By Louis Iannaco
As 2007 comes to a close, the hardwood category, like most others, was hit hard by tough economic times. While executives may be hoping for the best-case scenario, a 180-degree turnaround, most aren’t expecting it, at least not during the first half of 2008. The following are thoughts from a few of the industry’s segment leaders.

Describe what you see in 2008 economically and product wise in the category.
 
Piet Dossche
CEO of USFloors/Natural Cork
Business conditions in 2008 will continue to be challenging at best, with the economy further absorbing the fall-out from a declining housing market and the sub-prime mortgage crisis. Consumer confidence and consequently spending mode will stay under pressure from a continuous erosion in house prices, more expensive mortgages, tighter credit and high energy costs.

The effects from several rate cuts by the Fed during the early part of the year and the run-up to the election will generate some spark in the second half of 2008. Demand for commodity wood flooring for the builder market will stay soft, but stronger remodeling activity will increase sales for unique, better products, offering higher values to the consumer.

Don Finkell
President and CEO of Anderson Hardwood Floors
Business will continue to be tough next year, and we will see more consolidation of the wood category. Anderson is fortunate to have really solid partners to help get through this period of difficulty. Marginal suppliers and marginal customers are a real liability in this environment. Worse than slow sales is getting stuck with an unresolved claim or a bad debt to write off.

I think green products will buck the downward sales trend. Consumers are becoming more aware of environmental issues everyday, and it is finally translating into the choices they make. Wood is a renewable resource so I think it bodes well for the domestic wood sector. High end, remodel products will do better than builder dependent low end products.

Pierre Thabet
President of Boa-Franc/Mirage
Next year will be another very challenging year, and we don’t see any pick-up in new-home construction. The credit crisis is not over and other casualties will emerge. Remodeling will be subject to the consumer’s ability to spend. Adversity brings also opportunities, and Mirage is well positioned in these areas to capture them.

As for products, the trend continues toward wider widths and different looks.

How does/will your company position itself in order to respond to what it sees happening in 2008? 
 
Dossche:
Despite these challenging conditions, USFloors is very bullish and optimistic in its outlook for next year. Under our Natural Cork and More brand, we are aggressively expanding our offering of unique, environmentally responsible flooring products, in response to the growing awareness and demand for green flooring solutions by the American consumer.

We are just at the beginning of an eco-conscious wave which will engulf our communities and exponentially pick up strength as younger, greener generations will become our customers of the future.

With our extensive offering in bamboo and cork flooring and with a new introduction at Surfaces of a linoleum and certified wood collection, we will be strongly positioned, as well as our retail partners, to take full advantage of this green wave.

As I heard one fortune 500 CEO quoting recently: “A downturn is a terrible opportunity to waste.” I couldn’t agree with him more and USFloors/Natural Cork will fully embrace the opportunity in 2008.

Finkell:
Anderson will continue to work on the fundamentals of good quality, innovative products and good service. We will also spend our money wisely but still invest for the future.

We have a new green technology, PermaColor, we will be introducing at Surfaces which will be an attractive domestic alternative to imported exotics. The color goes all the way through the wood so it is permanent and will not scratch or wear off. Our Olde Paint, hand-painted and aged floor collection, continues to grow and do well in the market. Retailers need to stand out with unique offerings to capture the imagination of the consumer. Otherwise, you’re just talking about price points.

Thabet:
As for us, we are confident we will continue to grow for the following reasons: new distributor partners, new products, new programs and branding. We have a strong brand recognized for its quality, and we intend to keep the pace. Our three product lines—Classic, Engineered and Lock—are well suited for different applications and different market segments. This is why we believe that 2008 will be a growth year for Mirage.