By Steven Feldman
Talk to most any manufacturer, and it will classify 2008 as a year that produced the steepest declines in company history. Almost all were down double digits, some as much as 20% or greater. But not every company waded through the muck. Metroflor, among the largest luxury vinyl tile (LVT) suppliers in the U.S., posted exceptional gains, according to Michael Raskin, president, seemingly defying the laws of a difficult economic landscape.

Raskin is not the least bit surprised. “Metroflor encompasses a family of brands sold exclusively through floor covering distribution—Metroflor, Artistik, Konecto, Starloc and Teknoflor. While each brand grew in its own right, Konecto, which opened up a whole new category—glueless LVT—has become the largest segment of our business. In just Konecto alone we are doing tens of millions of dollars, translating to over $100 million at retail.”

Why? “We were the first to market with a product that responds to the needs of the marketplace,” Raskin said. “It addresses critical issues such as subfloor prep, ease of installation and moisture. Looking back, the timing of it could not have been better because laminate, which has been in the marketplace for more than 10 years, was seeing its profit opportunities being diminished. We’re also told certain customers have been unsatisfied with the performance and overall quality of some of the less expensive imports.”

One Konecto distributor who requested anonymity agreed that the product offers the advantages of a floating floor and ease of installation vs. laminate. “And where the laminate category has become unprofitable for many retailers because of price degradation, this product gave retailers something they could sell that was exciting and has not been driven down on price.”

But it’s not just Konecto that’s carrying the company. The secret to success begins with exposure. Raskin said between all its brands, Metroflor has between 7,000 and 8,000 displays in the marketplace.

Next is its distribution. “One thing we’ve done over time is align ourselves with distributors who really know how to sell vinyl products,” Raskin said. “They know exactly where to take each respective product. I also think the strength of their relationships with their customers’ help get our products placed very quickly.”

Helping to get its products placed are the substantial profit opportunities inherent in selling Metroflor, whether it’s at the distributor or retail level.

“First, it’s a patented product, so it can’t be replicated by other manufacturers,” Raskin said. “In fact, there have been multiple attempts by manufacturers to introduce a similar product, but none to this point has taken hold, and we have every intention of defending our intellectual property. No. 2, our distributors make money because the product is made overseas. They are buying containers and have to stock more, therefore it is necessary for them to make a good margin to justify the inventory. We make sure our products are priced so they can do that.” No. 3, retailers benefit in this scenario because those savings are passed onto the dealer.

In fact, Raskin noted how retailers can make as much as 50% margin on some of its products. “This is important as compared to laminate, where we hear margins have eroded to less than 20% in some cases.”

Another factor contributing to Metroflor’s success in 2008 was an increase in marketing. “We stepped up our trade advertising with FCNews to become more visible to the retailer,” Raskin said. “In addition, we produced a marketing piece that discussed the company’s vision, history, product portfolio and merchandising to familiarize the industry with all Metroflor has to offer.”

Ultimately, however, the success of any product rests with the consumer and end user, and, according to Raskin, they have been Metroflor’s best advertising vehicle. “Our vice president of sales, Rick Spano, was getting bagels one morning not too long ago and noticed Metroflor was on the floor. He asked the owner what product it was, and he said Konecto. When Rick told the owner that it was our product, he said, ‘I love this product, it’s the best. Everybody asks me where I got this floor, and I tell them it’s Konecto.’ What they see is the great styling. They don’t even know it’s a floating floor.”

That story illustrates the versatility of Metroflor products, which are applicable for commercial as well as residential projects. “We are doing well where replacement costs are a factor, because our product in most cases easily goes over existing floors and/or requires little or no subfloor prep,” Raskin said. “So the cost factor from start to completion is greatly reduced, making it attractive to end users.”

The aforementioned distributor noted that Konecto is also finding favor in property management. “For the multi-family market, it alleviates all the problems of installation and gives a high-end wood look at a fraction of the price. The interesting thing is that the best-selling product in the line is also the highest-priced because of the realism.”

Despite some projections that 2009 will be even more challenging than ’08, Raskin said it’s full speed ahead for Metroflor with redesigned headers, redesigned architectural folders, a sustainability message and new lines in Konecto. “We know it will be a challenging climate, but we think with our new introductions and excitement for the category we can maintain the momentum with an increase of approximately 15%.”

There’s one more reason why Metroflor continues to be a shining light in the darkness. And that’s the people. As the distributor told FCNews, “Doing business with Metroflor is like dealing with family. They understand the flooring industry. It’s a small group of people that we know and like.”