Since its inception, DSI has grown by adding domestic manufacturers, national retail chains and buying groups to its list of customers. As Misco transitions out of traditional distribution, it is turning over its business to local distributors to service the retailers in its Midwestern territory. This announcement comes just weeks after a proposed sale of the company collapsed.

"For some time we have considered leaving the traditional distribution side of our business so that we could focus on DSI," company Chairman Jim Gould said. "Selling Misco would have achieved our goal of making certain that our customers, vendors and employees experienced a smooth transition. We wanted to be able to assure everyone that the kind of support they had come to expect from Misco, would continue in the future.

"Our goal has not changed," Gould added. "In the absence of one entity to which our customers and employees can be entrusted, we are identifying several local distributors to take over the traditional end of our business."

To that end, Gilford Distribution, based near Louisville, Ky., has stepped into Misco's shoes in Ohio, Kentucky and Indiana. Gilford will service Misco's Shawnee Hardwood collection, Laroc ceramic, Witex, and several other product lines. Gilford is also picking up a number of Misco employees and has already started servicing Misco's Ohio, Kentucky and Indiana customers.

The remainder of Misco's local distribution business will be transitioned to other distributors, which will be identified as they are installed throughout Misco's large Midwestern territory. Other distributors will service Wisconsin, Michigan, Illinois, Missouri, and parts of Kansas and Iowa. Misco expects to cease traditional distribution entirely within a month or two.

"We will continue to take orders and service our customers' needs until satisfactory replacement distributors have been selected," Gould said.

Although seemingly abrupt, this departure does not come without warning by Misco. Several years ago, Gould publicly stated that the considerable pressure placed on the distribution tier of the flooring industry would result in consolidation. This belief led Gould to create his third-party logistics and services business, Distribution Services LLC, in 1992. That business is supported by his logistics centers near Los Angeles, Atlanta and Chicago.

Created initially to act as a portal for new products and foreign manufacturers entering the U.S. market, DSI now performs national logistics and distribution, global sourcing of products and myriad administrative services for buying groups, national retail chains, as well as U.S. and foreign manufacturers. DSI's Los Angeles, Atlanta and Chicago facilities function as warehouse hubs in the company's logistics network, while all other services initiate from the Customer Support Center in St. Louis.

DSI distinguishes itself from other logistics providers by bundling administrative services with logistics to provide each customer with a customized and dynamic Service Package specifically designed to meet the needs of the floor covering industry. By combining national distribution and logistics with full-service administrative support, DSI provides its customers with everything from order taking and invoicing to accounting, warranty administration, inventory management as well as marketing and business consulting services.

Misco's key management team and support people will remain with Gould as employees of DSI.