By FCNews staff
As 2009 comes to a close, it will mark the third year in a row that most people would like to forget when it comes to how business was. Some even say it has been the toughest of the three as conditions started to decline dramatically in both the residential and commercial sectors as the year wore on. While most businesses planned for another difficult period, many are admitting 2009 was far tougher than expected.

Though the overall economy is expected to have declined about 2.4% in 2009, the flooring industry fared much worse, with estimates between 10% and 20%. Even so, a number of leading companies say their losses were not as bad as the overall market, giving them encouragement that their strategies for fighting the recession are working.

Moving into 2010, there are some positive signs the country, and world for that matter, is coming out of the worst economic downturn since World War II, but the signals are mixed and how they play out remain uncertain.

Based on some of the more recent high profile surveys/projections— the National Association for Business Economists, the Manufacturers Alliance/MAPI Quarterly Economic Forecast and the Blue Chip Economic Indicators newsletter which polled 52 leading economists—the overall business climate in 2010 should see some light, growing between 2.4% and 2.9%, with most of the actual growth taking place in the second half of the year.

With this in mind, FCNews surveyed some of the industry’s leading mills to get their take on 2009, as well as gaze into their crystal balls and share what they expect for 2010.

Rate how 2009 has been with regard to the expectations you had coming into the year.

Ralph Boe President and CEO of Beaulieu of America

We expected it would be a difficult year and we budgeted for business to be down—most in the industry probably did—as a result of the housing market being as devastated as it had been in the prior year and expecting that was going to continue into 2009. As it turned out, clearly industry sales in dollars and units were down more than expected, probably down twice what was expected, and I’d say that was the case for us as well. When you see new housing down 70% from its peak, existing home sales down 40% from its peak—that had to have some major affect on the off-take of flooring.

The consumer is just having a lack of confidence and what was going on with policies and not knowing what to expect in terms of taxation. She is saving a little more, which is probably a good thing, being prepared for uncertainties.

Piet Dossche President and CEO of USFloors

We knew 2009 was going to be a tough year, with the housing market and new construction slowing down rapidly during 2008, accentuated by the financial meltdown in the fourth quarter. But we are pleased overall with the results achieved in a year that has proven to be even more challenging from economic activity than we had initially anticipated.

We successfully started our manufacturing plant in Dalton, launched several successful programs and strengthened our position in the market as the leader in sustainable flooring.

Gary Finseth Marketing director for Tarkett residential

Going into 2009, we knew it was going to be a tough market. We knew that fewer consumers would be shopping for flooring in general.

We have seen an increased consumer interest in the resilient sheet category—especially in the fiber-backed vinyl segment and luxury vinyl tile (LVT). Both segments are growing and gaining share within the resilient category.

George Kelley President and CEO of Pergo

While the retail business environment remains very tough, 2009 has been a very successful year for Pergo. Sales growth significantly outpaced the market, and we are conservatively optimistic about 2010.

In addition, we successfully launched the Pergo Commercial line. Consumer demand for Pergo remains strong and our recent decision to consolidate all worldwide flooring activities under Pergo AG will make us increasingly more competitive in the marketplace as we move forward.

Lori Kirk-Rolley Senior director of marketing for Dal-Tile

In 2009, we estimate the tile industry is down about 25% compared to 2008. This was driven by the large decline in housing starts compared to 2008, as well as the dramatic slowdown in commercial, with old projects being put on hold, new ones not being started and general lack of financing. We entered this year expecting a continued downturn, but the commercial market in particular has performed worse than we expected.

Bob Leahy Senior vice president hard surfaces for Mohawk Industries

The market was softer than expected in both retail replacement and builder. Vinyl volume year-over-year led hard surface performance due in great part to its price/value relationship. We witnessed considerable price deflation in hardwood due to idled capacity and the continued slump in new housing.

Jonathan McIntosh President and CEO of SnapStone

As an emerging flooring category— glueless tile—our sales increased year-over-year as we expanded our footprint and launched the Avaire brand into specialty flooring stores. We had expected sales to increase even more than we experienced, but the reality of the current economic climate across all market segments did impact us.

Randy Merritt President of Shaw Industries

This will perhaps go on record as the most challenging period in the history of the flooring business. Certainly, when you factor in 2007 and 2008, that will be true.

