Floor Covering Weekly June 3, 2013 : Page 1

Vol. 62 No. 11 A Hearst Business Publication June 3, 2013 $4 Kermit Baker: Aging workforce mirrors customer base 11 Mohawk uses four brands to penetrate laminate By Raymond Pina [T, N.C.] Since Mohawk Industry’s acquisition of Unilin back in 2005, it’s made strategic moves in both technology and acquisitions that have positioned it as a leader in the laminate market across multiple price points, designs and retail channels. “We’ve done a lot of things over the years from a positioning, product and merchandising standpoint that has come together successfully. We’ve acquired brands and technologies in stages when they’ve looked promising and it’s the result of always going a er what we consider to be real strengths in construction, fashion and positioning,” said Roger Farabee, senior vice president of marketing, Unilin, which oversees Mohawk’s laminate portfolio. ree of the brands — Quick-Step, Mohawk and Columbia Flooring — are rmly planted in specialty retail and with the recent acquisition of Pergo, Mohawk Industries now has a foothold in the home center channel as well. Together, the brands allow the company to come to market with a number of signature prod-uct lines o ering — everything from for-eign air to exotic species and traditional American wood visuals. Beaulieu celebrates 35 Next generation prepares to continue legacy By Janet Herlihy e Beaulieu Group celebrates its 35th anni-versary this year; years marked by a profound transformation from a manufacturer of low-end rugs and ber supplier to the industry’s third largest U.S. carpet mill with divisions in Canada and Australia. Today, the company remains privately held and it will be up to the second generation of the Bouckaert family to continue to drive the entrepreneurial spirit that became Beaulieu’s hallmark. Under Carl Bouckaert’s hands-on leader-ship style, the company grew from relative obscurity to become one of the rst mills to vertically integrate. And while Bouckaert said his greatest accomplishment is having brought together a group of loyal people who have cre-can carry on the traditions you started. “I am very proud and happy that the next generation is getting involved. It sends a mes-sage to our employees, our customers and the industry that Beaulieu will be in the market for the long term,” he added. Ready for next 35 years Today, Beaulieu Group remains in the hands of the Bouckaert family. In 2009, the four Bouckaert children, all born in Dalton, joined their parents on the Beaulieu Board of Directors. Sisters Stephanie and Nathalie are “well-informed co-owners and board mem-bers,” according to Carl, but are not active in the business. Brothers Nicolas, now 31 years old, and Nicolas Bouckaert, Mieke Hanssens, Nathalie Bouckaert Pollard, Stan Bouckaert, Carl Bouckaert and Stephanie Bouckaert ated a billion dollar plus company that has been able to weather the nancial storm of the recession, he added with fatherly pride, “It is satisfying to see your children grow up to be responsible, hard-working individuals who Continued on page 20 Great Western Flooring: A twist on tradition By Janet Herlihy At rst glance, Great Western Flooring (GWF), founded in 1981 by Steve Chirico, president, as Great Western Tile Company to serve the western suburbs of Chicago, would seem to be a typical family ooring business. Chirico’s daughters Lauren Voit and Dana Chirico grew up in the business, which was incorporated as Great Western Flooring in 1984. ey joined the family operation and are taking on more and more responsibilities. But GWF is dedicated not only to upholding family values with its customers, community and the environment, but also to nding new opportunities in the post-recession economy. Steve Chirico modestly sums up the past 33 years, saying, “It takes some luck and hard work and we are blessed to live in an area that survived the recession pretty well.” Being a retailer that is devoted to “ e ART of ooring: Accountability, Reliability and Trust, our promises to you,” quali ed it for a partnership with Costco that began in Octo-Continued on page 23 6 Lauren Voit (left), Steve Chirico and Dana Chirico are keeping GWF innovative and successful. ber 2012. at partnership is helping GWF extend its reach in the Chicago area farther than its three design showrooms in Naperville, Continued on page 23 P e r i o d i c a l For breaking news updated each business day, visit us online at www.fcw1.com

Great Western Flooring: A twist on tradition

Janet Herlihy


At first glance, Great Western Flooring (GWF), founded in 1981 by Steve Chirico, president, as Great Western Tile Company to serve the western suburbs of Chicago, would seem to be a typical family flooring business.

Chirico’s daughters Lauren Voit and Dana Chirico grew up in the business, which was incorporated as Great Western Flooring in 1984. they joined the family operation and are taking on more and more responsibilities. But GWF is dedicated not only to upholding family values with its customers, community and the environment, but also to finding new opportunities in the post-recession economy.

Steve Chirico modestly sums up the past 33 years, saying, “It takes some luck and hard work and we are blessed to live in an area that survived the recession pretty well.”

