Floor Covering Weekly March 10, 2014 : Page 1
Vol. 63 No. 5 A Hearst Business Publication March 10, 2014 $4 3 QEP completes Faus acquisition F LOOR C OVERING W EEKLY The Industry’s Business News & Information Resource FloorFolio creates a brand by offering solutions By Brittany Walsh [Edison, N.J.] Many people look at 2007 to 2008 as the beginning of what came to be known as the Great Recession. Michael Freed-man, however, sees things a little differently. During a time when countless other companies were closing up shop, Freedman started FloorFolio. And while the CEO will jest about what a risk it was to take on the venture during one of the biggest economic downturns, Freedman has grown FloorFolio consistently over the past seven years at a rate now of 65 percent per year. Freedman attributes part of his compa-ny’s success to his team’s ability to view the industry as a whole, a perspective he gained from an early start in the industry — he was 24 — with positions in distribution, then at a flooring contractor and finally in manufacturing. That broad view serves him well as president of his own manufacturing company. “Because I come from a diverse background across the industry, I under-stand the troubles the distributor has and the pains that contracting has. We’re all about meeting niches and meeting needs,” said Freedman. At the core of FloorFolio’s success is its ability to customize any job — approx-imately 50 percent to 60 percent of Floor-Folio’s business is custom work. And with over 200 SKUs, each available in either sheet vinyl or luxury vinyl tile (LVT), the design flexibilities and capabilities are vast. “We have never dropped a product. We’ll continue to refine the line and add colors, but we’ll never drop it. So if a cus-tomer comes to us 10 years from now, we’ll still do it for them,” said Freedman. “And if a customer calls us asking for something Continued on page 19 Michael Freedman Alliance fosters leadership Alliance Flooring, parent of CarpetsPlus Colortile, Carpetland USA Color Tile and Floorco Direct to the Trade retailers, will open its 17th annual convention in San Antonio, Texas this month. FCW asked Ron Dunn and Jon Logue, co-CEOs of Alliance, to provide a preview of this year’s event, what it offers members and how the group is faring post-recession. What challenges are your members facing today and how are you addressing them? Dunn: The challenges our members are facing today include such things as staffing. When is the right time to add the next employee and who should that be? Also how do I best guide, motivate and utilize each person we Ron Dunn and John Logue, Alliance Abbey ‘Connects’ with its members One year ago FCW managing What will the focus of convention be this year? editor Amy Joyce Rush spent a day in Naples, Fla. at Abbey Silverman: Through the use Carpet & Floor headquarters of four initiatives, under the with chairman and CEO Phil umbrella of Abbey Connect, Gutierrez and president and we will be placing emphasis on COO Steve Silverman. At that Customer Connect, Advertising time, Silverman talked about Connect, Member Connect and the transformation the floor cov-Merchandising Connect. Each ering industry was undergoing of these initiatives is designed to as it emerged from the Great Steve Silverman, Abbey more effectively communicate Recession and the company’s with our members, for them to responsibility to guide its members through more effectively communicate with their what he called the most “dramatic evolution” customers and for our members to have which included technology and social media. the right product assortment, emphasizing Now, weeks before this year’s convention in higher margins on their selling floors. We Orlando, Silverman shared with FCW key will offer the only “exclusive for members points being addressed as well as the chal-only” targeted pay-per-click program in the lenges still facing independent retailers today. Continued on page 16 have now? Then there’s technology. What will help me most? What are the must-have’s and the must-do’s? How do I best take some-thing I don’t fully understand nor have time to learn and put it to work for me? How do I take something like social media and turn it from a burden into a creative, effective and fun arm of our marketing? And what about marketing? Does my current plan reflect the personality and strength of my business? Do I have a strategic marketing plan? Continued on page 16 Periodical Commercial Case Studies 4 For breaking news updated each business day, visit us online at www.fcw1.com
FloorFolio creates a brand by offering solutions
<br /> [Edison, N.J.] Many people look at 2007 to 2008 as the beginning of what came to be known as the Great Recession. Michael Freedman, however, sees things a little differently.<br /> <br /> During a time when countless other companies were closing up shop, Freedman started FloorFolio. And while the CEO will jest about what a risk it was to take on the venture during one of the biggest economic downturns, Freedman has grown FloorFolio consistently over the past seven years at a rate now of 65 percent per year.<br /> <br /> Freedman attributes part of his company’s success to his team’s ability to view the industry as a whole, a perspective he gained from an early start in the industry — he was 24 — with positions in distribution, then at a flooring contractor and finally in manufacturing. That broad view serves him well as president of his own manufacturing company. “Because I come from a diverse background across the industry, I understand the troubles the distributor has and the pains that contracting has. We’re all about meeting niches and meeting needs,” said Freedman.