Kennesaw, Ga.— CarpetsPlus of America, a rapidly growing franchise, has purchased the Color Tile name from Jim Gould, delivering on a promise to its members that they will soon have a core hard surface system available. The asset purchase was reported to Color Tile members on April 25 at the group’s convention in St. Louis. It was an all-cash deal, the amount of which was not disclosed. Ron Dunn, CarpetsPlus’ co-president and CEO, pointed out the significance of the Color Tile name in the marketplace: “The Color Tile Web site gets 250,000 hits a month. Consumers know and trust the name.”

Dunn explained that plans call for the 92 Color Tile stores in the group to have the option to include a carpet department in their stores, and the 307 CarpetsPlus members will have access to a Color Tile store-in-store setup with a full range of hard surface products: ceramic, porcelain, wood, laminate, resilient and others, as well as accessories. Half of existing hard surface departments, about 300 square feet, will be devoted to the new format.

Dunn said the deal should be completed within 30 days, probably by the end of May. He stated that “we expect to retain key people in the St. Louis operation and plan to move the company to our headquarters in Kennesaw by June 1.” CarpetsPlus, founded only five years ago, is enjoying record growth; it has acquired 39 new members since Surfaces 2002. Industry observers expect the franchisor to accomplish the Color Tile transition in a smooth and orderly fashion, “with the same professionalism that marked the Carpetland purchase in October of 2000.” It retained 26 of the 26 members, and has increased its ranks to 35.

Addressing the transition, Dunn said that between the 307 CarpetsPlus stores and the 92 Color Tile outlets, “there are less than 10 conflicts, and we can work them out. “Our suppliers are happy about this move,” added Dunn. “They not only have added volume but they are amenable to supplying products under the Color Tile brand.” He listed his company’s rationale for the Color Tile purchase: “We are fulfilling our commitment to solidify our support of our members to give them a strong hard surface program that will drive traffic into their stores. We are generating more business for our suppliers, most of whom are already producing hard surface products and will move more product with our private label programs.

And, it will help increase our membership with our Color Tile agenda, which allows us to offer a complete and professional hard surface business.” Gould purchased the Color Tile name and trademark in September 1997, after the retail operation had filed a Chapter 11 in January 1996, from which it could not emerge. Gould, who is chairman of Misco Shawnee, a Missouri-based distributor, made the purchase personally and did not involve Misco. At the time, Color Tile had 60 franchisees who agreed to continue as licensees and, in the nearly five years he owned the business, he increased the membership to 92.

On Aug. 1, 1995, Color Tile was the industry’s largest retailer with 850 units—195 owned and 655 franchised—and annual sales of approximately $700 million. Eventually, the 195 owned units were closed. Color Tile was founded in 1953 in Joliet, Ill., and was acquired by Tandy Corp., the corporate giant. In 1975, it was spun off as part of Tandycrafts. Four years later it became a separate company and was taken over by Investcorp. In 1996, the parent company filed for the court’s protection in bankruptcy for Color Tile and nine months later Gould’s acquisition was approved by the courts.