Ralph Boe

In the spring of 2001, Ralph Boe joined Beaulieu of America. The industry veteran was named president of the company’s residential division and was immediately charged with reducing costs through greater efficiencies and scaling back/selling some of its operations, such as rugs and fiber production.

Boe was not only successful, his efforts allowed Beaulieu to once again stand proud as the industry’s largest privately held carpet company with more than $1.1 billion in annual sales.

Today, the mill is firmly focused on servicing the specialty retailer with products developed from direct consumer input and programs designed to increase sales and profitability.

For 2007, Beaulieu will once again be the largest carpet company exhibiting at Surfaces, a distinction it has held for the past three years. As final preparations were being made, FCNews’ Al Wahnon, editor and publisher, and Matthew Spieler, senior executive editor, caught up with Boe for an exclusive interview about the state of the company and what the industry can expect to see from it in the coming year.

Give us your overall state of Beaulieu; how did the company do in 2006?

The company performed reasonably well in a difficult market. Commercial sales were up for the year, while residential sales dropped a bit as the housing market cooled and retail traffic was erratic. Profits were close to budget and ahead of 2005.

What were your two best selling products in 2006 and why do you believe they were so popular?

It’s difficult to cite just two products, as commodity items always play big parts in the line. Rather, product groupings such as Coronet Classics (unbranded value products), Carefree Living (polyester BCF) and Stainmaster Luxury Collections all did well. The first two represent real value to the dealer and to the consumer, while the third sells based on brand recognition in the marketplace.

Beaulieu is once again going to be the largest carpet company exhibiting at Surfaces. How do you feel about your competition not being there?

Surfaces has been an excellent venue for Beaulieu, giving us an opportunity to display our product lines properly to our customers and sales force, and spend some quality time with our customers. Our competitors have reasons for not being there, and seem to have selected paths that apparently serve them well. Their lack of attendance certainly has not dampened retailer participation in Surfaces.

How important is Surfaces to Beaulieu and what affect does the market have on the company over the course of the year?

Surfaces is a very important part of our strategy each year. The show is well attended and it offers us a great venue to showcase our new introductions and meet with a lot of customers within a three-day time span. The show does have a big impact on our year in that we are able to launch our new programs and get them off to a great start, setting the tone for the rest of the year. We see it as time and money well spent.

Last year at this time you not only unveiled the results of a major consumer research study Beaulieu undertook but how your new products were created based on those results. What about this year’s introductions? Where did their inspiration come from?

This year’s collections were inspired by the very successful sales of the predecessor products. We felt there was a real void in the marketplace for well-styled, better-end yet value-priced products that represented a recognizable value. It was time to introduce a whole series of soft products using our own fibers to bring soft values to the consumer while the Stainmaster [products] compliment the lines already in the marketplace. In addition, we’ve added some exciting looks to our polyester lines. This year’s inspiration came from our own Danny Wade and his research and development team.

What are you bringing to this year’s party in Las Vegas? What can visitors to your booth expect to see?

This year at Surfaces we will be introducing one of the most aggressive product launches in our history. We will be launching several products that will refresh and strengthen some of our most successful programs we currently offer, like our filament polyester program Carefree Living, our solution-dyed nylon program Ultimate Performance, as well as our other key programs.

However, we are really excited about the launch of two new programs: Soft Classics by Coronet and the Hollytex Stainmaster Luxury Collection II. We took a two-pronged approach with these programs and we are bringing the dealers two collections that will really give them the tools they need to be successful this year. We refer to the Soft Classics collection as the “profit and selection center,” while we like to refer to the Stainmaster Luxury Collection II as the “branded selection center.”

