Commercial Resilient: Industry Update - Feb 2013

By Darius Helm

 

It wasn’t too long ago that the U.S. resilient flooring industry was run by a handful of U.S. producers along with a small group of importers. But over the last few years, in part due to the rise of luxury vinyl and glass-backed sheet goods, several new players have entered the market, including well-established foreign producers like IVC and Gerflor and several luxury vinyl producers based in Asia. And in the last couple of years, some of the big carpet mills have started adding commercial resilient lines in a move to secure new share territory in the commercial flooring market.

One of the most interesting aspects of the commercial resilient flooring business is the range of products and how they’re each facing different conditions in the market. Some product categories are closely linked to specific markets, like homogeneous sheet vinyl in the acute care segment. Others, like LVT, are enjoying widespread demand and penetrating multiple segments. VCT is losing share, and some of that is going to LVT. Heterogeneous sheet goods are faring relatively well, with the new generation of realistic faux looks, particularly wood, helping to grow the category in sectors that are evolving from institutional looks to warmer nature-based decors. That includes all healthcare sectors—acute care, medical office buildings and senior living—as well as the education sector. 

However, within the heterogeneous category, felt-backed sheet goods are losing share to glass-backed goods. It’s occurring more rapidly in the residential market, but there are parts of the commercial market where the cushioned glass-backed goods are making inroads. One such sector is senior living, where the cushioning is critical.

Then there’s linoleum, the greenest of all the resilient flooring products, with sales also driven by demand for its unique styling. Linoleum, which celebrates its 150th anniversary this year, has been faring well in the commercial market, but as the first stirrings of environmental sustainability sweep through the vinyl flooring industry, linoleum may well be facing renewed competition (see box on page 54).

STANDARDS AND CERTIFICATIONS
When it comes to sustainability, there are a few ways to look at the resilient category. One is to examine the specific flooring types, since even the different vinyl flooring products have distinct green profiles and can face significantly different environmental hurdles from each other, as well as what the various manufacturers are doing with those products. Another is to look at the category itself, where great progress has been made in the last few years with standards and certifications. 

Most of the resilient players have some form of single-attribute certification, FloorScore or Greenguard for Children and Schools. For the big firms like Mannington, Tarkett and Armstrong, most of their products are also certified to the NSF 332 multi-attribute assessment standard. And with the introduction of the product category rule for flooring, developed by NSF International in collaboration with the various flooring industry groups, the path has been laid out to develop environmental product declarations (EPDs), which are akin to nutrition labels on food, enabling end users to make informed decisions.

The Resilient Floor Covering Institute (RFCI) has a two-part mission—to protect its members’ markets and to enhance its members’ ability to go to market. The first part of the mission is all about issues management, and the main focus of concern right now is the development of LEED v4. The RFCI is currently going over the fifth draft, released in October, to ensure that it does not discriminate against certain materials (like PVC or plasticizers) without examining all of the science and making sure that all the stakeholders have been heard.

The big concern when it comes to PVC is that emotions can run high and often eclipse some of the critical issues. Phthalate plasticizers, for instance, are a big concern, and some have been shown in lab animals to be endocrine disruptors. While the types of phthalates implicated in scientific studies, like DEHP, are not used in vinyl flooring, that hasn’t stopped some environmental groups from pushing to have all phthalates banned, whether or not there’s evidence of hazard. 

This has even led to some absurd decisions. Most prominently, Kaiser Permanente, which is in the hospital and medical clinic business, came out with a directive ten years ago that it would no longer specify vinyl flooring. So even though the equipment and materials that actually came into contact with patients (catheters, IV bags, even artificial heart valves) were made of vinyl, the one part of its facilities that never really comes into direct contact with patients, the floors, were made vinyl free.

Following several years of this hypocrisy, in January 2012 Kaiser finally agreed to tackle IV bags and tubing. While the IV bags are now made of a non-PVC polymer, the tubing is still PVC, but without the offending phthalate, DEHP—a phthalate abandoned long ago by the flooring industry.

Such flawed and ineffective decisions have understandably raised the hackles of those in the vinyl flooring business, and some of the stakeholders believe that the U.S. Green Building Council (USGBC), which creates the LEED programs, is not really as consensus based as it is made out to be. They claim that the USGBC pays less attention to the concerns of stakeholders if they are on the manufacturing side.

