Rules Rapidly Changing in the World of Floor Coverings
On the retail front, Flooring America filed for Chapter 11 and then the original owners of Carpet Exchange, which had sold its stores to Flooring America, stepped in and bought back a dozen of them. And then Carpet One bought a whole slug of the Flooring America outlets and its GCO stores. That made Carpet One an even bigger giant than it already was.
Speaking of retail, there were interesting announcements from the Big Boxes. As the year was coming to a close, word surfaced that Home Depot slashed prices by 10% across the board "because of sluggish holiday sales." Gee, most specialty stores long ago recognized the folly in losing a buck a yard and trying to make it up on volume. And Home Base closed a bunch of locations and announced it would set up high-end stores. Obviously, we stick to our belief that the specialty store is the true leader in floor covering retailing.
And not to be overlooked is the WFCA stepping boldly forward with an ad-hoc committee to address the long-neglected problem of dealers/contractors/installers being held responsible for moisture testing. The WFCA White Paper gives the industry an unexcelled opportunity to bring order to an area of critical need.
A tragic event was Armstrong's filing for Chapter 11 protection because of the threats of really big bucks (billion dollars-plus) asbestos lawsuits. Sad, isn't it? Even though relief should be provided through legislation, the Congress continues to dilly-dally. Keep in mind that asbestos-related suits affect more than just our industry.
And then there was the day when an announcement reverberated throughout the industry: Warren Buffet's Berkshire Hathaway holding company had agreed to buy Shaw. "Gee," people said, "maybe the industry is even more desirable than we thought it was." Consolidation of manufacturers did continue on many fronts. Included was Ardex's purchase of Henry from Armstrong.
Distribution also exploded on the scene when Congoleum appointed Mohawk as a national distributor of its resilient products. The move put Mohawk in and LDBrinkman, a Congoleum distributor for decades, out. Yet another change on the distributor front was the purchase of Sound Floor Coverings by Kraus Carpet Mills.
These are just some of the events. So how about this year? We fully agree with those who predict a continuation of these who-would-have-ever-thought-it announcements. Furthermore, dramatic as last year's developments were, they will pale in comparison with those coming down in 2001.
That there are going to be some major shifts in distribution is obvious. Large and important switches are being made across the board in all products and in every industry segment. You will need a program to keep track of who has what and who represents whom.
We also agree that the opportunities for floor coverings remain abundant. Those who spend their days preaching doom and gloom miss the glowing realities of the marketplace. And what are the realities? Simply that business is out there waiting to be plucked by those who focus their attention on service and products.
The major challenge at all levels for 2001: Recognize the changes and act upon them accordingly.