KEYNOTER: Vance Bell, CEO of Shaw Industries, was one of the keynote speakers at the recent Alliance Flooring convention at AmericasMart Atlanta, and he painted a vivid picture of the state of the industry. His candor kept the audience riveted as he recounted facts and figures: “The housing and flooring markets are going through their biggest downturn ever,” he said. “Don’t confuse reality with pessimism because the industry is cyclical and the industry will come back.” However, he noted new home sales were down 26% in 2007; new housing starts were down 24% last year and new home prices were down 10%. Existing home sales were down 6% in the fourth quarter of 2007 and foreclosures continue at an alarming rate. He said that new and existing home sales are expected to be down 14% this year.

STRAIGHT TALK: Bell called it like he saw it. No sugarcoating, no euphemisms. “We’ve been in a recession for over a year-and-a-half and we’re half way through it, but I’m not convinced yet.” He implies it might run deeper and longer. Bell went on to examine the industry’s sales in the past four years. In 2005, industry sales were $23.9 billion at the manufacturer’s level; in 2006, sales were $23.4 billion; in 2007, from $21 billion to $21.5 billion. It is projected that in 2008 sales will be under $20 billion—which is a drop of 17% since 2005. Discussing the commercial market, he said in 2007 and the beginning of 2008 that segment probably peaked, indicating the contract flooring business could slow down.

ADVICE: Bell hit high notes during his talk as well. He said, “From 2003 to 2005, we were all riding a wave where anyone could be successful in this industry. Now that is not the case.” And then he went on to offer 10 points on “how to survive and thrive in this critical year.” 1-Look at your business. Take a clear-eyed, analytical view of it and be willing to change things. 2- Reduce wasteful, frivolous spending. 3-Invest any profits you make back into your business. 4-Go green. 5-Focus on your people; your team’s quality, integrity and development is a real competitive advantage that you already have. 6- Diversify and grow new categories. 7-Find and sell to high-end luxury consumers. 8- Service. Service. Service. Specialty retail stores are in the best shape ever compared with the big boxes. 9-Devise Internet and technology strategies. 10-Align yourself with strong suppliers. He said “Made in the USA” will be a very important label for retailers and the green initiative will be their best opportunity.

LOGUE-GISTICS: Alliance Flooring’s co-CEO, Jon Logue, addressed the group and shared some statistics of his own. He said prices are going up in all categories even though we just concluded a down year. He said residential carpet shipments were down 13% and hard surface was down 14%, by segment: resilient, 5%; laminate, 7%; ceramic, 18%, and hardwood, 17%. He said commercial business was 26% of the industry in 2005, 30% in 2006 and projections are that in 2008 it will hit 32%. Logue pointed out that 40% of all commercial business is sold by retailers. He, too, stressed that the green initiative and “Made in America” will afford retailers their “biggest opportunity” throughout the year.

DIVERSIFY!: Logue urged members to diversify their operation for survival and growth. He suggested offering cork and bamboo products; look into hardwood click systems; grow your commercial business; use consumer credit; carry blinds, wallpaper or other accessories; look for acquisitions, and use guerilla marketing, among other innovations. I guess he was saying, be creative, be aggressive, take risks. That’s the antidote for a slowdown.