Floor Covering Weekly September 29, 2014 : Page 1

Vol. 63 No. 18 A Hearst Business Publication September 29, 2014 $4 F LOOR C OVERING W EEKLY The Industry’s Business News & Information Resource NFA gets ready for Maui meeting 3 COREtec Plus sales surge By Mallory Cruise [Dalton] Eighteen months after its launch in January 2013, USFloors’ innovative COREtec Plus line of waterproof LVT has proven itself in the field — even standing up to Superstorm Sandy — and is now experiencing sales growth and demand on the retail floor. COREtec Plus features a wood plastic compos-Piet Dossche ite (WPC) sand-wiched between an LVT wearlayer and a cork backing, and features the Unillin locking system. According to USFloors’ president and CEO, Piet Dossche, CORE-tec Plus and COREtec Plus XL are making inroads in both the LVT and laminate cat-egories while being embraced by retailers and consumers alike. Developed over a two year period, the company filed a patent for COREtec Plus in October 2012. Since then, said Dossche, the company has filed for a worldwide patent. USFloors soft launched COREtec Plus in November of 2012 with 8 SKUs in a 5 ” X 48 ” X 8 mm construction. According to USFLoors, COREtec Plus was the first engineered luxury vinyl plank incorporating a WPC core. In 2013, the company launched COREtec Plus which included an expanded product offer-ing of 20 SKUs, as well as a 7 ” wide plank format and 12 ” X 24 ” tile format. In January 2014, USFloors expanded COREtec Plus to New Armstrong CEO sets course for change Maier targets execution, structure, company development By Mallory Cruise [Lancaster, Pa.] Last month, Armstrong named Don Maier the new EVP, CEO of Armstrong Flooring Products replacing Tom Mangas effective Sept. 26. Just days before he took helm of the $1.5 billion division, Maier spoke with FCW outlining his aggressive plan for the company, which includes changing the company’s culture from being internally focused to more exter-nally focused and strategy execution. At the same time, he said, he will spend the next six to nine months “to connect, listen and learn from our customers and hopefully be able to translate what I learn back into our organization. I think it’s an important piece of our business strategy. It’s that type of customer focus that has made this 150 plus year company a success. We have a huge obli-gation towards the Armstrong founder’s intent for the com-pany, and to bring it back to life in a meaningful way.” Maier comes to the posi-tion with some 21 years of Don Maier professional experience that included time spent on the operations side of Armstrong’s business. He most recently served as senior vice president, global operations excellence. “I’m excited for this new position,” he said, adding that over the past nine months he has also had the opportu-nity to be an integral part of Mangas’ extended staff, help-ing him and his team develop Armstrong’s long term strat-egy. And, while he noted that structural changes do tend to Continued on page 14 High-end product, investments drive Dixie’s growth By Janet Herlihy [Dalton ] Acquisitions, new and wide selec-tion of product and its high-end positioning drove growth at The Dixie Group (TDG) for the last decade allowing it to recover and thrive sooner than perhaps other carpet firms. “We recovered more quickly because we were positioned at the higher end and, even during the worst of the downturn, we were investing in new products,” Daniel K. Frierson, chairman and CEO told FCW . “Retailers want more choices and we do a good job of offering retailers more. On the commercial side, we also offer more options to specifiers.” Dixie also maintains signif-icant inventory so that it can deliver what its dealers need quickly. With a history that began in 1920, TDG continues to grow and thrive through its ability to evolve to suit changes in environment. Made up of Dixie Home, Masland Residential, Fabrica and Masland Contract, TDG’s carpet sales grew 68 percent from 2009 through 2013, as reported in last year’s annual report. Residential carpet sales were up 88 percent, while commercial sales grew 28 percent. The growth was driven by extensive investment in “product, processes Continued on page 19 Continued on page 10 Kennedy Frierson and Dan Frierson Periodical Mike Zoellner & Mohawk U keep education relevant 4 For breaking news updated each business day, visit us online at www.fcw1.com

COREtec Plus sales surge

Mallory Cruise


Eighteen months after its launch in January 2013, USFloors’ innovative COREtec Plus line of waterproof LVT has proven itself in the field — even standing up to Superstorm Sandy — and is now experiencing sales growth and demand on the retail floor.

COREtec Plus features a wood plastic composite (WPC) sandwiched between an LVT wearlayer and a cork backing, and features the Unillin locking system. According to USFloors’ president and CEO, Piet Dossche, COREtec Plus and COREtec Plus XL are making inroads in both the LVT and laminate categories while being embraced by retailers and consumers alike.

Developed over a two year period, the company filed a patent for COREtec Plus in October 2012. Since then, said Dossche, the company has filed for a worldwide patent.

