When resilient flooring manufacturer HMTX announced the unification of its Metroflor and Teknoflor teams, industry insiders took notice. In this candid conversation, Russ Rogg, president of HMTX's Contract and Trade business, pulls back the curtain on this strategic realignment, revealing how HMTX is streamlining operations behind the scenes while preserving brand identities. From healthcare to hospitality, discover how this resilient flooring specialist is positioning itself for growth in a challenging economic landscape through savvy partnerships and laser-focused market expertise. Listen to the podcast in its entirety here. The transcript below has been edited slightly for length and clarity. 

Floor Trends & Installation: HMTX recently announced the combining of the Metroflor and Teknoflor teams under a new Contract Business & Trade Unit. Can you tell us about that?

Russ Rogg: There's a lot of symmetry between the two. A lot of the products are similar, and the factories that we work with to procure those products have a lot of similarities. We just felt like it was almost redundant to have two entirely separate business units doing things that were very similar to one another, that it just simply made sense to conjoin the two.

Frankly, a lot of the benefit, as I see it, is behind the scenes and probably not always forward-facing to the customers to whom we'll be selling. From a sourcing perspective, a relationship perspective with the factories, product management, I would say sales leadership, product management, all of those things have been historically pretty strong, For Metroflor, we'll be able to take those teams that had been performing those functions and provide some benefit to the Teknoflor product lines as we go forward.

Forward-facing, the goal is to try to segregate a lot of it. We want to be true to the channels and true to the brands. The Metroflor products and brands will continue to be sold through the network of independent wholesale distributors that we have today across the country. The Teknoflor and Aspecta brands will be sold through a different channel, which is now an alliance we've created with Spartan Surfaces. They will be our nationwide distributor for those products.

We're really excited about that alliance with Spartan. We think they can do a remarkable job for us with those two products and brands, given their coverage. And then separately, we're quite pleased with what the Metroflor distributors do for us with that assortment of products.

Floor Trends & Installation: How does the new contract and trade business unit fit into HMTX's global strategy?

Rogg: HMTX, is the parent, or I sometimes refer to it as the umbrella organization, and then underneath that umbrella, you have what have historically been a number of individually operating business units.

The one business unit that may be less familiar to your readers or listeners would be Halstead. Halsted is a division that sells predominantly to the Home Center Channel, with its number one customer being Home Depot. It offers many very similar products to what Metroflor brings to the table with WPC and SPC products, but it is singularly dedicated to the big box retail channel.

As I mentioned a moment ago, Metroflor and HMTX commercial were operating separately but are now conjoined under HMTX contract and trade. The contract piece is intended to be the commercial side of the business, and the trade piece is what we're considering the traditional metro floor business.

And then we have a global division. It's a global division headquartered in the Netherlands, and they do all of the above, selling products throughout Europe and other parts of the world. They'll sell products to home center outlets. They'll have some private label and customer business opportunities, and they also sell products under the Aspecta name. They are a miniature version of what both Halsted and now the contract and Trade Division does here in the United States. They do that for the rest of the world.

Floor Trends & Installation: It offers HMTX a lot of differentiation, which I imagine in this global economy that becomes even more important.

Rogg: Differentiation is a good one. Flexibility, maybe adaptability in the sense that we're taking the strength that we believe that we have with longstanding factory relationships that were built by the Stone family over decades and using those relationships and our product reach to address market needs, not just here, but abroad in all different aspects of the industry.

Now, with that said, we're focusing mainly on resilience. We’re a company that is not focusing on laminate or wood or carpet. It's really just all different variations of resilient flooring.

One thing that's unique about the commercial piece relative to the trade piece of this new division that we've now merged is that the commercial piece is selling homogeneous sheet products, heterogeneous sheet products, a variety of PVC-free variations in both plank tile and sheet, whereas that's somewhat unique to the commercial piece of our business here in the United States. That's much more uncommon for us to be doing in other parts of the world.

Floor Trends & Installation: What segments within the commercial market are you seeing particular growth in this year?

Rogg: The Teknoflor brand, in particular, is one that's been around for decades in and of itself, and its strongest hold is definitely within the healthcare environment. I would say, second to healthcare, you would find education, again, leaning on that Teknoflor heritage.

When you think about the Aspecta brand, that's a brand and the products' styling, I would say, that oftentimes appeal to hospitality, corporate environments, and to some extent, education. But I would say that it's hospitality and retail, maybe first and foremost, for the Aspecta products.

Floor Trends & Installation: There's been a lot of consolidation within wholesale distribution. Do you foresee further consolidation?

Rogg: We've lived through some consolidation that's occurred over the past number of years. And I would say in just about every instance, if not all instances, it's been good for us in the sense that we've been fortunate enough and are fortunate to have really, really strong distribution partners all throughout the nation today.

In most cases, they were distributor partners that acquired other distributors, or maybe we had a distributor in a given market that went out of business or elected to exit the business. We had an existing partner that they could assume that geography.

Today, we really have, at least in the United States, six primary wholesale distributors to whom we sell Metroflor-branded products, as well as some private label product assortments. And if you were to look at what that might have been, even five years ago, that number of six probably would have been nine. If we had looked back 10 years ago, nine probably would have been 12.

We’ve already gone through a fair amount of consolidation. When I look at our current distributor assortment today, they're all pretty big. I don't know that I would envision, at least within our network, much additional consolidation, but I guess anything is possible.

Floor Trends & Installation: Talk a little bit more about the strengths of the Spartan Surfaces partnership.

Rogg: Spartan is very specific in the commercial and specified marketplace, which is why we think that they're very good fit for the Aspecta and the Teknoflor brands. They're calling on architects, designers, and users, facility managers, etc., attempting to get the products that they represent and the brands that they represent written into specifications, and that's where we think our products can thrive. We think that they bring a lot of value to that methodology, that go-to-market strategy.

From sheer numbers, I believe the last count that I had seen is that they have nearly 100 representatives that are calling on those end users and architects and designers like I just described a moment ago. And that's pretty significant coverage, just from a feet on the street perspective that I don't think we weren't able to achieve previously.

They've been known to be aggressive, they're hip, if I could dare say, and I just think they're an exciting type of business partner for us to be aligned with, and I think they'll do a great job with our brands.

Floor Trends & Installation: What’s your outlook for business this year?

Rogg: We were anticipating, even prior to some recent industry changes or announcements, that this would be a tough year. I think that inflation was maybe just at the beginning stages of getting under control; interest rates, which we were hoping for to drop, aren't dropping as quickly as we had liked.

Retail business is slow. The housing marketplace is tough regarding the resale of existing homes and the construction of new homes. It's tough to point to any area that looked like it would be robust.

So, we were still anticipating and planning for growth, but it would be modest. Certainly, in the single-digit type of perspective, from a modest standpoint. And I'm not sure if I would change that based on this call, but it's going to be a tough year. There isn't any doubt about it.

We're focusing on controlling what we can. We can control the products we make and maintain the quality we deliver. We attempt to make our products as competitively priced as possible, and we have great sourcing and manufacturing relationships. We're focusing on what we can control. And there's a lot that is out of our control at this stage of the game.

Floor Trends & Installation: What's next for HMTX?

Rogg: We are trying to inform our customers of what's going on within our company, explaining to them why we joined these two business units together. We are now focusing on bringing products that we think can add value for them, and we are doing so with a strong supply chain model that we think we have.

But again, as is well known, there's a lot of disruption that's going on in the marketplace today, and we're just focusing on living up to the promises that we've made about bringing the companies together and delivering products that we think can help them be successful in the future. Beyond that, I don't know that I could look into a crystal ball and predict too many years down the road.

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