The RFCI is also proactively boosting the prospects of its members, and it’s doing that by promoting standards and certifications. The RFCI is working with the EPA and the Whole Building Design Guide, a program of the National Institute of Building Sciences, to bring together manufacturers from a range of categories, including flooring, wallcovering, roofing, and vinyl siding.

With the North American PCR now in place, the RFCI has been focusing on the development of product category EPDs. The group is currently working on the second stage of the process, conducting and verifying lifecycle assessments (LCAs). Data collection is 95% complete, and by late spring the group anticipates that all the LCAs will be verified and published for six resilient flooring categories: VCT, vinyl tile (which includes luxury vinyl tile and solid vinyl tile), homogeneous sheet vinyl, heterogeneous sheet vinyl, rubber flooring and linoleum.

MANUFACTURERS GOING GREEN
There’s also been a lot of environmental activity at the manufacturer level, aside from all of the certifications. One hopeful development is that the three major VCT producers—Tarkett, Mannington and Armstrong—all have reclamation programs in place. Because of the high filler content in VCT (generally over 80%), there’s a lot of room to put reclaimed product back into new VCT. The trick has been figuring out how to recapture the product. Mannington draws on projects within a few hundred miles of its location in southern New Jersey, while Tarkett focuses on the region surrounding its Azrock operation in Texas. Armstrong probably has the best set-up, since it has three manufacturing facilities to serve as hubs: one in the Southeast, one on the West Coast and one in the central part of the nation.

Another major trend among vinyl players is in the development of phthalate alternatives. Leading the way is Tarkett, which now uses non-phthalate plasticizers on all resilient flooring products made in North America. Its European plants are in the process of converting, with homogeneous sheet goods using the new plasticizer and heterogeneous sheet still to come. Tarkett’s Centiva uses the product on its Victory homogeneous tile line, which only uses post-industrial recycled content. The two heterogeneous tile lines, Event and Contour, have post-consumer content in the backing, which means there are older plasticizers in there as well.

In addition, Shaw is introducing DOTP (dioctyl terephthalate) on its gluedown LVT products, and it’s even using DOTP on its Quiet Cover and Native Origins LVT, which feature 72% recycled content, including 39% post-consumer content, by using it in the wearlayer and essentially encapsulating the older phthalates captured in its recycling process. (DOTP is considered much safer than the ortho-phthalates traditionally used with PVC.) Metroflor is also using DOTP on most of its products. FreeFit, which makes loose lay luxury vinyl, uses a non-phthalate plasticizer. Gerflor uses a bio-based plasticizer on its Symbioz product, and is working on developing the plasticizer for other product lines.

Armstrong is currently researching its options. Its bio-based, PVC free Migrations and Striations composition tile are phthalate free. Mannington is also looking into alternatives. 

Just a few years ago, it was hard to find a vinyl flooring with recycled content, and now all the big players and many of the smaller ones have post-consumer or post-industrial content in their flooring, and often both. The list includes Shaw, Mannington, Tarkett’s Centiva and Azrock, Armstrong, Gerflor, Parterre, Flexco, IVC, Roppe and Lonseal.

Rubber producers face a different set of challenges, because, unlike vinyl, their product, which is an emulsion rather than a thermoplastic, cannot be remelted to make new product. Instead, it has to be recycled into other products. Fortunately, rubber has a long, low maintenance lifecycle, which adds to its environmental profile.

Roppe, which makes both rubber and vinyl products, has a rubber reclamation program called Impact that has been in operation for about three years. So far, the program has reclaimed nearly 8,000 tons of product, which is then turned into products used in municipal mulch and artificial turf, among other things, through a recycling partnership.

Ecore, which makes a range of recycled rubber products, including the EcoSurfaces commercial flooring brand, processes 50 million pounds of rubber tires every year, using everything from shredders to magnets to remove steel wire and impurities.

