Floor Covering Weekly February 24, 2014 : Page 1

Vol. 63 No. 4 A Hearst Business Publication February 24, 2014 $4 4 F LOOR C OVERING W EEKLY The Industry’s Business News & Information Resource Doubles warranties Coordinated design effort strengthens Shaw By Janet Herlihy [Dalton] Back in 2006, the Shaw Res-idential Design Center here gathered all categories of Shaw flooring under one roof. The strategy, said Pete Sigmon, vice presi-dent of innovation at Shaw Industries, has proven to be a good one. “Having hard and soft surface together allows us to design better, to ‘get it’ even more,” he said. In addition to the design studios for all residential flooring, a full service sample lab is also located at the Design Center, where residential carpet and synthetic turf are developed and tested for performance. Having the Shaw Design team respon-sible for the styling of both hard and soft surfaces works to the company’s advan-tage, according to Emily Morrow, director of color, style and design at Shaw Floors. She said that it helps keep all Shaw prod-ucts cohesive and on trend. Armstrong CEO’s mandate: Growth, innovation, branding By Amy Joyce Rush [Las Vegas] While Tom Mangas, newly named CEO of Armstrong’s global flooring business, may have been new to Surfaces last month as a first time attendee, he is certainly not new to the consumer products arena and what it takes to drive product sales. Before joining Armstrong as CFO in 2010, Mangas spent 20 years at Procter & Gamble in different posts throughout the company, including the $17 billion fabric care business (with brands like Tide, Downy and Cheer) and then the $28 billion beauty and grooming business that houses some of the company’s more visible brands like Gil-lette as well as a roster of prestige fragrances and skin care. “There are a lot of similarities in how P&G went to market and how we go to market through distribution. The business model of manufacturing consumer products is very similar — fundamentally you’re driving innovation through new products, and figuring out distribution and packaging and shipping,” explained Mangas. As CFO of Armstrong, Mangas said he took a more operational view. “I never was a CPA. Armstrong wanted someone to drive global busi-ness and expansion.” Having been CFO for four years, Mangas brings intimate Tom Mangas knowledge of the company but is new enough to certain aspects to be able to ask questions and offer a new perspective. “I benefit from the historical perspective but being the new guy, I can play dumb a bit and ask questions — why do we do it this way? Stir the pot a bit. That’s how I see my job — leveraging the strength of the team but question. I’m going to ask a lot of questions and figure out how we can accelerate the growth,” explained Mangas. Here at Surfaces he told FCW that he is in “receive mode” paying close attention to what is working for Armstrong cus-tomers and what isn’t as well as assessing the competition. After spending his first month on the job getting entrenched in the North Amer-ican business, then hitting the road for two weeks to China, India and throughout Europe to gain a global view of the business, he said Surfaces was well timed for getting him re-immersed in the North American market and begin thinking about how to execute the plan Armstrong has for future growth. Mangas said that everything he’s learned Continued on page 23 Continued on page 23 Tarkett’s values bring cohesion to acquisitions By Amy Joyce Rush [Las Vegas] Tarkett has grown dramatically over the past five years through a series of acquisitions, each with its unique strengths and cultures. Today, Jeff Fenwick, president and COO of Tarkett North America, is work-ing to leverage those strengths while instilling in each the company’s core values. “We have a wide diversity of cultures in our business,” said Fenwick who has been with the company for a little over a year now. “All of these businesses were small entrepre-neurial businesses to one extent or another. We are going to embrace diversity and cultures but we are going to demand the same values. People have to value the customer first and foremost in everything they do,” he said. Here at home, the Tarkett family includes Tarkett, John-sonite, Centiva (purchased in November of 2010) and the recent acquisition of soft sur-Jeff Fenwick face company Tandus (in Sep-tember of 2012) and gives the company the ability to offer the A & D community hard and soft surface synergies. Fenwick said that while Tarkett will keep the entrepreneurial spirit alive in the new acquisitions, they will all adhere to the com-pany’s overall strategy of profitable growth. “We want to grow organically beyond what the economy is doing and we have to execute. Our strategies have been in place for a while — every month, every week, every day it’s execute, execute, execute. And making sure we are adding value to the cus-tomer,” he said. Everything Tarkett does is centered on adding value to those it serves and is tied to its core principles of quality, reli-ability and safety, he said. The company’s iSelect (launched some 19 months ago) and Balanced Choice are perfect examples of the company’s philosophy of offering the customer — be it an architect or designer or a residential consumer — a choice of design first and then make it available across product platforms to meet different installation needs. “We have a strategy that centers around growth and that’s tied directly to the investments we make related to iSelect on the residential side and Balanced Choice on the commercial side,” explained Fenwick. “We have strategies around operational excellence [as well].” Those strate-gies include a focus on world class manufactur-Pete Sigmon and Emily Morrow Periodical For breaking news updated each business day, visit us online at www.fcw1.com Continued on page 23