Being a retailer that is devoted to “the ART of flooring: Accountability, Reliability and Trust, our promises to you,” qualified it for a partnership with Costco that began in October 2012. that partnership is helping GWF extend its reach in the Chicago area farther than its three design showrooms in Naperville, Oswego and St. Charles would allow.

Costco has had an ongoing kiosk program for about 10 years, according to Chirico. “Flooring was problematic and they had stopped it but they decided to bring it back,” he said. “Everything is about making sure the members are happy. It decided to partner with bricks and mortar stores because there is a similar culture of customer service.”

Costco approached Shaw Industries to help set up a flooring program in its warehouse stores. According to Voit, vice president, of sales, design and purchasing, “We were selected for this area. there is a kiosk on display in seven Costco warehouses that lets shoppers know Costco offers flooring: carpet, wood, laminate and LVT. fie contact number comes to us.”

In November 2012, GWF established a shop-at-home program to support the Costco partnership. Dana Chirico is vice president overseeing the In Home Design program. “We have three outside sales shop-at-home equipped vans and four of us rotate the calls,” said Steve Chirico.

GWF also began setting up mini-showrooms inside Costco locations on a roadshow basis in January this year. “Our staffmans the minishowrooms for four to 13 days and we move among the seven Costco locations,” Voit said. “We are reaching a totally different customer and for some of the locations, consumers who would not normally come to the western suburbs where we have our design showrooms.”

While Voit and Dana Chirico have defined areas, Steve Chirico oversees the company at large, handling financial issues and certain large projects, both residential and commercial. “I handle all the legal issues like contracts and leases and warranty issues with customers,” he said. “And all three of us work on the showroom floor with customers. Working with customers who are excited about new projects is exciting for us too.”

Today, GWF does about 15 percent of its business through commercial projects, 30 percent residential replacement and the remaining 55 percent through new construction.

During the economic slump, residential replacement became 75 percent of sales, according to Voit. “But there was a big swing back to builder in 2012,” Voit reported, adding, “fiat is continuing to grow this year. “Last year, it was up 15 percent over 2011 and, so far in 2013, it’s up 35 percent compared to the same period in 2012,” she said. All GWF stores are Mohawk Floorscapes dealers as well as Shaw Flooring Galleries. “We do a lot of good business with both suppliers,” Voit said.

Tile is the bedrock of Great Western’s business and it is known for a great selection of tile, according to Voit. “We carry boutique ceramic brands including Sonoma Tilemakers, Encore Ceramics and AKDO,” she added

Chirico operates GWF as sustainably as possible. “fie warehouse currently has the largest rooftop solar panel system in the state,” said Voit. “It was built in 2012 and when the solar was turned on in June, we began generating all our own energy and actually sell excess back to the grid.”

Great Western also recycles postconsumer carpet and cushion and operates an almost paperless business. “We use RFMS systems, have all LED light bulbs and run fuel-efficient vehicles in our fleet,” she added.

Read the full article at http://bt.e-ditionsbyfry.com/article/Great+Western+Flooring%3A+A+twist+on+tradition/1417724/161681/article.html.

Beaulieu celebrates 35

Janet Herlihy


The Beaulieu Group celebrates its 35th anniversary this year; years marked by a profound transformation from a manufacturer of low-end rugs and fiber supplier to the industry’s third largest U.S. carpet mill with divisions in Canada and Australia. Today, the company remains privately held and it will be up to the second generation of the Bouckaert family to continue to drive the entrepreneurial spirit that became Beaulieu’s hallmark.

Under Carl Bouckaert’s hands-on leadership style, the company grew from relative obscurity to become one of the first mills to vertically integrate. And while Bouckaert said his greatest accomplishment is having brought together a group of loyal people who have created a billion dollar plus company that has been able to weather the financial storm of the recession, he added with fatherly pride, “It is satisfying to see your children grow up to be responsible, hard-working individuals who can carry on the traditions you started.

“I am very proud and happy that the next generation is getting involved. It sends a message to our employees, our customers and the industry that Beaulieu will be in the market for the long term,” he added.

Ready for next 35 years

Today, Beaulieu Group remains in the hands of the Bouckaert family. In 2009, the four Bouckaert children, all born in Dalton, joined their parents on the Beaulieu Board of Directors. Sisters Stephanie and Nathalie are “well-informed co-owners and board members,” according to Carl, but are not active in the business. Brothers Nicolas, now 31 years old, and Stan, now 27, joined the company formally in the past year. Nicolas is president of Beaulieu Commercial, including BOLYU and Aqua divisions, and was elected chairman of the board in 2011; Stan is new business development manager.

