Hicksville, N.Y.—Depending upon who you talk to among the hardwood flooring category’s executives, the mills either enjoyed a phenomenal year in 2005, or were slightly disappointed with their results. Apparently, it was that kind of year. “I believe pretty much everyone in the industry is disappointed with the year they’ve had,” said Roger Guay, director of sales for mercier Wood Floors.

“We understand some manufacturers have suffered more than others. Quite frankly, we feel that we’re very fortunate that our sales network, the way it is developed, while affected, was not affected as much as some of the other manufacturers’ networks. “So, while we feel glad in a sense with that, to say that everything is rosy would be a lie,” he explained. “We didn’t get to where we had planned to in terms of growth, yet we had a good year, but a tough one. It was tough to have a good year while we were shooting for an outstanding one, pretty much like everyone was shooting for.”

“The Chinese situation has been a major factor, the Asian invasion of the hardwood flooring business,” continued Guay. “Also, if you look at this year there has been in some cases a decline in raw material prices. That has widened the gap between unfinished and prefinished product. That has created some challenges for our industry as prefinishers of hardwood flooring. When that gap becomes sizeable enough that consumers or some installers and contractors decide to shift back to unfinished product, that creates a challenge, big time.

“Now, we believe the situation on the raw materials side of things started to correct itself a few months ago and will continue to correct itself,” he added, “but that was one added challenge this year that quite frankly, no one saw coming.”

Kim Holm, president of residential business for Mannington Mills, had a different take on things. “Our expectation for 2005 was to see growth in all categories. As we close out the year, we are pleased to report that we’ve fulfilled that expectation. For hardwood in particular, we experienced significant growth both at retail and with the new home construction segment. Growth in 2004 and 2005 for hardwood has been comfortably in the double digits.

“Engineered wood has been hit with increases on virtually every key raw material, as well as the energy and fuel increases that have been seen in every category,” he added. “Those increases have been absorbed up to this point but ultimately will have to be passed through. We are anticipating a price increase in early 2006.”

According to Holm, one of the biggest issues for the hardwood industry has been the significant increase in the number of competitors. “In contrast to a category like vinyl, hardwood has had an influx of manufacturers enter the market over the past couple of years. To us, this means we’ve got to make sure that we are continually in touch with all the market trends so that we can provide our customers with the products and programs that they need.”

“We have had a phenomenal year,” said Jeff Sills, COO of Anderson Hardwood Floors. “We’ve been very, very pleased. We’ve met our expectations. I believe the hardwood industry overall is up this year. I not sure exactly what the percentages are, but my guess is probably somewhere 7% to 8% ahead of where it was last year. “The increased costs have certainly had an impact on everybody,” he explained.

“You’ve got fuel costs that have been up dramatically, you’ve got [higher] energy costs across the board, and health benefit costs are up. It’s made everyone kind of ratchet down and watch every expense they can to try and keep things in check. Basically, we tried to absorb the cost of increases in hopes that things would settle down, but yes, there have been some increases, though at this point in time, we did not pass them through, we absorbed them.

“We saw a continued increase in sales in our handcrafted category,” added Sills, “which is more profitable for the manufacturer, more profitable for the distributor and certainly more profitable for the retailer. So, we saw an increase in people trading up into better quality goods.” Sills also commented on the Asian influence and the effect it had on the wood flooring business in 2005.

“We’ve all been affected and will continue to be by the imports coming in from China. We are seeing it across the board in every category we’ve got. In hardwood, the Chinese are knocking the product off. I believe the biggest concern the people over here have got to deal with is, the consistency of the product, and what is going to happen if they have a problem with it. So, it puts pressure on the U.S. manufacturers to make sure quality is constantly improving, and our products be better and have more upscale consumer appeal.”

Julien Dufresne, vice president of sales and marketing for Preverco Hardwood Flooring, said, “If you look at the overall sales, we haven’t met the [numbers] we were hoping to make one year ago. But while we didn’t meet those numbers, when we look at the overall business I believe we did very well. We may be down 5% or so, while some of our competitors are down more like 25% to 30% this year.

“Retail business has been very soft for the year but while the company was a little bit down, I believe the overall industry was quite down for the North American manufacturer,” he explained. “When you look at all the Chinese imports that have been coming into the market this year, it has been huge. We are not sure of the final numbers right now but we know it is massive.

“The good thing is,” he maintained, “there is still plenty of wood being sold in the market. Unfortunately, we have see more and more imported product with some really low prices, but that’s a fact of life now and we have to adjust to it. “Regarding the increase in energy costs,” concluded Dufresne, “I don’t believe it affected the wood business all that much. In hardwood, it only affects part of the finish we use, but the cost of the finish is fairly small on wood.”