again. It has been uncomfortable for everyone as our group is more fraternal than anything. My second goal is to push our vendors to get on board with NFA. The ones that have done so have a very large chunk of our business. It needs to be spread out a little more. Beyond your main priorities, what are some of your other goals? To continue to promote the committee structure in our group. When Sam Roberts became president, he started the committee structure to address the vendors. They were empowered to work on behalf of the group. Jeff Macco, who followed Roberts as president, continued that lead and I will follow his. If anything, I will push it further because they are the voice of NFA, not Jim Mudd. How has the direct selling relationship with Armstrong been working out for the group? I think it has definitely been a hit. It is the best of both worlds with my company. When you need the distributor, he is there. When you need a very large quantity for a large job, then Armstrong is there. They both have their strengths. Right now we are working on a private-label wood program with the company. Almost 100% of the membership is interested in doing it. Do you foresee similar programs with other first- or second-tier manufacturers? I definitely see it as a wave of the future. You used to buy all your carpet through distribution and now you buy most of it direct. Again, there is a place for distribution especially if you don’t have representation around the country. Do you see NFA forming an alliance in the way Shaw and CCA Global did in creating a proprietary fiber (Tigressa)? If not a fiber, then maybe something else? I really don’t see that as something we would be interested in doing as a group. Something about “biting the hand that feeds you.” I think we are more interested in private labeling. NFA has always been a group, but it seems in the last few years it has really taken on a “true” group mentality as opposed to the “fun club” it was for many years. To what would you attribute this change and why? Again, I don’t see us as a buying group. I admit it looks like that with the ever-successful Stainmaster roll buys we have had the last three years. When you add the cut portion to that program and it represents close to $10 million at cost of the programmed products for the year, people take notice. That was done for a reason. We wanted to show the industry we could swing a big stick if we wanted to because the industry did look at us as a “fun club” that couldn’t or wouldn’t do anything together. NFA members are generally a sophisticated bunch. Even so, do you envision NFA starting to do things like other buying groups in terms of coordinated sales, advertising programs and so on? No. Most of our members are really too sophisticated to need this type of help. If they really needed some help, they would ask a fellow member. Do you think NFA will move to create a name for itself at the consumer level? Or are the members too big and well known to add another layer? No, again, they have gotten so big because of their name. They don’t need another layer. What about training? From installation to selling, do you think NFA will do anything like this at the group level? I think any of us could use this type of training. I think if the right situation came along, we would entertain it although the largest members already have sophisticated programs in place. Let’s talk about NFA’s one paid employee, Lisa Browning. A few years ago NFA hired her as its executive director. How has that worked out? What prompted the move after so many years of not having a paid employee? The best thing that has happened to NFA was hiring Lisa as our executive director. Her hiring has taken us to a new level. I was on the board when we discussed this and we all knew we desperately needed to do this. It was such a big step for us but we knew we needed the continuity of a paid director. Since we were all volunteers, the majority of the business of NFA was concentrated in the month before our three meetings each year. When the meeting was over, we went back to work 100% of the time on our own businesses. As a result, the work of NFA was put on the back burner. With Lisa, NFA is a year-round business. Do you foresee NFA adding more hired staff (such as a purchasing manager)? No, I don’t see that as part of the equation. I can see us hiring a consultant from time to time. Where do you see the group in five years? I see us growing to 50 members. I see our membership stronger than ever after having survived the great recession.