Armstrong’s Artesian by Robbins

Hicksville, N.Y.—If one had to sum up the state of the wood flooring industry midway through 2006 using just one word, the term most likely used would be “strong.” Most of the wood flooring executives interviewed for this story said their companies have enjoyed double-digit growth in sales and square feet compared to the same period last year. The majority also look forward to a positive second half of the year, with several planning new product launches as well as innovations.

Wider planks, more rustic, handscraped looks, new click installation systems continue to be hot as far as trends go, as are the darker, more exotic woods. And while challenged by the growth of Asian imports, domestic mills believe this will only help it grow its own business now and in the future.

“PanTim’s business has increased its business this year in double-digits both in square feet and dollars and our growth rate is consistent with that of the last nine years,” said Jim Burke, national sales manager, flooring, for PanTim Wood Products. “In the last month, we have seen a slight cooling off of the growth.”

“We’re up in the low double-digits so far,” said Chris Thompson, vice president of sales and marketing for Mirage Hardwood Flooring. “The industry, as a whole, certainly has been impacted by more global suppliers becoming involved in the business, particularly from Asia. They are both selling direct and through different channels. Companies that just weren’t there several years ago now are getting into our market.

“To combat this, what we can do is,” he explained, “to continue to make the best product we can as well as to continue the major focus of our branding efforts. We feel that with a quality product and with the best service, and the best brand name out there, that’s what we have to offer. We don’t believe, at least at this point, that these new companies have that.”

“The main challenge is imports,” said Ed Korczak, executive director of the National Wood Flooring Association ( NWFA), “however, volume is not up as much from China, Brazil, Indonesia, etc., as in the past two to three years. Along with this, import codes still are not accurate. That problem is being addressed, and at the same time production costs in China and Brazil are rising. The bottom line is that this is helping prices to start rising again in the U.S.”

Like many other industries, noted Roger Guay, director of sales for Mercier, we had to deal with many costs increases like gasoline prices and exchange rates for exportation, since we cover a wide territory. “The new construction, which was very high last year, is slowing down like the overall economy. The challenge is to contain such cost increases in front of the growing imports coming from Asia, pulling prices down.”

Other mills, such as PanTim, depend on positive conditions abroad contributing to its continued growth. “All our hardwood comes from four different Asian countries,” said Burke. “In one of the countries where we have plants, there has been problems getting logs this year. Though our companies use only certified legal logs, governments have cracked down on the transportation of all logs. Curtailing the lumber industry has hurt those countries’ economy which has put pressure on the government. The management of our plants is working with the government to help curtail illegal logging without jeopardizing the important timber industry.”

Rising interest rates are having a negative affect on new home construction (because of higher mortgage rates) and remodeling (because of fewer refinancings, which take equity out of existing homes and make it available for remodeling), noted Don Finkell, CEO of Anderson Hardwood. “Refinancing will be hurt by slower home price appreciation. People will qualify for smaller loan amounts because of higher monthly payments. Remodeling will be hurt less than new construction because people normally remodel the old home if they can’t buy a new one.

“For this reason,” he explained, “solid flooring will be hit much harder than engineered. The thickness of solid makes it not as suitable for remodeling. Engineered is normally thinner and can go overtop most existing sub-floors. Solids need a special, lowered sub-floor, which is not a problem for a new home, but can sometimes be difficult in an existing home.

“Another challenge is making sure that the wood is harvested legally,” added Finkell. “When dealing with foreign countries, we are dependent on their policies and procedures. Anderson takes this challenge very seriously and we take no shortcuts in reviewing the documentation and ensuring its authenticity.”

“We feel very good with our first half performance,” said Frank Ready, president and CEO of Armstrong Industries. “While solids grew, engineered wood flooring grew even more rapidly, primarily due to the development of slab-on-grade construction. We also will continue to see the expansion of several non-oak species, such hickory, ash, birch, etc.”

Ready said some of the current industry trends include: the growth of engineered floor versus solid hardwood; the growth and popularity of new species, and specialty visuals in hardwood floors.

