Q&A with Floors and More CEO Vinnie Virga
Vinnie Virga has been in the flooring business more than 30 years, spending nearly 13 years at CCA Global Partners. He stepped down as president of Flooring America to open Big Bob’s stores in New England. In 2016, he became managing partner in the Big Bob’s organization and later that same year he acquired the flooring retail group, Floor to Ceiling.
We had an opportunity to sit down with Virga recently to gain some insight into the makeup of the Virga’s group, which operates under the brand Floors & More Buying Group, to better understand some of the changes he has initiated in the various groups and also to ask him about his vision as to how he sees this shaping up over the next 10 years.
You can listen to the full interview in our TalkFloor podcast section. Here are some excerpts from that interview.
TF: A great deal has changed with your organization since we last talked. Fill us in on the most recent changes that have been made.
Virga: It’s been a very exciting year and a half for us. Back in January 2016, we acquired control of Big Bob’s of America and started operating that business. Then in April of that year we acquired Floor to Ceiling from Preferred Brands and took over the control of that business. In both cases, we acquired businesses that had really great foundations. There were, however, different elements in their programs that needed improvement if we were going to offer retailers the very best program to help ensure their ongoing success and to maximize their profit potential.
As a result, for the last year and a half, we have spent a great deal of time and invested a tremendous amount of money in building infrastructure so as to make sure we have all of the elements our members and prospective members need: digital marketing tools, custom websites, social media postings, universities for online education and live training camps. The analogy is, we have purchased these really great houses, but they needed some work. So, we have taken the time to invest, making sure we have the staff, the programs and the systems so our existing membership can really benefit from a world class system.
TF: Did you begin with the concept of developing a buying group when you first began buying Big Bob’s stores?
Virga: When I left CCA Global Partners, I was frustrated. I was tired of the bureaucracy. I also was a little burned out from the big corporate machine. It’s not that it’s not a wonderful group, but for me, I had been there for almost 13 years and I really wanted to do things differently, but I was unable to because I was bound by a non-compete. So, when I teamed up with Dave Elyuchar, founder of Big Bob’s, who is a really dear friend and someone I admire greatly, we put together a program where I would open locations and eventually have the option to purchase. That was always the intent. It just had to be done in a way that was appropriate.
TF: At the present, how many stores are we talking about?
Virga: When we bought Big Bob’s there were about 30 stores. We had five Big Bob’s stores, plus the remaining member stores. The Floor to Ceiling group had 56 stores. After purchasing the Floor to Ceiling group, an interesting point was that we had already been moving our local Big Bob’s locations to the Floor to Ceiling model because there was so much opportunity for kitchen and bath in the New England marketplace. Essentially, we have had a couple of store openings in the Big Bob’s group. We have had some members who were really not active in the Floor to Ceiling group. Right now, there are about 80 active storefronts in the group, prior to the new ones that are opening. We also have about 12 new players that are in the process of applying to join Floor to Ceiling or are being approved. We also have several Big Bob’s multi-store deals that are in the offing. We see a great deal of growth ahead. We see by year’s end somewhere between 90 and 100 units.
TF: What about your ultimate goals? Do you have store count target?
Virga: In the next five to seven years, we want to be at 700 storefronts in Floor to Ceiling and we want to be at least 200 storefronts in Big Bob’s. I feel that these numbers are actually conservative. Most people, when they hear those numbers, don’t realize the opportunity. Floor to Ceiling, in reality, is such an easy win for someone who is an independent retailer, an independent kitchen and bath company, or someone who has been with a group and doesn’t feel they are getting a great deal of value for their money, because the value equation in Floor to Ceiling is really off the charts.
TF: Most, I expect, are familiar with Big Bob’s. Fill us in on Floor to Ceiling and Floors and Kitchens.