Coordinated design effort strengthens Shaw

Janet Herlihy


[Dalton] Back in 2006, the Shaw Residential Design Center here gathered all categories of Shaw flooring under one roof. The strategy, said Pete Sigmon, vice president of innovation at Shaw Industries, has proven to be a good one. “Having hard and soft surface together allows us to design better, to ‘get it’ even more,” he said.

In addition to the design studios for all residential flooring, a full service sample lab is also located at the Design Center, where residential carpet and synthetic turf are developed and tested for performance.

Having the Shaw Design team responsible for the styling of both hard and soft surfaces works to the company’s advantage, according to Emily Morrow, director of color, style and design at Shaw Floors. She said that it helps keep all Shaw products cohesive and on trend.

“It assures that our carpet color lines are more compatible with the hard surface colors as well as making certain our hard surface introductions include the latest in interior design trends,” said Morrow. “Our team’s combined and shared knowledge also helps to keep our sales and marketing teams informed of the mega-trends.”

The process of developing the right flooring product in carpet, hardwood, laminate, luxury vinyl tile (LVT) and ceramic includes input from many sources, she said. “Shaw dedicates a great deal of effort to stay ahead of the fashion curve in flooring. A lot of floor fashion seems to start in Europe, so we attend trade shows, including Domotex in Hannover and IMM, (The International Furnishings Show) in Cologne. The prevailing theme recently has been celebrating the natural look of materials in wood and even carpet,” she said.

Fashion today is a result of natural inspiration translated through modern technology. Morrow explained that designers are using a new method, “Sometimes called ‘renais science,’ a new way of looking at things on a molecular level — a return to simpler things — a reaction to overly technological factors and the bombardment of messages we all receive every day,” she said. That notion motivated Shaw to look to natural materials such as undyed wools and grasses for inspiration for carpet colors.

Shaw’s design team also studies home interiors magazines and watches for the latest trends in textiles as seen in furniture upholstery, window treatments and runway fashion. “And we are constantly looking at how carpet and hard surface flooring work together,” Morrow stressed.

Morrow added that the Shaw Design Council, made up of savvy dealers with a good designer sensibility, helps Shaw design residential flooring that will appeal to consumers.

Shaw has also created an assortment of short videos that can be seen on YouTube that explain trends in flooring from to carpet to hardwood and laminate.

“People are migrating to a flooring surface that makes the most sense for the room. Upstairs and family rooms are mostly carpet. Carpet in bedrooms makes sense because it is soft and warm. Entryways and public areas may work best with hard surface floors,” Sigmon said. Shaw, he added, has the right product with the right styling for every consumer.

Read the full article at http://bt.e-ditionsbyfry.com/article/Coordinated+design+effort+strengthens+Shaw/1638664/197984/article.html.

Armstrong CEO’s mandate: Growth, innovation, branding

Amy Joyce Rush


[Las Vegas] While Tom Mangas, newly named CEO of Armstrong’s global flooring business, may have been new to Surfaces last month as a first time attendee, he is certainly not new to the consumer products arena and what it takes to drive product sales.

Before joining Armstrong as CFO in 2010, Mangas spent 20 years at Procter & Gamble in different posts throughout the company, including the $17 billion fabric care business (with brands like Tide, Downy and Cheer) and then the $28 billion beauty and grooming business that houses some of the company’s more visible brands like Gillette as well as a roster of prestige fragrances and skin care.

“There are a lot of similarities in how P&G went to market and how we go to market through distribution. The business model of manufacturing consumer products is very similar — fundamentally you’re driving innovation through new products, and figuring out distribution and packaging and shipping,” explained Mangas.

As CFO of Armstrong, Mangas said he took a more operational view. “I never was a CPA. Armstrong wanted someone to drive global business and expansion.”