Coming in to 2009 we had expected it to be a tough year— perhaps as bad as 2008—no one on our team (or any other that we know of) predicted the kind of decline the industry actually experienced in this year. Not only did units decline but as the year progressed it became more obvious those consumers who were buying were shopping for value, and that the overall mix was declining. Again this seemed true for most of the flooring segments.

In the second half of ’09 we have seen raw material costs rise significantly and see little relief on the horizon.

Frank Ready CEO of Armstrong’s North American Floor Products

Armstrong planned for continued decline in the residential markets as well as deterioration in commercial, but actual market conditions were worse than expected.

Within the context of market conditions, Armstrong feels good about 2009. In every category, we feel like we outperformed the market. While there was pressure on mix, we were able to offset with new product introductions such as Alterna, Handscraped Hardwood and Luxe Floating Plank.

Despite the difficult environment, we continue to do the things that help our retailers succeed: continue our investment to ensure consumers know and understand the value of the Armstrong brand; investing in print, broadcast and Web to make Armstrong dealers the premiere destination, and introducing products to ensure our retailers have a competitive advantage by virtue of having the best product offering.

Luc Robitaille Vice president of marketing for Boa-Franc/Mirage

Sales have been in line with our expectations for the year, even though the overall wood floor industry has been negatively affected by the difficult economy, more than most other flooring categories. Our estimation for the category as a whole should be a decrease of about 18% for 2009.

There was certainly a move to lower priced products. We have seen movement toward the extremes—lower priced or high end. The middle seems to have dropped off the face of the Earth.

What do you see for 2010— on the economic/business side and with regard to products/trends?

Boe

Certainly, if you listen to most economists, there is not a great expectation of a turnaround in 2010, and if it does happen it is probably going to be a slow recovery mainly because the situation with the banks has everyone in a state of flux. There may be money to loan, but the banks don’t seem to have an appetite to loan it out at these low interest rates. So they are making it much more difficult to get loans, whether it be for housing, or in the case of industry, the interest rates on corporate loans are quite a bit higher than what we have experienced in prior years.

There is not a big desire to refinance your business unless you have to, which can slow down some of the capital investments and potentially slow the recovery. Not being able to get mortgages for the individual and higher rates on borrowing for industry slowdown capital expenditures. Those two things will bode for a slower recovery.

In regard to trends, the pressure on the pricing of houses today will continue to promote more of the use of carpet and vinyl over some of the other hard surfaces. Those materials are less expensive than wood and ceramic on an installed basis. People will tend to use more soft flooring and vinyl to keep expenses down on redecorating or in completing new homes. They are going to be much more budget-conscious. That could help carpet a bit versus the hard surface.

When you look at other trends in carpet, I think the major one continues to be softer and softer products. From that standpoint, business will continue to build on both nylon and polyester BCF—the growth fibers going forward.

Ed Duncan Senior vice president of residential marketing, for Mannington Mills

We see the bottom stabilizing now—but don’t predict robust growth until 2011. We think 2010 will still be challenging, but are optimistic that we’ll begin to see some growth toward the second half of the year. We anticipate a slow climb, not a meteoric rise, so the environment overall will still not be easy.

Dossche

It will continue to present a challenging environment for the flooring business, as a couple of key numbers don’t bode for immediate strong demand: 25% of all mortgages are under water with 17% in some form of distress or delinquency of which 4% are in foreclosure and rising.

The “wealth factor” we once enjoyed, with plenty of equity in our main residence has turned into a “feeling poor” factor and doesn’t entice us to go spend. Unemployment stands at over 10%—really closer to 17% if you count the people who have given up looking for a job and those working part-time. Personal savings rate is up considerably, which is good in the long run, but takes the fuel out of consumer spending in the short tem. And then there’s government spending, for which at some stage we will be presented the bill in higher taxes, bigger healthcare, more debt, etc.

Nothing exciting for the coming year, but there again, if we know this is going to be the picture, we can prepare accordingly. The trend toward more economically priced products and real values is going to continue and those dealers willing to stock the value products presented to them by the mills, will continue to see their market share rise.

Environmentally friendly and sustainable flooring will further their importance and footprint in the commercial segment, with LEED certified new and renovated buildings becoming more and more the norm rather then the exception. LEED for Homes will start driving this in the residential segment as well, when new housing construction will pick up again and builders will look to differentiate themselves from their competition.

Finseth

Consumers who are shopping for flooring in this economy are looking for value. This actually opens up the entire resilient category to those consumers that may never have thought about resilient sheet flooring products before. It’s a great opportunity to educate them on vinyl options and their design, style and durability while better meeting their budgetary needs.

