Although the mood at the four-day meeting in Phoenix was upbeat, the agenda was clearly designed to address a challenging business environment. Using the theme “Beyond Imagination” Mohawk officials told 290 dealers representing about 500 stores that taking tighter control of their business is “essential for survival.” The message was the focus of Mohawk CEO Jeff Lorberbaum’s remarks. After reminding store owners that the company is “making the tough decisions to invest during difficult times,” he urged them to do likewise.
“You face tough choices as well,” Lorberbaum told the retailers. “The most significant is in understanding: You can no longer do business like you used to.” He encouraged them to take advantage of what Mohawk offers including “training classes to help you manage your margins.” He went on to say “I do not foresee any significant industry improvement in the first half of next year…We must focus on the right areas. Sell value to your customers; maximize your margins, don’t give it away; gain market share with the high-end consumer. Advertise.”
A focal point was a new members-only web site designed to help dealers determine how they measure up against other Floorscapes stores. To help facilitate an apples-to-apples comparison of expenitures and other figures, the new benchmark system is designed to “work around state tax laws and other issues that cause differences in financial statements.”
To get the system off the ground, participating dealers were asked to upload results for 2006 and 2007. Mohawk said the result will be “a two-year database that will allow stores to get a very clear picture of the true cost of their operations.”
Introduction of the “Aligned Dealer Benchmarking” tool, as it is formally known, is part of a strategy to encourage more interaction among Floorscapes stores. Also in the works is a communications network for dealers that will “allow interaction, provide them with product opportunities, dealer-to-dealer tips, financial specials, and other valuable information.”
Other Floorscapes initiatives made clear Mohawk’s intent to leverage its position in two high profile areas: Environmental concerns and hardwood flooring. The company notes that “two of Mohawk's best-selling carpet products offer some of the strongest green stories in the flooring business.” Its EverStrand fiber is produced from recycled soft drink bottles, making Mohawk is one of the largest recyclers in the world. Also, production of its SmartStrand fiber made with DuPont Sorona uses corn sugar to replace a portion of the petroleum used. As a result, energy consumtion and gas emissions are greatly reduced.
In hardwood, the acquisition in 2007 of Columbia Flooring will result in the launch of 70 new wood floors this year, the biggest in Mohawk’s history.. Product lines include Nature’s Eloquence (domestically produced solid oaks), Antique Artisans (3/8” hand scraped oak) and Tradition Expressions (3/8” oaks and domestic exotics featuring Mohawk’s exclusive UniClic Edge.)