<br /> <br /> At the core of FloorFolio’s success is its ability to customize any job — approximately 50 percent to 60 percent of Floor- Folio’s business is custom work. And with over 200 SKUs, each available in either sheet vinyl or luxury vinyl tile (LVT), the design flexibilities and capabilities are vast. <br /> <br /> “We have never dropped a product.We’ll continue to refine the line and add colors, but we’ll never drop it. So if a customer comes to us 10 years from now, we’ll still do it for them,” said Freedman. “And if a customer calls us asking for something specific, I’ve told our customer service that they can never say no,” he said. Not only can a customer call up saying they like a particular visual but want it in some other size or in LVT instead of sheet, FloorFolio will make it happen for them, “and for not a penny more to do so,” he said.<br /> <br /> In fact, Freedman believes that his fair pricing strategy across all of FloorFolio’s products is integral to his company’s success — no small feat for such a highly customizable product line. Each visual, from wood looks to tile looks to the company’s premium Seascapes collection, is priced the same.<br /> <br /> “We like being able to say that we offer premium products at competitive prices,” he said. “We have customers that we ship millions of feet of material to who can do business with a lot bigger companies than we are and they can buy it at a better price than we can sell it for. They do business with us because when they can call us and say, ‘We really need help with a specific order,’ and we’ll find a way to get it done.”<br /> <br /> Partnership support<br /> <br /> Bringing to market a quality product made with pure virgin materials combined with having the right retail partners and the right professional contractors installing the products are what Freedman said has given FloorFolio the ability to work all together to resolve problems. “Because of that we have had zero claims,” he stated.<br /> <br /> And while some of the larger manufacturers take into consideration the feedback of customers, few take the step to actually make it happen on the factory floor. FloorFolio is allotted that flexibility because its business is built around meeting the niches of its customers. “We want to support the people who support us, and we are blessed by the people we design for,” said Freedman. “For example, we do a lot in the student housing sector. We’re doing Princeton right now and just finished Drexel. Our Timber line came about because the designer came to us and said we need a modern rustic visual look. We gave them about 300 different looks for this product, and they chose a light brown rustic. While we were doing that, another customer came in asking for a darker brown rustic and so we made that for them. Then we added some other popular colors and that’s how we built the line, around our customer’s requests.”<br /> <br /> In order to nourish the type of personal customer relationships that FloorFolio bases its business around, the ways in which the company brings products to market needed to adapt. “We have one distributor left,” Freedman explained. “We don’t have true distributors anymore because we learned early on that we are in a segment of the business that is very aggressive so we need to be able to communicate directly with our customers. The reality is we’re not big enough to get the time that we need out of a major distributor.” He added that in dealing directly with its customers, FloorFolio is able to be more flexible and adjust its products in a way that fits the company’s custom business model.<br /> <br /> Request back into sheet<br /> <br /> While the industry has its eyes turned to the influx of LVT, FloorFolio’s customers requested that the company launch new heterogeneous sheet goods. “Our customers needed sheet vinyl, so we did it. There’s a niche that’s not being met for a quality product,” said Freedman. “And honestly, I’m grateful that I did. Because everyone is focusing on the LVT, there seems to be less and less people focusing on sheet, so what better time to pick up what other people are putting down. They’re going right, so we’re going left.”<br /> <br /> Along with its decision to widen its focus back onto sheet, as well as LVT, was FloorFolio’s decision to go “all in.” In the past, FloorFolio had partnerships with those who would dictate how the product would be made. Although the company had influence over those decisions, the whole process is now 100 percent controlled by FloorFolio. “Now, we create the designs, we own the rollers to create the patterns and textures, we own it all. So when this product goes down the production line in our partner facility in China, from top to bottom it’s ours,” he said.<br /> <br /> Freedman explained that while the company is not “recreating the wheel” with its new introductions, it is bringing a higher quality level than the typical heterogeneous sheet product. One issue FloorFolio wanted to address with its new line was sheet vinyl’s susceptibility to showing subfloor irregularities. “For Nature’s Way sheet vinyl, we introduced a medium texture, something that can’t trap a lot of dirt and something that will reduce maintenance. We’ve worked with a lot of our customers and they felt that if we made it a little bit thicker than normal sheet that it would hide some of the subfloor irregularities, so we did,” said Freedman, adding that the new line would be available in 2.2mm instead of the typical 2mm.