20 Years: Then and Now - July 2012

 

In 1992, the U.S. economy was coming out of a recession brought on by the savings and loan crisis and the first Gulf war. George H.W. Bush was in the last year of his first term as president of the country, though he would lose to Bill Clinton that November. 

Like today, the country was lifting out of a period of decline. Low interest rates were encouraging homeowners to refinance, which enabled them to spend more money on new flooring and a president was gunning for a second term. 

The consolidation within the manufacturing sector had already begun, the two biggest of which were Shaw Industries’ acquisition of WestPoint Pepperell’s carpet division in 1987 and Armstrong’s carpet mill purchase in 1990. But it really started to heat up in 1992. In February of that year, Shaw bought Salem Carpet Mills, giving it a combined marketshare of over 30%. Two months later, Mohawk went public at $15 a share and by August had agreed to buy Horizon—which was actually bigger than Mohawk. Shaw turned around and bought Amoco’s polypropylene carpet fiber plant. And in September, Dixie bought Carriage Industries and Queen bought Cumberland Mills. By the end of that year, the amount of carpet sold in the U.S. had increased by 9.6%, proof that the recession was over.
< ;br />Today, just two decades later, the world has changed quite a bit. Economically, we are still at least a year away from any substantial recovery, but at this point analyst Santo Torcivia is predicting 4% growth this year followed by 9% growth in 2013.

Regardless of all that, the landscape of the flooring industry is much different today from what it was in 1992. Today, carpet accounts for 42.8% of sales rather than 62.5% in 1992. Consolidation has continued throughout the 20-year period and there are substantially fewer manufacturers today than there were in 1992. The dominant players today have diversified, as part of this consolidation process, becoming multi-surface providers. 

On the retail front, home centers have not only replaced the department stores but they’ve also taken share from the builder accounts in the single-family construction sector. Today, we estimate there are fewer than 12,000 independent flooring retailers left in the market. The number of distributors has also dropped substantially, but those that are left have streamlined and expanded to run with greater efficiency. 

In the early stages of this 20-year period, the commercial contractor sector went through a major buyout and consolidation, but that has all stabilized now and the professionalism that they bring to the equation is still in high demand. 

Looking forward, there is a lot of change to come. The Internet is already shifting the traditional channels to market—particularly with area rugs. And Interface continues to open company-owned retail stores in the major U.S. markets. 

American consumers have limited free time today and their preference for home furnishings is shifting over toward more durable, low maintenance products—a trend that favors hard surface flooring. 

In the commercial sector, carpet continues to dominate and modular’s share of that mix—especially in the corporate sector—continues to rise. And a once brown industry has turned green.

For the complete 20 Years Then & Now, see the July 2012 issue of Floor Focus Magazine. 

Copyright 2012 Floor Focus

 

 



Other Archived Articles

Unemployment Falls but August Job Gains Muted   Full Article
Washington, DC, Sept. 5, 2014 -- Employers in the U.S. added 142,000 jobs in August, the lowest monthly total of the year, according to the Labor Department.

Horizon Floors Signs Denver Hardwoods   Full Article
New York, NY, Sept. 5, 2014 -- Horizon Floors has a distribution agreement with Denver Hardwoods.

Invista Surfaces Makes Executive Promotions   Full Article
Kennesaw, GA, Sept. 5, 2014 -- Invista Surfaces has promoted Maggie Bidlingmaier to vice president of its residential business.

Gerflor Becomes Starnet Approved Vendor   Full Article
Chicago, IL, Sept. 5, 2014 -- Resilient flooring firm Gerflor said it has attained approved vendor status in Starnet.

USG Signs Private Label Agreement With Powerhold   Full Article
Chicago, IL, Sept. 5, 2014 -- USG Corporation said it has entered a private-label agreement with Powerhold, the largest flooring accessories distributor network in the country.

Shaw Ranked Fourth on E-learning List   Full Article
Dalton, GA. Sept. 5, 2014 -- Shaw Industries ranked fourth on E-learning! magazine’s Learning! 100.

H.B. Fuller Acquires ProSpec Construction Products   Full Article
St. Paul, MN, Sept. 4, 2014 -- H.B. Fuller Company said it has acquired ProSpec Construction Products, a provider of tile and stone installation products.

Builder Hovnanian Says Income Doubled   Full Article
Red Bank, NJ, Sept. 4, 2014 -- Homebuilder Hovnanian Enterprises reported third quarter net income of $17.1 million, or $0.11 a share, up from $8.5 million, or $0.06 a share, a year earlier.

Services Sector Expands at Faster Pace in August   Full Article
Tempe, AZ, Sept. 4, 2014 -- Growth in the services sector of the economy accelerated in August to the highest level since 2005, according to the Institute for Supply Management.

Initial Jobless Claims Still Near Eight-Year Low   Full Article
Washington, DC, Sept. 4, 2014 -- Initial claims for unemployment benefits last week ticked up although claims remain near an eight-year bottom.

Private Sector Job Growth Remains Steady   Full Article
Roseland, NJ, Sept. 4, 2014 -- Private sector employment increased by 204,000 jobs from July to August, according to the August ADP National Employment Report.

CRI's Mendez Named SGAC Board President   Full Article
Dalton, GA, Sept. 4, 2014 -- Carpet and Rug Institute vice president for government relations Jennifer Mendez was named president of the board of directors of the State Government Affairs Council.

Royal Adhesives Acquires Toronto-Based Chemque   Full Article
South Bend, IN, Sept. 4, 2014 -- Royal Adhesives & Sealants said that its subsidiary Royal Adhesives & Sealants Canada will acquire polyurethane foams and adhesives maker Chemque.

Domotex Bringing Back Innovations Event   Full Article
Hannover, Germany, Sept. 3, 2014 -- Domotex is bringing back its Innovations@Domotex for a second season next year.

Factory Orders Increase by Record Amount   Full Article
Washington, DC, Sept. 3, 2014 -- Factory orders rose by a record amount in July, mostly on the strength of commercial aircraft.

Shaw Moves Up on Selling Power List   Full Article
Dalton, GA, Sept. 3, 2014 -- Shaw Industries said it has been ranked no. 13 and is the only flooring manufacturer on the latest Selling Power 50 Best Companies to Sell For list.

Floor Focus Plans to Honor Young Professionals   Full Article
Chattanooga, TN, Sept. 3, 2014 -- Floor Focus Magazine plans to recognize young professionals in the flooring industry who are under 40 years old.

Bona AB Wins Swedish Export Award   Full Article
Aurora, CO, Sept. 3, 2014 -- Bona AB said it has received the Export Hermes 2014 Award.

Rug Market Schedules Set Through 2018   Full Article
Atlanta, GA, Sept. 3, 2014 -- AmericasMart has set the dates for its January and July markets, including its rug markets, through 2018.

Toll Brothers' Profit, Revenue Surge   Full Article
Horsham, PA, Sept. 3, 2014 -- Luxury homebuilder Toll Brothers Inc. reported third quarter net income of $97.7 million, or $0.53 a share, up from $46.6 million, or $0.26 a share, a year ago.