Kelley

We anticipate a slightly improved business and retail climate in 2010 as the housing and unemployment situations improve.

In terms of product, design and performance innovations will continue to drive growth in laminate flooring and the category will become increasingly attractive to the consumer. Improvements in design, performance and distribution will continue to grow laminate’s overall share of the North American flooring market.

Kirk-Rolley

Although housing starts are still negative compared to last year, they are starting to bottom out, and the prediction is for starts to increase, though now from a very small base. If it does materialize and if consumer confidence improves, this should result in some increase in the residential segment for the tile industry heading into 2010.

While it is difficult to predict, we expect residential sales to start to pick up by the later half of 2010, since there is a lag between home sales—new and existing—and actual tile sales.

Regarding the commercial segment, there is not much good news on the horizon. All indicators point to a continued decrease in architectural and commercial building activity, which will depress tile sales well into 2010.

As a whole, we are estimating the industry in 2010 will be down by a minimal amount compared to 2009. However, the decrease will be an average of bigger declines in the first half, followed by residential improvement in the second half.

Leahy

The first half should be somewhat consistent with the fourth quarter of 2009 adjusted for seasonality at retail, while slightly slower in the builder channel. Multi-family is expected to soften due to ongoing tight credit policies.

The second half of 2010 should deliver more volume energy in retail and builder versus 2009, although in low single-digits. Consumer confidence will play a pivotal role in supporting retail activity. Value hunting will still be top of mind for wholesale buyers and retail consumers.

Short term, vinyl will remain the value story. Vinyl plank styles may pull volume from laminate and entry-level hardwoods. High performance finishes and innovative surface textures will start to emerge in laminate and hardwood as manufacturers look to differentiate and improve product mix.

The ceramic category will be focused on advances in printing and graphics technology, delivering a higher level of styling to the marketplace. Retailers will continue prudent investments in inventory to maximize margins while balancing cash flow requirements. Importing will most likely slow as broader domestic options are marketed.

Generally, hiring will be slow as companies in all segments of the industry seek tomaximize financial performance and wait for concrete signs of economic recovery.

McIntosh

At the macro level, we expect 2010 to be a tough market. However, we expect to grow our Avaire sales through expansion of our distributor network. We also expect to see growth in existing retailers and distributors as awareness of floating porcelain tile increases.

We are especially excited about the commercial opportunities, as our system provides solutions to common challenges with traditional tile and other hard surface flooring in the segment. We have received exceptional feedback from the A&D community since we launched the Avaire commercial program in June. In a down market, Avaire offers unique value, differentiation, and solutions that will appeal to consumers and contractors alike.

Merritt

Economically we think that at least the first half of 2010 will continue to be very challenging. Leading indicators such as unemployment, consumer confidence and credit availability just do not suggest any near term relief.

While there is a chance for some second half recovery residentially, the commercial market faces an uphill struggle for all of 2010. The extension of the home buyer’s credit by Congress should help new construction business with a small boost early in the year. But recovery will be slow.

As it relates to product, in 2010 “value” will be the leading descriptor of products sought by consumers. We will continue to see manufacturers develop more sustainable products in all categories. But value will trump almost anything short of true innovation.

For the first time in many years consumers of all income levels are now shopping at more stores in search of value. And they all have done their homework on the Internet. As a retail salesperson you better know your products and why they should appeal to a value minded consumer.

Neil Poland President of Mullican

We expect that business in 2010 will remain at 2009 levels, and we will not see any real improvement until 2011.

Remodeling will remain the only bright spot as consumers renovate their existing homes, rather than relocate. In addition, green products will continue to become increasingly popular, and we plan to expand our Green Haven line to meet this consumer need.

Michael Raskin President of MetroFlor

I foresee more consolidation— there are still too many choices for the consumer. The consumer will be more critical of products with regard to price, style, quality, sustainability and performance. The companies that excel in these categories and can demonstrate this to the end user while maintaining margins will prosper.

Ready

We believe 2010 is the year residential new construction will bottom out. We could actually see this segment grow in the second half. Residential remodel will post a moderate decline in 2010 under the weight of high unemployment and declining home values.

The commercial market will experience significant declines in 2010, reflecting the state of the broader economy.