<br /> <br /> Transition and expansion<br /> <br /> As FloorFolio continues to experience consistent growth and its product lines continue to expand, Freedman said that space was becoming an issue, but that the need for expansion was a problem he was happy to have.<br /> <br /> The company has now expanded to a warehouse in Texas and has recently announced plans to expand its headquarters in Edison, N.J. “We do a lot of our business in Texas, and the freight costs are going to continue to climb. We just finally got to the point where we needed to be able to supply on a more local basis. We built the facility and it’s my goal that five years from now that building will be an exact duplicate of our headquarters,” he said.<br /> <br /> With the growth of FloorFolio, Freedman has worn numerous hats, acting not only as the president/ CEO but also as the principal designer, customer service rep, sales rep and still has his hands in all parts of his business. But, he said, one of the major tasks he took on this year was dealing with his own transition.<br /> <br /> “Now the company is not just me anymore, and as much as it pains me, I’m proud to say I’ve become more of a president and the success of my company is really the people around me,” Freedman said. “I have personal relationships with some of the largest flooring contractors, but now they need to be handled by the right people that can handle them. So if you asked me what was the hardest thing I had to deal with this year, that would be it.” He added that FloorFolio has now become a brand, and the whole vision and direction the company has taken goes into driving that brand.
Alliance fosters leadership
Alliance Flooring, parent of CarpetsPlus Colortile, Carpetland USA Color Tile and Floorco Direct to the Trade retailers, will open its 17th annual convention in San Antonio, Texas this month.<br /> <br /> FCW asked Ron Dunn and Jon Logue, co-CEOs of Alliance, to provide a preview of this year’s event, what it offers members and how the group is faring post-recession.<br /> <br /> What challenges are your members facing today and how are you addressing them? Dunn: The challenges our members are facing today include such things as staffing. When is the right time to add the next employee and who should that be? Also how do I best guide, motivate and utilize each person we have now? Then there’s technology. What will help me most? What are the must-have’s and the must-do’s? How do I best take something I don’t fully understand nor have time to learn and put it to work for me? How do I take something like social media and turn it from a burden into a creative, effective and fun arm of our marketing? And what about marketing? Does my current plan reflect the personality and strength of my business? Do I have a strategic marketing plan?<br /> <br /> Logue: Growth in soft carpet, LVT, LVP and new hard surface visuals are the name of the game in retail today for our members along with insuring that they continue to have great values. What are the best of the new products and do they have the correct assortment on their floors to take advantage of these trends without it being cost prohibitive? We addressed these issues last year and will continue to do so this year at our convention, summits and weekly updates. Our group has led the industry in soft carpet sales increases as well as hard surface category growth in 2013.<br /> <br /> What is the focus of this year’s convention?<br /> Dunn: This year we are focusing around five things: effective leadership; utilizing technology; maximizing social media; employing a well-rounded marketing strategy; and, integrating new product offerings. Our members will leave reminded of key characteristics for strong leadership and will be encouraged to accelerate their leadership through practical applications.<br /> <br /> Our exclusive WebPro offering is in a perpetual state of updates and improvements as technology expands and search engine requirements change. Our members will be updated on some remarkable additions to their websites as well as gain fresh ideas and proven ways for using social media to creatively increase their exposure, draw new customers, enhance relationships and build loyalty.<br /> <br /> We are also launching MediaPro, which provides a comprehensive, economic and easy-to-customize marketing plan for every month of the year. As always, our buyers have been reviewing new introductions, new suppliers and diversified product offerings and have narrowed the best of the best into our 2014 recommendations.<br /> <br /> Members will be given a Market Book, which summarizes all of this including the great buys that have been negotiated.<br /> <br /> What are the differences between this year and last for you and for your members?<br /> Logue: We are starting this year coming off a great growth year for us in 2013. The sustained growth by our members and the confidence that it will continue is evident and has shifted the focus on steps to maximize that growth. The focus is on growing and maximizing their business at all levels and segments. We are doing this with a comprehensive and integrated merchandising, marketing, advertising, networking and social media strategy. This will allow our members to be prepared for growth in all segments of the industry.