Having been CFO for four years, Mangas brings intimate knowledge of the company but is new enough to certain aspects to be able to ask questions and offer a new perspective.

“I benefit from the historical perspective but being the new guy, I can play dumb a bit and ask questions — why do we do it this way? Stir the pot a bit. That’s how I see my job — leveraging the strength of the team but question. I’m going to ask a lot of questions and figure out how we can accelerate the growth,” explained Mangas.

Here at Surfaces he told FCW that he is in “receive mode” paying close attention to what is working for Armstrong customers and what isn’t as well as assessing the competition.

After spending his first month on the job getting entrenched in the North American business, then hitting the road for two weeks to China, India and throughout Europe to gain a global view of the business, he said Surfaces was well timed for getting him re-immersed in the North American market and begin thinking about how to execute the plan Armstrong has for future growth.

Mangas said that everything he’s learned thus far, confirms his view from his previous position. “It’s been fabulous,” he noted. “I’ve started to put together some of my thoughts on what works and what doesn’t work. Number one, people love the Armstrong brand and the innovation. We show a different level of innovation and I think it is differentiating us from others. It’s the value of the Armstrong relationship and how we drive quality. And service.”

Armstrong innovation
The word innovation came up a lot during our time with Mangas. It is something core to the strong past performance of Armstrong and will be a key element moving forward as well.

“I think we are stacking up very strong in innovation — our innovation across the line whether it’s in sheet vinyl, which has been a sleeping category, or our Alterna products or our wood product or the laminate products that are award-winning. Our team has done a great job driving that.”

North America is an important revenue stream for Armstrong — some 70 percent of company sales. In North America, said Mangas, “That’s where innovation happens.”

Armstrong left Surfaces several years ago when the venue changed. They’ve been back now three or four years but in a suite off the main show floor. “I like the way we are able to drive a very consistent customer presentation and environment here; we can engage our customers here. The showroom gives us great presence and functionality with our customers,” Mangas said.

Roadmap for success
Mangas came into the CEO position with a clear set of goals and mandates. All focus on the long term value for shareholders and the customer. “That’s the overall mandate. So we have a series of short term and long term steps that form the mosaic of that,” he said.

An important piece of the puzzle is getting the wood business back on track — a challenge for every company that plays in this segment. “Our most pressing issue is driving and restoring the attractiveness of our wood business. If you look at our margins last year, they collapsed. That was driven by a perfect storm of dramatically accelerating commodity pricing, a surge in demand in ours and other industries that caught us somewhat unprepared in the supply chain, and in a competitive environment. So getting that business structurally attractive, getting pricing — that’s short term priority one,” said Mangas.

Armstrong has made some significant investments over the past few years. Mangas is ready to leverage those. About $115 million was invested in two plants in China set to serve the Asian market. “We want to reap the benefits of our significant investment in emerging markets,” he said.

To do that, Mangas said they will look to drive commercialization of the plants and expand distribution and sales to “pull the product through,” he said. “The reality and focus of 2014 and beyond is to commercialize those plants. We see huge opportunity for resilient flooring in China and India, South East Asia and the Middle East.” In those regions, the focus will be on commercial product, not residential business.

Mangas said that things look good enough that folks weren’t even talking economics here in Vegas. “We had a good year, even through third quarter. Our problem was supply chain and cost,” he said adding, “We are not going from a point of weakness and trying to recover. We are coming from strength and trying to capitalize on it.”

While his responsibilities have changed and increased, Mangas said, “The levers I would talk about as CFO aren’t that different. The difference is who I’m talking to. The accountability is awesome. I take a sincere responsibility. How do I drive long term valuation — that is top line growth and working with our customers.”

He said the company has a clear path and that now it is a matter of making sure everyone interprets it the same way. “How do we make sure we are aligned on the strategy and cascade that through the organization? It’s about clarity and alignment of strategy. Between Armstrong CEO Matt (Espe), Armstrong Residential Flooring senior vice president Kevin (Biedermann), Armstrong Commercial Flooring senior vice president Dominic (Rice) and myself, we are very well aligned.”

Read the full article at http://bt.e-ditionsbyfry.com/article/Armstrong+CEO%E2%80%99s+mandate%3A+Growth%2C+innovation%2C+branding/1638665/197984/article.html.