Both men grew up in the carpet business beginning their Beaulieu education in grade school during summer vacations, when they spent a month each year working at various jobs in the plants.

“I liked working in the plants,” Nicolas said, taking turns at everything from running a tufting machine to driving a forklift, and when he was older, to sales experience.

“It allowed us to learn to appreciate the industry and respect the people who worked there — how critical they are to the success of the company,” he said

Stan also remembers his first jobs, at a yarn extrusion plant, wrapping rugs, running looms and driving a pole lift to move rolls of carpet. “After that, I spent time working in various office jobs including quality control and accounting. It was all about learning how the business operated,” Stan said.

Family calling

After college, Nicolas Bouckaert completed a Masters in marketing at Vlerick Management School, Belgium. He then earned an EMBA for Families in Business through Kennesaw State University in Georgia that focused on successful strategies for family businesses.

Having finished his formal education, Nicolas Bouckaert traveled to the Beaulieu Australia operation, where he worked for six months in 2010 and 2011,first in manufacturing and then as sales manager for the south island of New Zealand.

Even after exploring other options, he realized that no other career would be as personal and have as much meaning for him as working for Beaulieu. He stressed, “It is the business my grandfather started in Europe and my parents brought to the U.S. I have decided to focus my time and attention on the family business.”

He is thoroughly enjoying his role as head of the commercial operation, saying, “We are doing a lot with design and custom projects. It is an interesting world.”

He also remembers the lesson he learned early on about the people behind the company. “It is a great opportunity to be working with David Vita, Steve Ladd, Randy Hatch and Lisa Litzinger,” Nicolas noted. “I have learned a tremendous amount in the past year.”

Stan Bouckaert’s formal education took a slightly different turn with a real estate degree from the University of Georgia and a Masters from Georgia Tech in City and Regional Planning with a specialization in Urban Design. He is currently in the EMBA for Families in Business program at the Coles College of Business.

He worked for a solar panel company and a recycling operation — both providing him with insights and knowledge of sustainable practices. Combined with LEED certification and classes on green buildings and products, Stan said he’s learned how those principles will help the family business.

“In the last two years of working with recycling, I realized the potential of recycling and the carpet industry. I now have a unique opportunity with Beaulieu,” Stan Bouckaert said.

As new business development manager, Stan is “doing research, putting together business plans to determine which make strategic sense for the long-term future of Beaulieu. It has huge potential and I am happy to be a part of the business,” he stated.

As the next generation of Bouckaerts is literally growing up in the business, the current management team already has a transition strategy. Ralph Boe, who joined the company in 2001, is currently serving as co-CEO with Karel Vercruyssen, who was named president and COO of Beaulieu America in 2012. When Boe retires in 2014 Vercruyssen will become president and CEO.

The early days

Beaulieu began as the American branch of a large family-owned business in Europe. Roger De Clerck, who in 1959 began Europe’s largest carpet mill, Beaulieu of Belgium, chose his future son-in-law Carl Bouckaert to establish an operation in the U.S.

Bouckaert recalled, “Mieke and I and her parents (the De Clerck’s) came to Dalton in 1977. We looked at a building in Cartersville and then at the Barwick buildings on 5th Avenue in Dalton that were tied up in a bankruptcy. Mr. De Clerck bought the buildings in the fall of 1977 and we all went back to Belgium. The business plan was to eventually have 30 looms in the smaller building, weaving Oriental style rugs in polypropylene fiber, which was already being done in Europe. Phillips Fiber was selling polypropylene yarns to the Beaulieu Group in Europe and they suggested we could do the same in the U.S.,” he said.

Carl returned to Dalton in February 1978 at the same time the first loom arrived. He made another trip to Belgium to marry Mieke in May and then they moved back to make Dalton their home.

The first rugs came off the loom that month and, by the end of the year, Beaulieu was operating seven or eight looms, he said. “Within two years, we had 30 looms and it was a great success story.”

With a degree in engineering from Catholic University of Leuven, in Belgium, Bouckaert had little experience working for Beaulieu but was ready and willing to take on building a new company. “I never thought about it. We were thrown into the carpet industry. We started with weaving and were welcomed warmly in Dalton. We bought our first house on Morton Drive and the house on the left was Mr. and Mrs. Bob Shaw and two houses to the right was Mr. and Mrs. Alan Lorberbaum,” he said.

1980’s first growth surge
The 1980s were a time of rapid growth, starting with the establishment of Beaulieu Canada, a weaving mill in Stratford, Canada, and the startup of Memofil, the first polypropylene extrusion plant in 1981.