Virga: Floors and Kitchens is a sub-brand of Floor to Ceilings. There currently are five local stores, but it is a brand that can be used by members. Floor to Ceiling is the primary brand and it does well with consumers. The beauty of Floor to Ceiling is that retailers can join and keep their existing brand name. The agreement for membership is an easy one: there is a simple seven-page agreement. There is a three-year term. If, after the first year, a retailer is not happy, they can walk away no strings attached.
The way it works is that there is a small investment to join and a monthly fee, and for that fee they receive a full custom website and social media management. We know the social media properties retailers need to be on and what they need to advertise on. We do nine posts per month for members who are in the program. We have HDTV commercials, radio and print ads and we even customize the print ads based on the member’s needs. Available also is a 12-month, plug-and-play calendar. Even if a member chooses not to do TV, the commercials can be tagged with the retailer’s name and posted to their website to show greater size and scale.
We have a world-class university offering product knowledge and 47 different management courses, sales management, inventory obsolesce and a number of additional topics with testing for the staff members. And there is unlimited usage as an element of base membership. Attendance at our semi-annual convention is also included in the base membership. Also, any member of Floor to Ceiling can have any member of our staff come out to visit them and consult with them; all they have to pay is the travel expenses. There is no additional fee. We also offer private label programs and rebates.
TF: How much activity are you seeing in terms of members of various buying groups dropping out or switching to different group?
Virga: It’s a very interesting time right now. There are many people in the better-known groups that are getting older and have no one to take over their business. Because of that, those businesses are either going to close or they have substantial issues and are at high risk. That is one challenge that the industry has, and I feel it will impact the membership of those groups substantially. In addition, there are members who are not happy, including members of the mill-aligned groups. There are two major mill-aligned groups and I feel that the top one-third of the membership is very happy. Many members among the remaining two-thirds, however, are unhappy. That leaves many retailers that are interested in making changes. The way the court system works is that an unhappy member must reach out and express interest to us; we cannot actively solicit someone who is in under contract with another group.
TF: What is your take on the mindset of retailers out there? It appears that the next five to 10 years are going to be pretty rigorous for independent retailers. There is lots competition from the large players who are spending a great deal of money. That means it’s going to be tough sledding for many retailers. How do you see retailers reacting to this situation?
Virga: There are a number of issues. One of the more interesting is that we have an economy that appears to be picking up, so we have three to six years of increased economic activity and all boats tend to rise with the tide. That is certainly good news and will definitely help some people. The bad news is that it will mask problems in some people’s businesses. There are many in the industry that have not learned about or are not investing in digital marketing. They are afraid of it; they don’t understand it. They are not leveraging technology. Many are not using software; they’re still using QuickBooks or paper. And those people really need to get engaged in digital marketing and software like RFMS in their businesses or they will become dinosaurs and it will be extremely difficult for them to compete. And it’s probably just a function of time for them.
Home decor is also becoming more and more important. As a result, we are recommending that our Floor to Ceiling dealers need to consider cabinets and counters, perhaps even lighting and plumbing, pillows, decorative products—even pictures and mirrors and blinds. Home decor permits retailers to offer consumers entire solutions vis-a-vie the retailer’s designers and an opportunity to become a one-stop shop. We feel this is the best way for a full-service retailer to go in this environment as a means of differentiating themselves.
On the Big Bob’s side, it’s a different animal because it’s a value play. It’s about offering really strong values and allowing the consumer to feel good about their purchases and brag about how much they saved.
TF: What is your vision as to the way the independent flooring retail community will take in 10 years? If there are 10,000 to 12,000 independents currently, what do you anticipate that number will be in 2022?
Virga: Unfortunately, I expect the number will decrease. One of the elements taking place that many don’t realize is that more and more of some of the largest suppliers are either attempting to take control of the consumer relationship and dictate who they will do business with, or they are selling on the internet and partnered with organizations that are becoming more important for them these days. I feel that these two factors will create even more downward pressure for independents, creating more closings and more consolidation.