<br /> <br /> How has your organization changed during the last few years?<br /> Dunn: One of the things we have said from the beginning is that if you like us now you will like us even more in six months because we are constantly evolving. The logic is fairly simple. Is an independent store owner better off on their own or connected to a team of people that wake up everyday developing added benefits and options to help reduce costs, increase effectiveness and grow sales?<br /> <br /> It is kind of like the Verizon commercial that depicts a crowd of supporters walking behind one of their users. That is what we do and the key, we believe, is to do that without ever mandating. The choice always remains with our member so the harness is on us to bring added value. What this has looked like over the past few years has been wider, deeper and broader than I would have predicted.<br /> <br /> It also involves every aspect of successfully running a retail store today from leadership to marketing and sales to technology to product diversification to customer service… and the ability to network with other stores from around the country regarding any challenge or opportunity you may be facing. That was always a cornerstone for us and in the last several years we have gotten even better at it. I can say with confidence that as a whole, no one networks as well as our group does today.
Read the full article at http://bt.e-ditionsbyfry.com/article/Alliance+fosters+leadership/1653720/200274/article.html.
Abbey ‘Connects’ with its members
<br /> One year ago FCW managing editor Amy Joyce Rush spent a day in Naples, Fla. at Abbey Carpet & Floor headquarters with chairman and CEO Phil Gutierrez and president and COO Steve Silverman. At that time, Silverman talked about the transformation the floor covering industry was undergoing as it emerged from the Great Recession and the company’s responsibility to guide its members through what he called the most “dramatic evolution” which included technology and social media. Now, weeks before this year’s convention in Orlando, Silverman shared with FCW key points being addressed as well as the challenges still facing independent retailers today.<br /> <br /> What will the focus of convention be this year?<br /> Silverman: Through the use of four initiatives, under the umbrella of Abbey Connect, we will be placing emphasis on Customer Connect, Advertising Connect, Member Connect and Merchandising Connect. Each of these initiatives is designed to more effectively communicate with our members, for them to more effectively communicate with their customers and for our members to have the right product assortment, emphasizing higher margins on their selling floors. We will offer the only “exclusive for members only” targeted pay-per-click program in the flooring industry. Each member’s success will be measured monthly and reported to them, so they will know in which markets around their stores to deploy assets.<br /> <br /> Further, with the help of our in-house advertising agency, we will continue giving members custom production of all advertising, including as many customizable pages on the Abbey consumer web site as they would like. We are also assigning a specific, experienced person-to-person member services representative to assist members with daily issues that may confront them.<br /> <br /> What challenges are your members facing today?<br /> Silverman: Flooring retailers today are facing different challenges than in the past. First, the “box” retailers have gained market share as the result of the loss of 25 percent to 30 percent of the dealers closing their doors since the beginning of the Great Recession. On the other hand, they (big boxes) added about 25 percent more stores collectively. The net effect from a competitive standpoint is no different today than in the past. The independent is a hands-on, owner operator, with well trained professional sales associates, more flexible advertising and better service. Competing for the same customer, I believe the independent retailer will get the sale the vast majority of the time. Further, the boxes still sell primarily low to mid-range hard surface products and do a large percentage of their business in the DIY market.<br /> <br /> However, I believe the biggest challenge facing flooring retailers today is technology. We are dealing with a consumer who studies the web (laptop, tablet, smartphone, etc.) well before they go into a retail store to purchase big ticket items. Consequently, if the flooring retailer is not equipped to communicate with an up-to-date, well done, interactive website, they will not be able to effectively compete.<br /> <br /> What are the differences between this year and last year for you and for your members?<br /> Silverman: We have emerged from the downturn a stronger company with a more effective group of members and 2013 was a good year. In spite of severe weather conditions in many parts of the country during January and February, our members are attending convention in record numbers with great enthusiasm. They know they are the “survivors” and are looking for new products to freshen their selling floors and new ways to attract the consumer. They will find that in Orlando during Convention. I believe 2014 will be a very good year!