As we developed the Soft Classics collection, we considered three people: the retailer, the retail sales associate and the consumer. We understand that retail showroom space is at a premium today, and the dealer struggles to make certain he has the right products on the floor in order to maximize return on investment, so the program had to pack a lot of punch into a small space. We also understand that the retail sales associate is quite often the person who drives the selection process, and it is important he has confidence in a merchandising system, and the value, selection and service are there. Finally, we realize the consumer is often overwhelmed by the shopping process, so we wanted to develop a true “selection center.” We accomplished our objective—the salesperson can take the consumer to this display, and on this one merchandiser she will find seven different construction types, over 450 SKUs (all at incredible values), which means great profit margin opportunities, and all in less than 15 square feet of retail space.

Next, realizing that Stainmaster is the most recognizable brand in the industry, we wanted to introduce a line of products that would appeal to the brand-conscious dealer and consumer. The Hollytex Stainmaster Luxury Collection II will be this year’s most comprehensive launch of branded Stainmaster products. When combined with our original Luxury Collection, we will offer the dealer a boutique of 40 beautifully styled products. Again, we have made certain the consumer will find what she is looking for on this merchandiser. It will have seven different construction types and over 400 SKUs. We will also have a unique feature in which we will be highlighting our LuxuryBac premium backing system by showing a reversed-out sample next to a traditional-backed sample, encouraging the consumer to compare the two. We will be selling the luxurious aspects of these products from the face fiber all the way through to the backing.

Will you have any special promotions and giveaways during the market?

Yes, we will be offering special pricing on roll goods as well as our various sample packages. We will also have some fantastic prizes to give away this year, including a large screen plasma television. We will have several drawings each day of the show.

How is Beaulieu’s Retail Partner Program (RPP) doing?

The program is doing great. There are almost 1,600 members spread all over the U.S. Membership locations would closely mirror the population distribution of the country—more members in the larger population centers. The East Coast would comprise the largest number of members.

The typical member is, of course, an independent retailer with a deep commitment to be successful in his marketplace. These members have a loyalty to Beaulieu and good relationships with their Beaulieu territory manager.

What new benefits/initiatives were added to the RPP in the last year to enhance the program?

Each year we develop a new advertising package to enable the members to personalize their message to the consumers in their area. We also added a new private label credit program from GE Money to help our members increase their average sales ticket and compete on a level playing field with retailers in other categories.

Although not specifically for RPP members, we also introduced a debit card program for retail salespeople last year to reward them for promoting our products to their customers. Beaulieu Rewards has been very successful and will be continued in 2007. The products featured on the Beaulieu Rewards promotion are changed quarterly.

We will continue to offer enhancements to the program in the coming year and look forward to some great things.

Besides carpet from Beaulieu, are other products, services offered to an RPP member? What are they and how does a dealer get access to them?

Members can take advantage of many services from Beaulieu. New members get a package of materials with many different options. Our territory managers are in daily contact with the members to make sure they are aware of and take advantage of our offers.

Program inclusions (other than listed above) are: Performance award program based on purchases, rebates on purchases, available life insurance, 401k program, rebates from aligned vendors, proprietary labeling, and a 30-day no-questions-warranty.

In the last year or so both Shaw and Mohawk have made a number of major moves—buying Honeywell, SI, Unilin/ Quick-Step, Wayn-Tex, etc. How have they affected the way Beaulieu does business, or did they?

The competitive acquisitions of backing companies took away an edge Beaulieu enjoyed for some time. The Honeywell purchase puts pressure on Shaw to fill that capacity, particularly in staple nylon. We feel polyester continues to be the greater value in spuns versus nylon. The Unilin acquisition has not altered our approach to carpet in the marketplace.

How much help has it been to no longer be in the rug business?

The rug business had been good for Beaulieu, and it’s where the company began. It was an excellent asset sale at the time and did not affect our business in broadloom when it occurred. Not being in that business keeps our focus clearly on carpet.

Can Beaulieu continue to survive and be profitable just offering carpet?

Carpet is still the single largest sector in flooring. We do not believe our business required us to be in hard surface. There could be alliances in the future if hard surface became a necessity with certain dealers.

What’s your outlook for 2007?

We continue to be optimistic about business despite the slow housing market. We expect the first half to be difficult but look for recovery in the second half of the year. Stay tuned!