HIGHLIGHTS OF THE YEAR
The biggest news in the last year in the commercial resilient industry has been the two high profile acquisitions. First, in March, Mannington acquired Amtico, giving the firm a dominant share of the U.S. LVT market as well as a strong global position. Then, in September, Tarkett acquired Tandus, a leading commercial carpet mill. One of the end results of the acquisitions is that the two companies now have eerie surface similarities, even though on a deeper level they couldn’t be more different. However, they’re each both a major resilient and hard surface producer, covering a wide range of product categories, and a major commercial carpet business.

The other big industry news in the commercial resilient industry has been the increasing involvement of the big mills. For years, the only major carpet mill involved in resilient flooring was Mohawk, which distributes Congoleum products. But now Shaw Contract is in the business with LVT and sheet goods, along with Patcraft. And Beaulieu’s contract business, Bolyu, now sells luxury vinyl from Canada’s LSI exclusively in the U.S. And then there’s Tandus, now part of Tarkett and being merged into Centiva. There are concerns in the industry that the big mills are in a position to undercut the pricing of established suppliers. Some of the smaller producers have seen their margins shrink in the last couple of years, as they have resisted raising prices in order to remain competitive.

Tandus and Centiva both go direct to specifiers, while Tarkett’s other resilient commercial offerings go through distribution, so it makes sense for them to join forces to create a high design portfolio of both carpet and luxury vinyl. Glen Hussmann, president of Tandus, will run both operations after Thomas Trissl, Centiva’s founder and president, steps down in a couple of months.

Tarkett’s other commercial operations include its rubber flooring, linoleum, wall base, accessories, VCT, solid vinyl tile, vinyl enhanced tile and both homogeneous and heterogeneous sheet. Last year, most of the growth was in rubber, homogeneous sheet and wall base, while linoleum and VCT business was sluggish. Its biggest commercial market is healthcare, followed by education, then retail. After that, it’s hospitality, which was an active and growing market last year—and this year should bring more of the same.

Mannington’s acquisition of Amtico nearly a year ago brought LVT in-house—before that, the firm had been outsourcing both its commercial and residential LVT. In North America, Amtico’s products are sold through the Amtico Collection under the Mannington brand, with one combined sales force for all resilient and commercial carpet. However, Amtico also has a substantial international operation, with production in the U.K. and substantial sales in Europe, followed by Latin America, Asia and the Middle East. Those businesses will for now continue to sell product under the Amtico brand.

Mannington is also a leader in the evolution of heterogeneous sheet goods. Introduced at NeoCon 2011, its Vivendi product, which features a linen texture, is an example of the new level of styling emerging in this category.

In addition, Mannington has a substantial rubber business, and later this quarter the firm will introduce its first rubber sheet, a 3mm product. And in the second quarter, Mannington will formally launch Enlighten, a sheet product that’s a composite of rubber and polyolefin.

Shaw Contract is now in its third year in the commercial resilient business, which offers heterogeneous and homogeneous sheet goods, along with gluedown and floating LVT. The firm’s Quiet Cover LVT with its InStep Locking System won a NeoCon Gold in the hard surface category at last year’s NeoCon. According to the firm, one sector where its floating products are doing surprisingly well is multi-family, thanks to both the silencing layer that gives the product its name as well as the modularity (and ease of replacement) of the floating tiles. 

Sister company Patcraft also offers both luxury vinyl and sheet goods, both heterogeneous and homogeneous. Most of its LVT and heterogeneous sheet products feature wood looks.

Bolyu, the commercial division of Beaulieu of America, offers luxury vinyl from LSI, a Toronto based firm. The LVT styles are designed to coordinate with Bolyu’s carpet offering. Bolyu has an exclusive with LSI in the U.S. market.

Armstrong, the biggest resilient producer in North America, offers four primary resilient categories: linoleum, luxury vinyl, commercial sheet and VCT, which also includes the firm’s olefin and bio-based tile offering (BBT), Migrations and Striations. VCT is the firm’s biggest category.

The VCT and BBT are made in the U.S., while the firm’s homogeneous sheet goods are made in one of its German facilities and its heterogeneous sheet comes from Asia via a manufacturing partnership. Its linoleum is also made in Germany, by DLW.

In terms of volume, its biggest commercial sectors are retail and education, followed by healthcare, though by value healthcare is biggest because retail and education use a lot of low cost VCT.