Given the difficult economic environment, there will be continued pressure on product mix. This will include a slight shift to resilient from other more expensive categories. Within vinyl, you will see a continued shift to glass-backed flooring. Armstrong will reopen its Lancaster, Pa., facility as a dedicated glass plant to capitalize on this trend.

Lastly, Armstrong will continue to invest in new products across all categories to provide both the retailer and the end-user the broadest selection of visuals and quality grades. We want to position Armstrong to be the logical first choice.

Robitaille

We don’t anticipate any true growth will come during the first half of the year in the hardwood category. Economic indicators point to increases in sales occurring in the later part of the year when new housing construction is expected to come back. Overall, 2010 should at least provide stability in the industry and moderate growth compared to this year.

In 2010, products that meet consumers’ expectations will have some levels of success. We hope to see a bigger push toward domestic species, and locally harvested and manufactured products. These trends are gaining momentum month after month since consumers are more conscious about affecting the environment.

Another key trend driving the market right now is a softer textured look. Consumers are looking for less distressing of the wood but want the character, wider boards, subtle color variations, knots and natural imperfections that recreate the appeal of old-fashioned flooring.

What is the company doing in response to what you are forecasting to ensure success for itself and its customers?

Boe

In a downturn like this, and with the banks in the condition they are in, it’s vital that you keep a strong balance sheet. That has been a key focus of Beaulieu—to make sure we have a good, strong balance sheet to continue to weather the storm and be in a position to be able to afford to increase the business when the economy returns. That’s been vital on the finance side.

Secondly, we’re continuing to make sure that we’re focused on our costs—the cost of producing our goods as well as the expenses of getting them to market. That’s where we concentrated much of our effort in 2009 and will continue to do so in 2010. At the same time, we are going after new programs in areas we might not have participated to a great extent in the past. That’s just prudent, to be looking under every rock and leaf to see what other business is out there in which we might be able to compete.

Dossche

Bringing the right values to our dealers will be the focus of our company next year. With the introduction of several products, with unique styling and aggressive pricing, both in bamboo and cork flooring, we intend to give our retail partners the ammunition they need to combat the challenges of next year.

Furthermore, look for cork flooring to get much more of a spotlight and boost thanks to a major promotional campaign, which will kick-off early next year.

Duncan

Our focus remains where it’s always been—on innovation and exceptional styling. We are focused on bringing products to specialty retailers that excites them and excites their customers.

2010 will be a big year for Mannington’s new products, with innovation and styling excellence driving introductions across all categories. For those consumers that are in the market, it’s ultimately great looking product that wins the sale.

Finseth

Tarkett is well positioned in the resilient marketplace by providing products such as FiberFloor and Nafco LVT that resonate with consumers and retailers who want products that provide excellent performance and value.

Consumers appreciate— and seek out—flooring that is warm and comfortable underfoot; is water and moisture-resistant; stands up to scratches, scuffs, stains and indentations; is easy to maintain, and is affordable.

At Tarkett, we are positioned for the fiber-backed category growth having invested in our North American sheet vinyl facility in Farnham, Quebec, Canada. We invested five years ago and have gone through the plant startup period, and that has allowed us to work the “bugs” out of our system, enabling us to be quicker to respond to retailer and consumer demand while providing new designs and introductions in a timely manner.

Erica Hubbard Marketing director for Nafco by Tarkett

LVT is another category player that’s well positioned for success. Its products are ideal for consumers in terms of durability, comfort, ease of maintenance and installation.

Especially appealing in these economic times is its superior design. LVT products are unique in that they replicate all types of natural textures and tones, but are more cost effective in most cases.

Kelley

We continue to evaluate all aspects of our business to ensure we are as effective and efficient as possible. Our sustained investments in the Pergo brand and our operations will continue to strongly position us as a key supplier to the category both in the short and long term.

Also, under Pergo AG, our R&D team will be consolidated to drive global innovation— and Pergo will continue to develop, protect and defend our substantial intellectual property portfolio.

Kirk-Rolley

Our goals are and will continue to be to focus on our customers and to manufacture and distribute high quality, fashionable, affordable tile products that reflect the latest trends in the marketplace.

With more than 240 sales service centers across the country and an outstanding national network of distributors and retailers, we have been able to successfully leverage our distribution to consistently provide a high level of service to our customers. Our galleries, stone centers and sales service center showrooms provide our customers a resource when additional assistance is needed to help their customers make selections.