USFloors soft launched COREtec Plus in November of 2012 with 8 SKUs in a 5” X 48”X 8 mm construction. According to USFLoors, COREtec Plus was the first engineered luxury vinyl plank incorporating a WPC core. In 2013, the company launched COREtec Plus which included an expanded product offering of 20 SKUs, as well as a 7” wide plank format and 12” X 24” tile format. In January 2014, USFloors expanded COREtec Plus to 35 SKUs and also introduced COREtec Plus XL in a 9” x 72” x 8.1 mm plank format. COREtec Plus and COREtec Plus XL products now total 50 SKUs.

COREtec Plus is a retail hit
Part of COREtec Plus’s appeal, according to retailers, is that it is waterproof, has the texture and visual of hardwood but offers easy installation and maintenance similar to laminate.

Retailers have also noted its price points are a big draw for consumers. COREtec Plus retails from $3.99 to $4.29 per sq. foot, and COREtec Plus XL retails from $4.99 to $5.39 per sq. foot.

Ed Mallan, sales manager at Carpet Plus in Charlottesville, Va., told FCW that COREtec Plus’s waterproof warranty is outstanding.

“I’ve been in the flooring business for 25 years and I’ve never had a product that is waterproof so I’m very excited about COREtec Plus. And when I pass that information onto my customers they say ‘Wow.’ I can’t tell you how many customers have come in with water damage or bad experiences with floors absorbing moisture. It would be nice if the rest of the flooring industry had the same technology for core boards. But it is exciting to see what might be in the near future,” he said. “I’m installing at least one job a week with COREtec Plus.”

Kenny Peak of Abbey of Port St. Joe in Port St. Joe, Fla., said COREtec Plus’s ability to mitigate moisture issues is a big draw for his customers in moisture-prone Florida.

“We got on board when it first came out and I have been sold on it since day one. Last year it was my number one product, as well as the first eight months of this year,” he said. “Where we’re located on the coast we have a lot of moisture issues and humidity, and while people love hardwood floors, moisture makes them buckle. COREtec Plus will not expand and it’s a good product for our area. It’s leading the pack again over hardwood and ceramic tile. And USFloors is a good company. They stand behind it.”

Mallan of Carpet Plus added, COREtec Plus’s rustic and sawn visuals are unique and do appeal to consumers who are looking to install it in more casual environments like living rooms and family rooms. “There aren’t many other companies that offer those same types of visuals. I’m excited to see their expanded visual offering,” he said.

Joe Bair of Lindenhurst, New York-based Long Island Paneling said COREtec Plus’s construction, and waterproof capabilities, is a big driver for sales in his territory as well.

“The popularity of vinyl is it’s natural, it’s waterproof, and it’s easy to install and maintain. COREtec Plus is more rigid and solid than regular vinyl — it doesn’t have to be glued down,” he said.

According to Sam Roberts of Roberts Carpet & Fine Floors, Houston, Texas, all of his stores are doing very well with COREtec Plus.

“Like all of the best vinyl plank products, COREtec Plus planks look far more like real hardwood than the vinyl planks of the past. It is an attractive product and comes in a wide variety of good colors. I don't mean to be simplistic or superficial — the visuals matter,” he said.

He said the principal differentiator with COREtec Plus is the thickness of the core and the cork-attached backing.

“The thickness of the waterproof core allows ample depth for the locking system to be very easy to put together and stay together. The rigidity created by the thickness also helps hide a multitude of potential subfloor issues. We still float every floor to the manufacturer’s specification,” he said. “We haven't had our first claim on the product line and our customers have been very pleased with the finished product in their homes.”

The longer length planks or COREtec Plus XL, which launched earlier this year, is also a draw. Roberts noted, “The wider width, longer length planks emulate the larger planks that make up a big part of our ‘better goods’ hardwood business.”

Mallan at Carpet Plus said he has only had COREtec Plus XL for a month and has already completed a job with the new product. “The bigger, longer panels are of interest to certain niche customers. Some like the big board look but I’ve been moving a lot of the original COREtec Plus. Once I see a customer moving towards the COREtec Plus display I explain the bells and whistles of the product and it’s a cinch to close the sale,” he said.

COREtec Plus leads the way
Dossche said he recognizes that in order for COREtec Plus to achieve its full potential in the market as a standalone flooring product category, other players need to contribute to the category’s development and sales.

“I welcome other manufacturers to come out with their own collection of LVT on WPC, based on the COREtec Plus technology. The category needs quality manufacturers with a sound marketing and sales strategy who can sell the product based on its superior features and benefits, and protect this new product from the rapid commoditization that laminate flooring experienced,” he said.

And while he encourages innovation and creativity from other suppliers, Dossche said he will also defend the patent.