Tarkett’s values bring cohesion to acquisitions

Amy Joyce Rush


[Las Vegas] Tarkett has grown dramatically over the past five years through a series of acquisitions, each with its unique strengths and cultures. Today, Jeff Fenwick, president and COO of Tarkett North America, is working to leverage those strengths while instilling in each the company’s core values.

“We have a wide diversity of cultures in our business,” said Fenwick who has been with the company for a little over a year now. “All of these businesses were small entrepreneurial businesses to one extent or another. We are going to embrace diversity and cultures but we are going to demand the same values. People have to value the customer first and foremost in everything they do,” he said.

Here at home, the Tarkett family includes Tarkett, Johnsonite, Centiva (purchased in November of 2010) and the recent acquisition of soft surface company Tandus (in September of 2012) and gives the company the ability to offer the A & D community hard and soft surface synergies.

Fenwick said that while Tarkett will keep the entrepreneurial spirit alive in the new acquisitions, they will all adhere to the company’s overall strategy of profitable growth. “We want to grow organically beyond what the economy is doing and we have to execute. Our strategies have been in place for a while — every month, every week, every day it’s execute, execute, execute. And making sure we are adding value to the customer,” he said.

Everything Tarkett does is centered on adding value to those it serves and is tied to its core principles of quality, reliability and safety, he said. The company’s iSelect (launched some 19 months ago) and Balanced Choice are perfect examples of the company’s philosophy of offering the customer — be it an architect or designer or a residential consumer — a choice of design first and then make it available across product platforms to meet different installation needs.

“We have a strategy that centers around growth and that’s tied directly to the investments we make related to iSelect on the residential side and Balanced Choice on the commercial side,” explained Fenwick. “We have strategies around operational excellence [as well].” Those strategies include a focus on world class manufacturing, high service level expectations and safety.

While the language may be different for residential than it is for commercial, the messaging is aligned with the company’s core principles.

“The messaging around the commercial side is called Balanced Choice — the interior design community, architectural community clearly understands what it is to be able to match from room to room regardless of the product. On the residential side, the language has to be different but the concept is the same. It’s about enabling the consumer to make a choice, give them back the power to make the choice based upon their design needs, or durability needs or other things like allergy and asthma certification,” Fenwick explained. “We try to listen to what’s important to that consumer — the commercial consumer or the residential consumer.”

Guided by five pillars
The glue that keeps all of the Tarkett-owned companies together is its five pillars. Here at Surfaces, they were visualized front and center in a big way — a large handbag, for example, stood for Accessories.

Explained Jeff Krejsa, vice president marketing, Tarkett, “We have five pillars to our business that are core to everything we do commercially and residentially.”

Coordination is the first pillar. That comes to life in the iSelect program and is a mandate that all products — be it Fiber floor, LVT or laminate — “speak to each other,” Krejsa said. “That system is something easy to navigate.”

Continuity is next and Krejsa said that this is about starting with design first: “Everybody’s made that difficult. (With Specifi) you find the design you want and then find construction that is right for you,” he said.

Next comes personalization: “All of us expect more personalization and customization. A consumer can go to our website and we have a group of designers that will help them.”

Fourth is accessories. Explained Krejsa, “Accessories, from a commercial side, is the air that we breathe.” On consumer side, the idea is for independent dealers to capture consumers by offering a great experience and solutions that add value and help consumers “finish that space.”

Fifth is sustainability and something that has been part of the company’s DNA. Its commercial and residential products are even Allergy & Asthma certified in North America — they are the only flooring company here, to their knowledge, with that certification. The certification requires stringent testing and was born of the company’s larger sustainability focus — one effort across all products was to lower emissions from all its products to non-detectable levels as well as eliminating the use of phthalates in all its vinyl products.

Even with a strong set of values and a clear purpose, challenges continue to exist. Noted Fenwick, “How do we encourage people to be entrepreneurial and enable them to make decisions and to move quicker than everybody else? Because, in the end, speed is what’s going to win. And how do we force collaboration? I really believe that the currency of the new economy is innovation and what drives innovation is creativity and collaboration and you can’t have one without the other. How you communicate with each other — even our office environment the way it is — has to support collaboration.”

Read the full article at http://bt.e-ditionsbyfry.com/article/Tarkett%E2%80%99s+values+bring+cohesion+to+acquisitions/1638666/197984/article.html.

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