A huge plus for the industry can be found in overall sales trends. One dealer in a particularly hot market, for example, reports that sales were off on the retail side during the first quarter, but were up in the contract category and about even in the delivered segment. Then, with a broad smile he adds the good news: "The affluent customer is still out there. One of our top sales stars closed the first part of a residential remodel job last week for $54,000 (wood and tile) and will close the carpet and rug portion in a week or two for about $46,000."
Looking at the installation and supplies segment of the industry,Ray Colombo, L. Fishman & Son, Baltimore, lists several highlights: "While the rate of total home sales has slowed down, it remains high. New home starts continue at a very high level by historical standards. Much of the material we sell goes into commercial construction, which is also at a very high level. This sector accounts for over 60 percent of our total volume, which through March was up 10 percent. Commercial account orders for future delivery are at record levels for our firm.
"We had been experiencing delivery delays because many carriers were engaged in post- hurricane deliveries. This seems to have leveled out and we are now receiving steady and timely shipments." On the down side, Colombo laments that, "We have had to increase delivery charges to compensate for the rapid run up in our fuel costs after the contracts ended late last year. This is in addition to having to keep driver wages competitive. All of our drivers are CDL certified. Insurance costs are also up significantly."
Fred Acton, Acton Flooring, Vestavia Hills, Ala. says he is plenty happy about his business. "The first part of '06 was great for us in Birmingham. From the contract side we are seeing more attention being given to green products. New home construction is ahead of last year. On the retail side, we expect to have the best year ever for Acton Flooring." Looking at the other side of the coin, Fred cautions, "I have great concern about rising oil prices. If not held in check we will all be in for some real trouble."
Mal Wilk, Diamond W Floor Covering, Los Angelessays he is bullish about business. "In spite of many forecasts to the contrary, the new housing market has remained strong in our area, proving the old adage that where there is demand there will be supply." He sees no appreciable slowdown for the second half of the year.
Also, the latest generation of flooring products comes in for high praise from Wilk: "The proliferation of products continues to be mind boggling, particularly in hard surfaces. I sense that dealers are being cautious about flitting from product to product and are paying more attention to the values. The values include consistent inventory, material shipped on time and correctly, claims handled quickly and fairly and credit lines that accommodate increased business."
He is also quick to point that that the wave of new products also places additional demands on sales floor personnel. He adds that suppliers should be doing more. "Some suppliers often merely give lip service to retail salespeople's product knowledge and training for our products. Retail salespeople are critical to the success of our products with Mrs. Consumer. In the second half of the year we must do a first rate job of imparting product knowledge to retailers and their salespeople if we want to grow our business."
Dave Stafford, Commercial Carpets of America, Alexandria, Va., painted a realistic picture of the industry. "Business in the retail sector has been strong during the first quarter, as has most commercial business. Government business has been slower than expected due to various policy changes and funds allocation, but there should be improvement in the third quarter. All businesses will be affected in one way or another by higher commodity and fuel prices."
Dennis Cook, Gilford Flooring, Jeffersonville, Ind., says his enthusiasm has grown over the past few months. "We entered 2006 cautiously optimistic and went to Surfaces with this same attitude. We left Surfaces with a more positive and bullish attitude because our customers were bullish. We supported their positive attitude with orders for stock materials and new merchandising programs.
"Sales during the first quarter of 2006 were good due in part to our hardwood and laminate floors," Cook continued. "We see this continuing for the balance of 2006. Our product mix is stronger, our customer focus is stronger and the merchandising available is far superior than it was in the past.
"We are bullish on the economy and our ability to drive business but there are some concerns that are on our radar screen. They are: 1) The continued rise in the cost of fuel and drivers for our fleet of trucks; 2) The increase in interest rates, which increases our costs of borrowing, limits consumer spending and negatively impacts housing starts and 3) Our inability to hold the line on prices due to competitive pressures.
"We had a great start this year, and we are looking at the balance of 2006 very favorably. However, in the distribution business there is no time to relax - hard work, customer focus and controlling operational costs are the words of the day."
Ronnie Katz, Harry Katz Carpet One, Minneola, N.Y., notes that the natural disasters that slammed the Gulf Coast region had a ripple effect that reached his business on Long Island. "Since the hurricanes of last year, our business has dropped off on the retail level. Starting with October we had some of our worst months ever."
He offers a reason for this: "I have found that the Long Island market is driven by stock brokers and their families. If they are unsure of the market, it seems like their spouses do not go out and shop. This in turn causes all local business to pull back. I believe we will begin to see a cleaning out of some retailers in our area like we did in the recessions of the late '80s and early '90s."
Glenn Gardner, Gardner Industries, East Hanover, N.J., cautions that the retail landscape is likely to change. "Market consolidation (supply and product) will continue to weigh heavily on how our industry transitions over the next couple of years. The home center influence is even more evident today as many floor covering dealers are still working to find their unique identity to stay in business. Broad spectrum marketing or niche marketing appears to be the necessary paths to follow because there is no in between anymore.
"Our company has not only broadened into solid wood, but has also taken the niche path and developed a fiberglass sheet vinyl line. Loose lay/glueless vinyl is the growing segment of the sheet vinyl business."
"Where is the strength in our economy?" asks Gardner. "It sure is not strong in the Northeast. We need a good "shot in the arm."
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