“Innovation and intellectual property need to be recognized and respected,” Dossche said. “When our patent is granted, we will defend our IP while at the same time working with other manufacturers, distributors and retailer importers to find an economically acceptable solution to allow for this category to expand and establish itself in the market.”

He also warns, “By selling WPC products outside the sphere of COREtec Plus technology, importers, distributors and the retailers who sell these items could find themselves liable for damages as a result of patent infringement, once the patent is issued.”

Read the full article at http://bt.e-ditionsbyfry.com/article/COREtec+Plus+sales+surge/1819360/226668/article.html.

New Armstrong CEO sets course for change

Mallory Cruise


Maier targets execution, structure, company development

Last month, Armstrong named Don Maier the new EVP, CEO of Armstrong Flooring Products replacing Tom Mangas effective Sept. 26. Just days before he took helm of the $1.5 billion division, Maier spoke with FCW outlining his aggressive plan for the company, which includes changing the company’s culture from being internally focused to more externally focused and strategy execution.

At the same time, he said, he will spend the next six to nine months “to connect, listen and learn from our customers and hopefully be able to translate what I learn back into our organization. I think it’s an important piece of our business strategy. It’s that type of customer focus that has made this 150 plus year company a success. We have a huge obligation towards the Armstrong founder’s intent for the company, and to bring it back to life in a meaningful way.”

Maier comes to the position with some 21 years of professional experience that included time spent on the operations side of Armstrong’s business. He most recently served as senior vice president, global operations excellence.

“I’m excited for this new position,” he said, adding that over the past nine months he has also had the opportunity to be an integral part of Mangas’ extended staff, helping him and his team develop Armstrong’s long term strategy. And, while he noted that structural changes do tend to bring on speculation, there are a few things initiated by Mangas that will not change.

“We’ve reviewed our long term strategic plan with our board of directors at our last board meeting in July, and have concurrence around that strategy so none of that will change,” he said, adding that what will change as he takes the helm is how the company will execute its long term strategy.

Maier noted that as CEO, there are three ideas, specifically, he will keep top of mind.

“Number one: That I reflect on Armstrong. I think we’re too internally focused and I want to flip that 180 degrees, and really drive everything we do from the customer to the consumer, the retailer, the distributor back through our organization. In lean terms, we want pull from the market instead of only pushing out into the market,” he said.

Secondly, he said, now that he and his team have clarity around Armstrong’s long term strategy, he’s assessing structural changes that may be necessary to facilitate the execution of the company’s long term plan.

“I’m working with my team to understand what those changes will be. It’s a work in progress. I believe strategy comes first and then you need to make sure you’re structured correctly in order to execute that strategy,” Maier said.

Thirdly, Maier will focus on Armstrong’s ongoing commitment to organizational vitality and developing the company internally.

“It’s important to grow and expand folks here as well as going outside to bring in new talent and new perspectives to fill those structural gaps we may have as we go through the process. My plans aren’t dramatically different from where Tom was headed but I think I have a sense of urgency around those three items,” he said.

Company mandates
At Surfaces earlier this year, Mangas told FCW that Armstrong had set strong targets on its wood business as well as investments in Chinese manufacturing to better serve the Asian market. According to Maier, there has been good progress on both fronts.

“We had a fairly disappointing year in wood in 2013 as we were ill prepared to respond to the demands that hit us. There was radical inflation on raw materials that we were unable to obtain price realization. The economic performance of that business was well below where we had planned to be but we’re dedicated to our wood business and for us it’s a long term play. While we were disappointed with 2013, we put together a long term plan that would return us back to an acceptable performance and a platform to be able to grow from in 2014, and we are ahead of that plan through the first half of the year,” he said.

In regards to Armstrong’s investments in China to support the Asian market, Maier noted that the company is pleased with its performance and is well ahead of plans, from both a growth and profitability standpoint.

“We’re excited about the investments we made in go-to-market capabilities in India and most recently in Southeast Asia,” he said.

Along with its changes in management, Armstrong is currently going through a transformational period, noted Maier.

“Going back to 2010, if you look at what we have done to get our house in order in regards to aligning our SG&A with new market realities of the post 2008 meltdown as well as rationalization of our plant footprints and manufacturing, juxtaposed with radical investments, over $350 million invested in new plants and facilities, we’ve worked hard to align ourselves with market changes. And while that work is never done, we’ve made meaningful progress,” he said.

The next phase for Armstrong, Maier explained, will be from a cultural standpoint.

“How do we return back to our founder’s intent of instilling faith in our buyers, where we drive everything we do from the customer back up through the company. All of the great ideas are out with our retailers who work with the consumers every day and we have to connect into that pipeline. We need to connect in a more meaningful way with our distributors to understand their needs and drive things back into our systems, processes and offerings,” he said.

Read the full article at http://bt.e-ditionsbyfry.com/article/New+Armstrong+CEO+sets+course+for+change/1819363/226668/article.html.