“It was the beginning of vertical integration,” Bouckaert recalled, “But it was a struggle. It took about three years to learn how to run it, but eventually we got good at it and then creative.”

When the dollar surged in value under Ronald Reagan’s presidency, competition from less expensive European rugs became a challenge, but with its own polypropylene fiber, “We began making our rugs in pastel colors and contemporary designs,” he said, adding, that with a new look, Beaulieu’s rugs became very popular and took a large market share.

In 1984, the company expanded into tufting with Beaulieu Carpets and Dimension Carpet. Consolidation that was reshaping the carpet industry through merger and acquisition became a strategy, according to Bouckaert. “It became clear that the rest of the industry was also vertically integrating so we started to look at acquisitions that would make sense,” he said.

In 1988, it acquired Conquest Carpet Mills, a large manufacturer of indoor/outdoor carpet, which doubled the size of the company. Also in 1988, it entered a joint venture to create Epsilon, a manufacturer of polypropylene chip in Marcus Hook, Pa., and opened a nylon polymerization plant and a BCF nylon yarn plant in Bridgeport, Ala.e acquisition of Interloom followed in 1989.

1990s rapid expansion

In 1990, “We made a big step into the residential business by buying Coronet Industries, which had U.S. and Canadian operations.That acquisition doubled Beaulieu’s size again,” Carl Bouckaert noted. Suddenly Beaulieu was looking like a major player. But more growth was to follow.

In quick succession, Beaulieu founded Murray Fabrics, a manufacturer of needle punch carpets and wall coverings in 1991, and began Beaulieu Fabrics for primary and secondary carpet backings in Bridgeport, Ala. In 1992, it acquired Grass More, a producer of artificial turf.

Reorganization of acquisitions began in 1993, when D&W Carpet and Rug Company merged with Beaulieu of America. Then United Carpet Mills was created by merging D&W with Murray Fabrics and Grass More.

In 1994, Beaulieu Fibers, a nylon polymerization and extrusion plant opened in Aiken, S.C. and in 1996, Coronet and Beaulieu United were merged into Beaulieu of America. In 1995, Beaulieu expanded outside North America with the acquisition of Sterling Carpet Mills in Australia, which became Beaulieu Australia.

More acquisitions followed in 1997, with Princeton Rugs and American Polycraft and in 1998, with Columbus Carpet Mills and Marglen Industries. “We bought Marglen for polyester recycling to have a presence in heavy, spun polyester carpet,” Bouckaert added.
Peerless Carpet, then the largest Canadian carpet company was also acquired, making Beaulieu Canada the number one mill in Canada.

In 1999, the company bought L.D. Brinkman Company, a manufacturer of carpet and distributor of hard surface flooring.

New Millennium brings challenges

The economy had shifted again, and the Brinkman acquisition was an uneasyfit. “In 2002, we sold the rug operations in the U.S. and Canada to Springs Industries and divested the Aiken nylon plant as well,” Bouckaert noted. “Brinkman didn’t work out for Beaulieu,” he added. “And in 2003, we sold it back in a management-led buyout.”

Selling those assets enabled the company to pay down debt and get back on course. “In 2003, Beaulieu started making a profit again and things were fine for 2004, 2005 and 2006,” Bouckaert said.

But the Great Recession was about to challenge Beaulieu and the entire U.S. economy. Beaulieu was forced to close some operations as did the other major carpet manufacturers and find ways to lower costs while continuing to serve its customers.

“Finally 2012 was better for Beaulieu and 2013 is off to a good start,” Bouckaert said. “Volume is down across the carpet industry, but Beaulieu, with about 4,500 employees, is now the right size for its markets.”

Centered on relationships
When Beaulieu took off nationally, Carl Bouckaert began a practice that he continues today. “One or two days a week, I visit our customers in the field. I will meet a territory or regional manager and ride along with them on their calls. I like to meet our customers face-to-face to find out what is working and what isn’t, and how we can help. I was in New Jersey last week on Friday, then in Naples, Fla. on Monday. the week before, it was Chicago,” he said.

“I am finding more optimism in the field, although I expect a slow recovery,” he added. “People are using carpet longer and are more careful about what they spend their money on. New housing is smaller, but construction is starting to pick up. there are reasons to be optimistic but recovery will be in small steps,” noted Carl.

the Bouckaert brothers are just as serious about carrying on the family business. “It is the responsibility of the Bouckaert family to keep Beaulieu going,” said Stan. “After 35 years in business, I feel like Nic and I joining Beaulieu is a testament to the family’s longterm commitment to the company.”

Nicolas Bouckaert added, “We are in a good position for the present and the future.”

