Charlotte, N.C.—About 75 dealers, distributors and mill reps gathered at the Marriott hotel here to learn more about the formation of a new association and to hear industry speakers discuss a number of common issues. Spearheaded by David Swaney of Charlotte Flooring, the meeting attracted independent retailers from both North and South Carolina, along with a number of distributors and manufacturer representatives. Beyond forming a new organization, the focus of much discussion was on competition, rebates and the Internet.

“The intention of this meeting is to get to know one another and to discuss common problems facing our industry—locally and nationally,” said Swaney during his opening remarks. “This meeting is not intended as a character assassination of any particular manufacturer, but to look at the problems in the way some conduct their businesses that pertains to me—and to all of you as well. We’re not here to sling mud. We’re here in the best interest of the independent floor covering dealer.”

Ralph Boe, president and COO of Beaulieu of America, provided a recent history of the company and then touched on the issue of competition in his presentation to the group. “When you have the Home Depots and the Lowe’s continuing to grow,” he said, “they look at the carpet sector as being a big piece of business and they want it. But what you offer is service—personal service. If you want to maintain a marketplace that breeds competitiveness, you need to support each other.”

Added Pete Ciganovich, Beaulieu’s executive vice president of sales and marketing, “We thought about doing what our competitors are doing by going directly to the builders with prices, but we decided we would be stripping you, the independent dealer, of opportunities. We don’t have a builder program because our builder program is based with independent flooring businesses.”

John G. Newitt, an attorney specializing in unfair trade practices and trade regulations, explained to the group that for manufacturers to go directly to builders and ask them to specify product in exchange for a rebate is not legal. “It is a process known as ‘tying.’ And it violates three different federal statutes because our government believes in fair competition.” He encouraged those present to seriously consider forming an association and filing complaints with the Federal Trade Commission (FTC) about the practice of tying. “It’s the only way you’ll survive.”

Other challenges to the flooring industry, as pointed out by Hoy Lanning Jr., general manager and COO of CMH Flooring Products, are the shrinking margins and the rising insurance costs. “As distributors, we have to change. A value added service years ago used to be an 800 number. That’s not so special now. Today, we have to help with financing, running a business, computer access and electronic data information. We’re not just selling rolls of carpet. We’re sales consultants. It’s all about servicing the customer.”

Swaney expressed that rising insurance costs is one reason an association would be beneficial. “My group insurance rate went up 50%. As an association, perhaps we can get better rates on insurance.” Almost all in attendance raised their hands when asked who would be interested in starting a flooring association to represent the two states. Said Russ Barringer III, president and CEO of Dealers Supply, and also a speaker at the meeting, “The formation of a strong floor covering association is very important. The issue of how some products are taken to the marketplace and other issues that arise can be addressed by the success of the independent flooring businesses in the Carolinas.”

Added Swaney, “We need representation and we need to think outside of the box and look down the road or we’ll be caught asleep. I’m excited about what we can do as a group—to share ideas and do things that can improve our industry. We’ve made headway just being here together.” Following the meeting Swaney told FCNews, “In that room were most of the major players in the states of North and South Carolina. If there weren’t concerns, then those people wouldn’t have come. Independent flooring dealers want to have a say, and they want to run a business of integrity.”

Volunteers at the meeting agreed to meet at a later date and discuss the formation of an association. Swaney noted while the initial name of the organization was to be the Metroliner Flooring Association, it will most likely be called the National Independent Flooring Dealers Association, “due to requests from from several areas of the country that wish to participate by membership.” A steering committee will meet again in 30 to 60 days and is encouraging those interested to call Swaney at 704/377-8814 to learn more.