Beaulieu's executive management team flanks a new display created to support the launch of the company's new Hollytex Ultimate Perfomance carpet line. Pictured (from left) are Pete Ciganovich, Paul Murfin, Ralph Boe, and Carl Bouckaert.


DALTON, Ga. -- Declaring their recent restructuring of operations a success that's returned the company to profitability, top executives at Beaulieu of America have laid out their revamped business strategy and announced the addition of a new premium performance carpet in the high-end Hollytex line.

During a recent briefing of the floor covering trade press convened, in the words of Chief Operating Officer and Residential President Ralph Boe, to "set the story straight," Beaulieu management explained how the company's January 2000 acquisition of LDBrinkman, then the largest flooring distributor in the United States, combined with a slowing economy to plunge the nation's No. 3 carpet mill into difficult financial straits.

"The last two-and-a-half years have been a real tough time," company CEO Carl Bouckaert explained. "Everything that you can imagine went wrong in 2000."

Responding to financial morass

In the face of intense industry consolidation in 1998 and 1999, Boe said, Beaulieu implemented an aggressive acquisition strategy that saw the company absorb the Marglen, Columbus and Peerless carpet mills before its addition of Brinkman. The moves saddled the company with a heavy debt burden that further exacerbated difficulties presented by slowing retail demand in early 2000 and a simultaneous increase in the price of fiber intermediates.

Because Beaulieu is a vertically integrated operation that manufactures its own fibers, it had to absorb the increased costs of fiber raw materials. The company's performance faltered and Beaulieu defaulted on loan payments to its creditors.

By late 2001, the company had implemented a turnaround plan that halved the Beaulieu product line and sales force, substantially reduced its marketing expenses, slashed inventory by $129 million, and saw the sale of its rug business and Aiken, S.C., nylon plant. Ultimately, the company sold all of its Brinkman assets except for the Hollytex carpet line.

As a result of its restructuring moves, Boe said, Beaulieu returned to profitability in February 2002. He added that the company's debt burden has been significantly pared, its inventory turns have accelerated and it has officially emerged out of default with creditors.

"We feel good about where we are," Boe explained. "We're not back to peak levels, but we will be close to there [in 2003]."

He emphasized that Beaulieu is now operationally sound and viable for the long term, even though the company no longer seeks to overtake its larger competitors, Shaw and Mohawk. "It's not important to be the biggest," said Boe, "but it is important to be the best."

"We're No. 3 and OK with that," added Paul Murfin, executive vice president of marketing.

Having divested itself of its hard-surface product lines, Murfin said that the refocused company is positioning itself as an alternative carpet supplier to retailers who already carry the Shaw or Mohawk brands. But, he added, Beaulieu continues to produce a "broad enough range of products to be the primary supplier to any dealer."

Chief Operating Officer Ralph Boe explains the attributes of a Beaulieu product line.

Ultimate Performance previewed

The new Hollytex line, dubbed Ultimate Performance, is slated for introduction at Surfaces 2003. The product features PermaSoft Plus solution-dyed nylon backed with a stain-removal guarantee. In fact, Beaulieu claims the carpet -- unlike competing products -- can be cleaned with heavy-duty household cleansers and even bleach (as high as a 50 percent solution).

In addition, Hollytex Ultimate Performance incorporates the Magic Fresh self-renewing, odor-destroying carpet treatment. Magic Fresh, Boe explained, is a salt-based compound -- rather than an enzyme -- that adheres to the carpet fibers and chemically absorbs and decomposes gasses from odor sources. The treatment is said to withstand numerous cleanings while still maintaining its odor-destroying properties.

Ultimate Perfomance will be supported by a display and merchandising package that will available to dealers in early December 2002, according to Pete Ciganovich, Beaulieu's executive vice president of Residential Sales.