Read the full article at http://bt.e-ditionsbyfry.com/article/Beaulieu+celebrates+35/1417726/161681/article.html.

Mohawk uses four brands to penetrate laminate

Raymond Pina


[Thomasville, N.C.] Since Mohawk Industry’s acquisition of Unilin back in 2005, it’s made strategic moves in both technology and acquisitions that have positioned it as a leader in the laminate market across multiple price points, designs and retail channels.

“We’ve done a lot of things over the years from a positioning, product and merchandising standpoint that has come together successfully. We’ve acquired brands and technologies in stages when they’ve looked promising and it’s the result of always going after what we consider to be real strengths in construction, fashion and positioning,” said Roger Farabee, senior vice president of marketing, Unilin, which oversees Mohawk’s laminate portfolio.

three of the brands — Quick-Step, Mohawk and Columbia Flooring — are firmly planted in specialty retail and with the recent acquisition of Pergo, Mohawk Industries now has a foothold in the home center channel as well. Together, the brands allow the company to come to market with a number of signature product lines offering — everything from foreign flair to exotic species and traditional American wood visuals.

Quick-Step’s Reclaimé White Wash Oak

Mohawk’s first and crucial acquisition in the laminate flooring arena was the $2.62 billion purchase of Belgium-based Unilin in July 2005.the move instantly gave Mohawk control of Quick-Step, the top-selling laminate floor brand at specialty retail; a domestic vertically-integrated manufacturing facility in thomas ville, N.C.; and, a slew of international patents, most notably those protected by the U.S. International Trade Commission (ITC) and used to license mechanical locking systems on a global scale.

Quick-Step is sold exclusively at specialty retail and supplied by the nation’s largest independent flooring distributors such as CMH Space Flooring, Elias Wilf, Herregan, NRF and Ohio Valley.

“Quick-Step has been the leading brand going through distribution ever since Pergo transitioned to home centers. We have great relationships with the best independent floor covering distributors in the country,” said Farabee.

Quick-Step is distinguished as the most fashion-forward of Mohawk’s laminate brands featuring designs like Aged Brandy Oak, Burnished Walnut and To thee Almond Hickory, added Farabee.

“We really focus on Quick-Step as being the fashion leader with a European influence,” he said. “We have some great American looks but the Quick-Step line is more fashion forward and the European influence separates it from the rest of the marketplace. And you won’t see it home centers.”

Mohawk
The Mohawk Collection of laminate flooring is also exclusive to specialty retail but is serviced by Mohawk’s internal distribution network and sales force. What’s more, Mohawk laminate is positioned simply as one option among a wide range of coordinating hard surface and soft surface Mohawk solutions, explained Farabee.

“With Mohawk, we use our own distribution and sales force to provide an alternative to Quick-Step but it really goes beyond any individual category and is part of an overall set of solutions,” he said.

The Mohawk Collection emphasizes popular American hardwood visuals designed to complement Mohawk’s entire product portfolio. “Our goal has always been to have Mohawk and Quick-Step in the same showroom,” he said. “We have worked hard to differentiate the two collections so each one has a fit in a showroom and brings its own value. And for Mohawk that means more mainstream looks for Middle America.”

Columbia Flooring
In 2007, Mohawk Industries acquired the Columbia Flooring Division of Columbia Forest Products for an undisclosed sum giving it control of the popular Columbia Flooring brand in both the wood and laminate floor covering segment.

While Columbia Flooring laminate also targets the specialty retail channel and is serviced through independent distribution like Quick-Step, its emphasis is to act as a more durable, scratch-resistant companion to upscale Columbia exotic hardwoods.

“the Columbia laminate and wood programs grew up in tandem and were developed to work together.the focus for both is exotic looks with deep character and textures,” said Farabee.

Pergo
In January of this year, Mohawk acquired Pergo, one of the most widely recognized brands in flooring with dominant positioning in both Home Depot and Lowe’s, for $150 million.

“It would have been much more complicated to come together 10 years ago when Pergo was very strong in specialty retail. But that brand has evolved so that the overwhelming majority of its business is now with home centers. So we’re going to maintain that position within that channel with our dedicated service,” said Farabee.

Pergo has also provided Mohawk with a catalog of patented laminate surface and mechanical fold-down locking technology. “Pergo has nice style but the emphasis is on performance,” said Farabee. “Pergo has always had superior micro scratch resistance — twice that of other laminate floors. It’s built right into the product so dust and dirt can’t get ground in.”

Read the full article at http://bt.e-ditionsbyfry.com/article/Mohawk+uses+four+brands+to+penetrate+laminate/1417727/161681/article.html.

Shaw Floors

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