“Increasing capacity to meet the burgeoning consumer demand for hardwood flooring continues to be an industry challenge,” he said. “Recently we announced investments that will increase manufacturing capacity and broaden the product portfolio of our hardwood flooring business:

• “The acquisition of Capella Engineered Wood—this acquisition will increase Armstrong’s U.S. manufacturing capacity and add another brand to the wood portfolio;

• “A manufacturing joint venture in China—this investment will also increase manufacturing capacity for engineered wood, and

• “The acquisition of HomerWood—this investment will expand Armstrong’s premium solid wood product offerings to include rapidly growing wide width and hand-scraped products.

“These transactions are part of our program to grow Armstrong’s flooring business in North America,” he explained. “The investments will increase our manufacturing capacity in engineered wood, and significantly expand our portfolio of premium solid wood products. In addition, new product launches come in direct response to consumer demand for greater choice, higher quality and lower price.”

New Innovations

Regarding recent new innovations and product trends, executives continued to mention darker colors, wider planks and handscraped looks. “So far,” said Burke, “in the first half of the year, we’ve introduced our FineLine—Midtown collection, which features a new contemporary look inspired by the visuals of floors used in old industrial buildings. Meanwhile, wider planks and exotics are the trends all across the country. In addition we’ve had a great reaction to almost black stains in a color we call espresso.”

Anderson introduced Fumed Cherry into its Virginia Vintage Brand at Surfaces 2006. Unlike the traditional American Cherry or Brazilian Cherry, which are prone to change in color over time from light to dark, Anderson’s Fumed Cherry is manufactured to be naturally darker right away, which allows for less variation in color over time, said Mike Beavers, senior vice president of marketing and merchandising. “And the fuming process allows the color to penetrate the entire surface layer which helps conceal surface scratches. The boards are available in 5-in. or 3/5-in. and 7-in. wide planks.

“We also introduced our Coastal Art Collection at Surfaces 2006,” he added. “A multi-step process, which includes hand-staining, helps to achieve the desired look. To give the collection a more authentic beach feeling, the boards are 6 1/4-in. wide planks. The collection includes two species: white oak and hickory. The white oak comes in the color Lighthouse and is a wide-textured plank that resembles a white-washed boardwalk along the beach. The hickory comes in two colors: Barnacle Board and Boardwalk, both of which resemble an old pier, however, Barnacle Board is the darker of the two.”

According to Korczak, the new click installation systems most likely have had the biggest impact so far this year. Regarding hot product trends for 2006, he noted, it’s the same as last year: plank flooring and rustic species. “Rustic represents only about 10% of the market, but is up from 2% to 3% from just a few years ago. There is no sign of this letting up.”

A Big Hit

Many new products were developed by Mercier last year, noted Guay. “The main innovations were in the new textures developed, darker colors, and also a lower gloss level, bringing the appearance of the floor closer to the real nature of wood. Programs like our new ‘Design,’ which is unique to Mercier Wood Flooring, offering over 1,260 different products to the consumers were also launched with success and definitely hit home with the consumers looking for a custom made floor.

“The main trends are the following,” he added, “wider planks, products closer to the real nature of wood in the design (visible veins and knots, lower gloss level). Also, we see new species coming into the market, mainly exotic species featuring specific natural colors.”

There’s been an increased popularity of specialty visuals that do not allow for sanding and refinishing once installed, noted Ready, such as glazed and color-washed, distressed and hand-scraped.

“From a visual standpoint,” he added, “we’ve been seeing an emerging trend related to burnt/ charred effects. As it relates to flooring and hardwood, it is often called ‘French bleed.’ The process enables manufacturers to create a new type of distressing with an almost smoky look. Dark and dramatic on dark woods, it is soft
and supple on light, natural woods like yellow birch and maple. The effect may be a brown wash versus black tone. Micro beveled edges pick up the color for a noted delineation from board to board. Armstrong debuted the Color Wash Collection this fall as part of the Robbins Fine Hardwood Flooring line.”

Ready also noted several key species trends. These include movement from South American species (e.g. Brazilian Cherry) into species from Africa, India and Asia-Pacific regions, as well as a trend toward more distinctive grain patterns and colors beyond traditional “tropical” orange/red-brown.

“We expect market conditions to be tougher in the second half,” he concluded, “particularly in new home construction. That being said, we will continue to be aggressive with new product launches and display placements.”
—Louis Iannaco