As a leader in the tile industry, we’re fortunate to have the resources to continue moving forward, despite the significant slowdown in the residential and commercial segments, by continuing to invest in technologies that allow us to create even more exciting products than the year before.

We have the best sales teams in the industry. They are extremely knowledgeable and tuned in to the current environment, as well as changes coming down the line, which allows us to adapt our focus to different industry segments as the market dictates.

Leahy

We will continue initiatives to drive productivity of all associates, invest in innovative products across categories to help differentiate and maintain prudent investments that fuel accelerated business results.

In hardwood, we have generally been in front of industry compliance; hence enhancing our domestic assortments to complement our imports has been a chief focus.

McIntosh

We continue to strengthen Avaire by adding strong distributors and focusing our education and training efforts on our retailers. We continue to add key personnel in strategic positions. We view the current economic situation as a time to leverage the unique attributes of our system, and to find high quality talent.

Merritt

We are bringing more value and innovation to every product category we participate in. We are making our value proposition easier to understand. And we will continue to work to find ways to take cost out of the channel so that we can continue to provide customers with the kinds of value they need to be successful in this market.

Poland

We are making significant investments in automated technology, as well as reducing our overall production costs and strengthening relationships with our lumber suppliers to ensure the future availability of raw materials.

Raskin

We are advertising more and investing in quality control systems, sustainability and marketing materials. We have introduced our signature display and brand new architect folders and literature. We also have new products that continue to lead in design and innovations.

Ready

We continue to do the things you would expect in this tough environment—we manage our spending, continue to drive cost productivity through process improvement, and adjust our manufacturing footprint based on demand.

However, through this process, we will not cut our investment in what’s important to our success: brand investment, new products, quality and programs that drive profitable sales for our customers. You have seen in 2009, and will continue to see in 2010, Armstrong take a leadership position in the market.

Robitaille

We have many new products to be launched early next year that meet the needs for recent and future trends. Essentially, we have much of the product base covered but we are working on added value products to complete our line.

We are also working very closely with our distribution network to ensure that training is occurring across the sales network and at all levels.

Besides housing, what would you say is the biggest challenge with respect to each individual category(s) in which your company does business?

Boe

The big challenge is that demand isn’t as strong as it has been in the past, while at the same time, raw material costs are going up. Typically, at this time of the year, things will slow down a bit and costs might come down some but we’re seeing the reverse. Polypropylene is going up, nylon is going up and polyester is going up, so all the key materials that go into our face fibers are going counter to where we need them to go right now. This suggests we have got to get some pricing action to offset this, unless things turn around for us very quickly. That’s going to be one big challenge—how to avoid getting margins compressed any more.

We continue to promote both our Magic Fresh and Healthy Home products because consumers today are concerned about the environment they are living in. They want to make sure they can create a cleaner environment for themselves and their families, so those types of products have merit and provide a benefit for those people who have concerns about odor in the home from smoke or pets, or are concerned about bacteria that might be brought into the house or if something spills. The Healthy Home product takes care of those issues.

We are looking at green in a collective framework of what we can recycle, how we can cut down on water usage and energy consumption in the production of our products as well as doing things to enhance their performance in the home or in other end use applications.

Dossche

Our biggest challenge, which at the same time is our biggest opportunity, will be to educate our retail partners and ultimately the consumer about the unique and superior values, features and benefits of our cork and bamboo flooring in an effort to continue to gain market share against the cheaper, more commodity- and recession-friendly products which will continue to enjoy somewhat of a surge in popularity in 2010 just like we’ve seen during 2009.

Furthermore, a declining dollar will put continuous pressure on any exotics and other non-domestic species and drive prices of these products higher at retail.

Hubbard

Within the vinyl category, sustainability will continue to be a huge buzzword. Fortunately at Nafco, we are not only committed to developing a superior, American-made LVT, but also doing so in a way that is positive for the environment.

All our planks and tiles are FloorScore certified for assurance of low-emitting materials and indoor air quality. Because we are made in the USA we not only use less energy in transporting our products, we bring in over 65% of our raw materials from within 200 miles of our plant. NAFCO has developed a process for recycling all our manufactured scrap as well as formulated the planks and tiles so that post industrial and post consumer waste can be included.

Jeff Katz Director of laminates for Tarkett residential

The market for laminate has certainly been impacted by the economy. To reverse the trend, we need to reinforce laminate is a great performing product in the right areas. If manufacturers, distributors and retailers focus on the best applications for each product, consumer confidence will grow, resulting in increased demand.

