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

Curacao Firm Develops New Locking System   Full Article
Willemstad, Curacao, July 7, 2014 -- Innovations4Flooring, a technology company formed last year to supply flooring installation products, said it has developed a unique locking system for flooring.

UK Carpet Recycling Presents Awards   Full Article
Birmingham, England, July 7, 2014 -- Inspiration for manufacturers to design new carpet products for recycling or reuse at end of life was a key theme at Carpet Recycling UK’s sixth Annual Conference.

Estillon Wins Export Award in Netherlands   Full Article
Uden, The Netherlands, July 7, 2014 -- Estillon, a provider of subfloors, carpet underlays and accessories, took third prize for the Fenedex Frank Hauwert Trophy.

Mortgage Rates Lowest Since Last October   Full Article
Washington, DC, July 7, 2014 -- Mortgage rates hit 4.12% for a 30-year fixed rate last week, according to Freddie Mac.

Services Sector Growth Slows Slightly in June   Full Article
Tempe, AZ, July 3, 2014 -- Growth in the services sector of the economy slowed slightly in June, according to the Institute for Supply Management services index.

Planned Job Cuts Tumble in June   Full Article
Chicago, IL, July 3, 2014 -- Planned job cuts announced by U.S. companies in June fell to 31,434, the lowest level of the year and down 20% from a year ago, according to outplacement firm Challenger, Gray & Christmas.

Economy Adds 288,000 Jobs in June   Full Article
Washington, DC, July 3, 2014 -- Employers added 288,000 jobs in June, the Labor Department said Thursday.

Cersaie Show Set for Sept. 22-26 in Bologna   Full Article
Bologna, Italy, July 3, 2014 -- Cersaie—the world’s largest exhibition of ceramic tile and bathroom furnishings—will take place at the Bologna Exhibition Center in Bologna, Italy from Sept. 22-26.

NAFCD Issues Employee Compensation Report   Full Article
Chicago, IL, July 3, 2014 -- The North American Association of Floor Covering Distributors has released the 2014 NAFCD Employee Compensation Report.

E.J. Welch Promotes Two to Vice President   Full Article
St. Louis, MO, July 2, 2014 -- E.J. Welch Co. has promoted two employees to full time management positions.

Factory Orders Fall in May   Full Article
Washington, DC, July 2, 2014 -- Factory orders fell 0.5% in May, largely because of fewer orders for military goods, the Commerce Department said.

Private Sector Adds 281,000 Jobs in June   Full Article
Roseland, NJ, July 2, 2014 -- Private sector employment increased by 281,000 jobs from May to June, according to the June ADP National Employment Report.

Goodman, CEO of Space Flooring, Retires   Full Article
Glen Burnie, MD, July 2, 2014 -- Kent B. Goodman, owner and CEO of Space Flooring, has retired, according to distributor Haines.

Mortgage Application Volume Falls Last Week   Full Article
Washington, DC, July 2, 2014 -- Mortgage application volume fell slightly last week, according to the Mortgage Bankers Association.

Kinetex Wins Grand Prize for Innovation   Full Article
Dalton, GA, July 2, 2014 -- Kinetex textile composite flooring won the Grand Prize for Flooring Solutions in the 19th Annual Product Innovations Awards presented at NeoCon.

Interior Specialists Acquires Las Vegas Flooring Firm   Full Article
Carlsbad, CA, July 2, 2014 -- Interior Specialists, a provider of interior design and installation services for the homebuilding industry, said it has acquired DelGrosso Floor Covering in Las Vegas.

Tile Shop Holdings Names New CFO   Full Article
Minneapolis, MN, July 2, 2014 -- Tile Shop Holdings has named Kirk Geadelmann as its new chief financial officer.

FCICA Launches Commercial Installation Certification   Full Article
West Bloomfield, MI, July 1, 2014 -- FCICA, the Flooring Contractors Association, is launching an online certification program for all commercial flooring installation managers regardless of their affiliations.

Domotex Russia Set for April in Moscow   Full Article
Hannover, Germany, July 1, 2014 -- Domotex Russia will be held April 1-3 in Moscow.

Manufacturing Continues To Expand in June   Full Article
Tempe, AZ, July 1, 2014 -- Growth in the U.S. manufacturing sector slowed slightly in June, according to the Institute for Supply Management.