2009 was a challenging business climate for our industry. Where do you see business going in 2010?
Consumers will continue to look for value, as well as having concern for the total environment. Retailers can benefit by assorting their floors with differentiated products to meet the ever-changing moods and minds of the consumer. To weather the storm, we all need to be focused on balance sheet strength, and cash flow to be here when the recovery begins, to accommodate the growth.
What message would you like to give the industry for 2010?
I believe our team is ready for the challenges ahead, as they have been for the past two years. We will continue to uncover new opportunities, show our customers we value their business, and continue to give them product, merchandising and promotional reasons to do business with Beaulieu. A positive attitude goes a long way to overcoming adversity.
So we will be working on continually improving the quality of life for our Beaulieu associates and better serving our customers.
We’re all looking forward to 2009 getting smaller and smaller in the rear view mirror. Specifically for our industry, carpet was down much more than expected. New Housing was down 70% and Existing Home Sales were down 40%. Add to that lower consumer confidence, higher savings and deferred spending on big-ticket items, and carpets were down 20% for the year. Recently, Residential is down less but Commercial is down even more. We’ve seen growth continuing in polyester products, particularly BCF, with some recovery of nylon BCF; and all at the expense of spun nylon and PP.
Normally in an economic downturn, we see fall-off in sales for mid-priced carpets, with the low-end and high-end holding their own. This time however, we’ve seen the high-end affected to a degree, as well as the mid-priced carpets.
Going forward into 2010, things will start to look a little brighter. There are various forecasts projecting housing up anywhere from 5% to 15% next year. Unemployment is still expected to be in double digits, with foreclosures continuing, and the commercial sector continuing to decline. We have expected business to recover by Q4 this year, but it’s not happening yet. Units are starting to move ahead, but dollars are lagging. Look for flat business in the first half, and modest recovery in the second half of 2010. There should be a more robust recovery in 2011, if the banking situation is resolved.