Dealers should focus on value added products—not just the cheapest, thinnest laminate they can buy. There are customers for both types of products, and dealers need to keep a product mix that they can service to consumers at the level of their competitors. And, if that means keeping a pallet or two of 10 to 15 SKUs to compete with the big boxes, then that’s what the dealer needs to do.

Kelley

There remains over-capacity in the laminate category. This excess capacity tends to drive down retailer and manufacturer margins until market demand catches up or capacity is reduced. In addition, it’s a continued challenge for laminate manufacturers to remain both increasingly cost competitive and relevant to consumers and the trade in terms of benefits, value and messaging. Price alone will not be the deciding factor for the consumer, retailer or manufacturer.

Kirk-Rolley

As a tile and stone company our biggest challenge is to continue to aggressively manage our costs—both manufacturing and selling—through what we hope is the tail end of the downturn in 2010, while being poised to invest and keep ahead of the competition. A good example on the manufacturing side is our new OutStand Technology, a patent-pending glaze technique that provides tile with unparalleled surface wear and stain resistance.

It also infuses the tile with Microban antimicrobial protection, which provides a layer of protection from stain- and odor-causing bacteria that won’t wash off or wear away.

We want to continue to invest and innovate even when sales are slow, to be ready for sales to pick up.

In addition, we have selectively re-deployed our sales force between residential and commercial markets to respond to opportunities, and we will closely monitor this mix as the economic environment begins to improve and change in 2010.

Leahy

We see a number of challenges on the hard surface side. Some of the biggest among them are:

Overall. Slow demixing of categories.

Vinyl. The need to improve choices of vinyl tile assortment to meet current trends.

Hardwood. The need to be compliant with new laws and regulations—something of which we have been in front.

Laminate. Growing share with a glut of domestic capacity available in the marketplace.

Ceramic: Balancing inventory productivity efforts in a slow economy.

Despite these and other challenges, we continue to remain committed to delivering superior service to our customers across all categories while managing proper inventories.

McIntosh

Frankly, our biggest challenge is educating the market across the spectrum—consumers, installers, retailers and contractors— about the availability and advantages of our floating tile system. This work will position our products nicely in anticipation of increased economic activity over the next two to three years.

Merritt

In all manufactured products raw material costs remain a challenge. In laminate and wood, imports and inventory dumping remain a [problem]. Profitability is significantly impacted by the challenge to utilize assets in this low volume climate.

Poland

The biggest issue facing the hardwood industry is the lack of lumber available because approximately half of the sawmills closed and/or reduced production due to the weakened economy. The lack of raw material has led to an increase in lumber prices, and when you consider the reduction in selling prices because of weak consumer demand, it greatly reduces the margins for the flooring manufacturer.

As a result, flooring prices will need to increase throughout the industry.

Raskin

There are many more players, both large and small, entering the LVT category. This is good from a standpoint that the market will grow and the pie will be larger, but it could be a negative if companies compete on price alone. Price is critical—and is very important—but you cannot sacrifice quality for price.

This could deter consumers and retailers away from the category especially if companies don’t stand behind their products. This is not to say the category has to be perfect because, with innovation, there are bumps along the way.

The key will be how companies respond to adversity to gain the confidence of end users and retailers.

Ready

A significant challenge that will impact all categories in 2010 is raw material inflation. We have already seen very significant lumber inflation in the second half of 2009. In vinyl, PVC and plasticizer prices have started to increase as suppliers have reduced their capacity and oil has approached $80 per barrel.

From an overall perspective, keeping our focus on what we can control is critical. It’s very easy to get lost in all the bad economic news we hear every day. We simply can’t. Every business has things they can do better. Improvement made today will pay back many times when the market gets better. Keeping the proper perspective is critical in these difficult times.

We will continue to invest in products, quality and service, and will continue to adjust our manufacturing footprint based on changes in demand and drive process improvement to get “better performance at lower cost.” We will continue to outperform the market.

The natural tendency is to pull back and wait for the world to get better. That does not help our customers—they need sales now. Our commitment is to provide the products and programs in 2010 to drive sales.

Robitaille

Right now the biggest challenge for our industry (wood) is to maintain market share in the overall floor covering industry, since some consumers have not only been moving down to lower priced products within the hardwood category but they have been moving down to other lower priced materials. So, the challenge will be to get them to understand the true value of hardwood versus other floor covering categories.