High-end product, investments drive Dixie’s growth

Janet Herlihy


Acquisitions, new and wide selection of product and its high-end positioning drove growth at The Dixie Group (TDG) for the last decade allowing it to recover and thrive sooner than perhaps other carpet firms.

“We recovered more quickly because we were positioned at the higher end and, even during the worst of the downturn, we were investing in new products,” Daniel K. Frierson, chairman and CEO told FCW. “Retailers want more choices and we do a good job of offering retailers more. On the commercial side, we also offer more options to specifiers.” Dixie also maintains significant inventory so that it can deliver what its dealers need quickly.

With a history that began in 1920, TDG continues to grow and thrive through its ability to evolve to suit changes in environment. Made up of Dixie Home, Masland Residential, Fabrica and Masland Contract, TDG’s carpet sales grew 68 percent from 2009 through 2013, as reported in last year’s annual report. Residential carpet sales were up 88 percent, while commercial sales grew 28 percent. The growth was driven by extensive investment in “product, processes and people,” said Daniel Frierson.

Once the recovery started, Dixie began to look for acquisition opportunities and has made key additions every year since 2012. “There were no prospects from 2003 until 2012,” noted Kennedy Frierson, vice president and COO. “But in the last two and half years, opportunities have come and we have taken advantage of them. We wanted to be differentiated across the commercial and residential markets. In late 2012, we purchased Colormaster, a continuous dye operation, and Crown Rugs. We moved the Crown Rugs business to California and merged it into Masland Residential.”

In 2013, Dixie purchased Robertex, a manufacturer of tufted wool carpets with skein dyeing facilities. The acquisition included Carousel Carpet, which had been acquired by Robertex in 2010. “Robertex was a good fit with Dixie’s complimentary strengths because we have the marketing and sales network,” Kennedy Frierson explained. “Robertex is sold through Masland and within the next 12 to 18 months, the Robertex brand will transition to Masland,” he added.

Also in 2013, Dixie entered agreements with Desso, a major European manufacturer of broadloom and modular carpet, based in the Netherlands. “The two companies, which have complementary strengths, began working together in October 2013,” said Kennedy Frierson. “We have a hospitality joint venture that combines Desso’s woven Axminster products with tufted products from Masland Hospitality that also includes some printed broadloom lines. Dixie and Desso sales teams are selling the products together for a complete package,” he said.

Desso, a leading modular tile supplier in Europe, did not have distribution in the U.S. Its second agreement with Dixie has the Masland Contract sales force selling a selection of Desso modular tile products. “Some of the products are very ‘green’,” Kennedy Frierson said. “Masland is about design excellence while Desso has technical expertise,” Kennedy Frierson stated.

Looking for a way to grow its commercial business internally, Dixie launched Avant Carpet, a new brand, in 2013. Created to fill a need for a more fashion brand, some Avant products launched in 2013, but more are being introduced this year. Kennedy Frierson said, “We have built a sales force from agents already in the marketplace to cover the U.S. and Canada.”

In March of this year, Dixie acquired Atlas Carpets. “It fits the Dixie culture and position in the commercial market,” said Kennedy Frierson. Both companies are style driven. For the most part, Atlas continues to operate as it did before the acquisition, but its dyeing operations have been consolidated into Dixie’s Susan Street (Fabrica) facility located in Santa Ana, Calif. “Our plan is to leverage Atlas design strengths with Dixie’s manufacturing capabilities to be able to bring its high-fashion products to market with better price points,” said Kennedy Frierson. “Atlas has a very strong sales force and excellent brand equity in the market place, which should maximize our opportunities for growth.

Investments in equipment and services are also ongoing. “We have increased yarn production by 40 percent,” Kennedy Frierson said, adding, “We reopened tufting in Eton, Ga. in 2012. We ran out of capacity at Colormaster, so we are also continuing to invest in dyeing capacity. We also ran out of space for distribution, so are leasing space in Adairsville, Ga. and are moving the residential products to that facility.”

An essential part of Dixie’s position in residential carpet is its continuing partnership with Stainmaster. Daniel Frierson explained that Dixie had been a manufacturer partner with DuPont during its textile days and is now committed to Invista for branded nylon 6,6 — Stainmaster for residential and Antron for commercial. “Invista has the most stylish yarns for differentiated, beautiful carpet,” stressed Daniel Frierson.

Going forward, Dixie will continue to be open to opportunities, but is not planning any new acquisitions soon. “Right now, we need to absorb and stream line all operations to take top line growth to the bottom line,” said Kennedy Frierson.

Read the full article at http://bt.e-ditionsbyfry.com/article/High-end+product%2C+investments+drive+Dixie%E2%80%99s+growth/1819365/226668/article.html.

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