With a large percentage of floor covering retailers coming in somewhere around the 55-year mark or above and beginning to retire, it’s interesting to note some of the actions members of the next generation are taking as they take over their family businesses. The moves this younger crowd have taken to update and make their businesses more efficient and up-to-date are especially compelling.
One such next-gen retailer is Adam Nonn, president and CEO of Nonn’s Kitchen Bath & Flooring, with locations in Madison, Middleton and Waukesha, Wis., and now Menomonee Falls, Wis. For the last several years, we have been following the progress and the growth at Nonn’s and the updates that Adam has brought to the company. The company announced this spring that it was acquiring Malkin’s Flooring of Menomonee Falls, giving the company a second location in the greater Milwaukee area.
Foster: Congratulations on your recent acquisition of Malkin’s Flooring.
Nonn: We appreciate that. We’re very excited about the acquisition. We’re bringing on the entire Malkin’s team; they have 27 employees that are tried and true in the flooring industry, and we’re very pleased to be bringing them on. We see a lot of opportunity and we see great adhesion with their culture and ours.
Foster: Talk about the attraction Nonn’s had with the Malkin’s operation.
Nonn: This started a while back. I reached out to Marty Schallock, the owner of Malkin’s, about three years ago, and after competing with them day in and day out in the Milwaukee market, I liked the way they do business. The people working there were top-notch, and any time you see a business that does it right you take notice. And that’s how I began to look at the company. I liked some of their efficiencies. Also, we are a Mohawk Floorscapes and Karastan Gallery dealer, as is the Malkin’s operation, so there are several similarities in the suppliers. Malkin’s also has a good mix of business with retail walk-in traffic, remodel business, new construction single family—they also do some light commercial and smaller multi-family business as well. We are involved in each of these segments also and saw this synergy as a major asset to help us grow our presence in the Milwaukee market.
Foster: I understand that you will continue to operate under the Malkin’s name.
Nonn: That’s right. The Malkin’s brand has a part of the Milwaukee market since the early ’80s. The Schallocks have owned it since 2001. Our public relations firm is running a brand equity study to see if it makes sense for us to change the name. At the end of the day, our interest is in making sure we are taking care the customers. We don’t want to hurt the brand, but it’s going to be something we will remain open to.
Foster: The last time we talked, we learned that you had entered the appliance business. I don’t expect that Malkin’s is in the appliance business.
Nonn: No, Malkin’s is not in the appliance business. They are solely in flooring. We liked the operation because flooring is our largest category. However, we also sell cabinets, countertops and appliances; but flooring is still our bread and butter, and any time we can bring in a good flooring company with knowledge and experience, it makes sense for us to look at them carefully. It doesn’t mean that we won’t eventually add on some of the other elements, but right now our prime focus is to take care of the Malkin’s business as is and what they do well and to get to know some of their customers.
The Milwaukee market, from our standpoint, is really a three-store metro market with segments in the west, the north and the south. Our current Nonn’s location served the west and central areas well. The Malkin’s location does a very good job of covering the north and central areas of the market. We viewed that as a good base. Consumers in that area tend to be more middle- to high-end. Malkin’s also has a couple of builder accounts, and looking at the builder accounts we do business with, there are only two that overlapped.
Foster: How about the commercial side of the business?
Nonn: We have a commercial division at our Waukesha location. The Milwaukee market is very busy on the commercial side. There are both union and non-union operations with both sides currently being very active. The most challenging aspect for us is labor. An additional reason why we loved this opportunity is because Malkin’s operates close to 50 independent contractor crews, and it will really open the labor force for us as well.
Foster: Nonn’s uses independent contractors to install. It has been suggested that hiring installers, offering training and certification as well as a career path may be an effective way to deal with the national installation problem. Do you see this option as a potential solution?
Nonn: This is a complicated discussion. Unfortunately, there is not a one-size-fits-all solution. With the downturn, many in-house installers just weren’t kept busy, and as a result, many became independent contractors to allow them the freedom to take jobs as they deemed necessary. In the Wisconsin market, a great many installers like the fact that they are independent contractors and can pick and choose the jobs they want to work on and when and where they want to work. It has allowed them a great deal of flexibility, and I think as independent contractors, installers are their own bosses and tend to work a little harder. We do, however, need a creative solution to continue training for new and future installers because if we don’t do something, we will be in trouble.
Foster: Do you see the idea of promoting the fact that installers are certified as an advantage?
Nonn: I feel that consumers would be very pleased any time a certified installer is on a job. On the appliance side of our business, all installers are in-house. That’s because we are dealing with gas and water. Subzero Wolf is a brand that we offer. It’s a very prestigious brand, and we have elected to send our installers to a two-week long training session at Subzero Wolf. It has a sizable advantage to customers because that then gets a longer warranty.
Foster: You mentioned earlier that you had been in touch with Malkin’s several years before the acquisition. Would you say that you are in expansion mode and are on the lookout for acquisition targets?
Nonn: Absolutely. Any good opportunity that presents itself we will take a look at. We get calls weekly on different opportunities. We are looking to grow as a business, however, we want to grow with good companies that have a similar culture and have ethics similar to ours. It’s not really about the top-dollar number for me; it’s about finding good people that fit our culture and can help us grow. Our greatest asset at Nonn’s is our people; so for us to acquire, we would want to conduct research based on the people. We're definitely in an expansion mode if the right opportunity presents itself.
Foster: You have been an early adopter as it relates to technology. We talked some time ago about your shift in industry-specific software providers to keep track of day-to-day business.
Nonn: It is definitely a learned skill, but you need the correct technology. We have partnered with QFloors. We’ve started the onboarding of Malkin’s, we transferred them over and now have them up on our QFloors system. There are a great many capabilities with the software. We have a great deal of information at the tips of our fingers, and I can run any report instantly and know exactly how we are doing. It makes a big difference, and it speeds up our entire decision-making process. Today’s consumers expect it. It’s what the companies we work with, remodeling and building companies expect. They expect information right away. They do not want to wait. Having a good information technology partner is extremely important.
Foster: Talk about your approach to digital marketing.
Nonn: We have a complete strategy, and it’s a great deal more than just having a good website. Ten years ago, you needed a great website. Today, you need a great deal more than just that good website—you need to have a complete digital strategy. We have a marketing firm that handles all digital matters for the company. We’re in all the digital spaces: Twitter, Facebook, Instagram, Houzz, Pinterest, and many, many more. It is absolutely necessary to be active with these platforms because it’s where many people see our company’s information. We have many socialites online where they have millions of followers who read the content in their tweets and Instagram feeds. These are the same activities many of our large suppliers in both floor coverings and appliances are doing. More companies are looking to non-traditional ways of marketing. It’s necessary to be up to speed with what is going on in the marketplace, or you will fall behind.
Things in the digital world change by the minute sometimes. That’s why we have a full-time company that handles all of that for us. We used to handle all of that in-house; but as we have grown, shifting our approach to an outside company became necessary. They handle all of our digital business. As we have grown, we needed someone to handle this part of the business 24/7.