A growing sector for Armstrong is senior living, and the firm recently started producing a light commercial product for that market at its Lancaster, Pennsylvania facility. The product, called Abode, is a glass-backed sheet vinyl with a residential feel in both design and cushioning, but with a higher level of performance and durability than is found in residential products.

IVC US has attracted a lot of attention in the last couple of years with its construction of a massive sheet vinyl facility in Dalton, with a capacity of over 320 million square feet a year, targeting the residential market. However, IVC is also getting into the commercial resilient business. The firm has a specified commercial brand, Itec, along with a mainstreet commercial offering called Blueprint. Both are glass-backed sheet programs made in Dalton.

About a year ago, the firm also completed an LVT facility in Belgium, allowing it to make its luxury vinyl in-house. The firm’s Moduleo LVT program, launched a couple of years ago, is now being completely revamped using product made in the Belgian facility, and a new collection was rolled out at last month’s Surfaces show. It’s mostly residential, but a commercial collection will follow. The Itec collection has also been completely restyled. 

Roppe makes both rubber and vinyl products, with rubber accounting for about three quarters of the firm’s business. Its main commercial sectors are healthcare, education and retail, along with corporate and hospitality. Its products are generally specified for their high performance in utilitarian functions.

Last year, the firm saw good growth in its rubber flooring in the education sector, while its LVT products were in demand in both the healthcare and retail markets. All three sectors are looking good so far this year. The firm is particularly gearing up for growth in the retail sector.

Ecore, the recycled rubber leader, has been particularly busy in the last year. At NeoCon 2012, the firm came out with a line of rubber tiles designed by Maurie O’Neill of O2 Strategies in a range of sophisticated neutrals, which should open up whole new markets for the firm. The Studio collection targets sectors like higher end corporate, retail, university and hospitality.

Last year, Ecore also introduced its Itstru technology for bonding its cushioned rubber product to a range of flooring types, including carpet tile, with a sophisticated lamination system using a film layer. Because the backing is made of 100% post-consumer recycled content, firms using the product to back their products immediately have a floorcovering that can compete with the greenest products on the market—so it should be particularly enticing to some of the smaller flooring manufacturers that have had trouble competing on sustainability against the big players.
CBC Flooring goes to market with several brands, the most prominent of which are Toli and Halo. Toli makes sheet vinyl, LVT and homogeneous vinyl tile that’s equivalent to VCT. Halo makes all LVT. There’s also Indelval, a rubber sheet and tile line from Argentina; Salto, a VCT producer based in Mexico; and Ceres, a polyolefin resilient program for both sheet (Wels Sheet) and tile (Sequoia).

The firm is now coming out with a new brand for the U.S. market called Takiron, with a range of specialty products, including slip resistant flooring. Both MT Sheet from the Toli brand and Wels Sheet from the Ceres brand will go to market under the Takiron brand—they’re both made by Takiron.

Flexco, a domestic producer of rubber and vinyl flooring, goes mostly to the healthcare, education, retail and hospitality sectors. The firm, which has been in the flooring industry for more than 60 years, came out with Natural Elements, a line of luxury vinyl wood and stone looks, a couple of years ago, and it’s been a big success. The products feature 72% recycled content. Also doing well are its rubber tile and sheet lines.

Parterre Flooring, a luxury vinyl producer based in Wilmington, Massachusetts, on the outskirts of Boston, just came out with Astronomie II, its second collaboration with Bentley Prince Street. The firm, which is 22 years old, has experienced double digit growth for the last couple of years, and it’s already outgrown its Massachusetts office and warehouse, which are now being doubled. The firm also has warehouses in New Jersey and California.

Parterre’s products are made in Taiwan through an exclusive partnership. The facility, located just outside of Taipei, makes the bulk of its products for Parterre (83%) and also sells some product to the Taipei metro market. Parterre’s strongest segments last year were healthcare and multi-family—in the multi-family market, Parterre’s products are used as upgrades to the existing base grade products. Last year, Parterre supplied the floor for the Long Island chapter of the USGBC in Hauppauge, New York. Its luxury vinyl was installed in the reception area and hallway.

France’s Gerflor has one of the widest resilient product ranges in the world. In the U.S. the firm has been focusing on the healthcare, retail and senior living sectors, and recently it’s also been finding traction in office environments. The firm sells both sheet goods and luxury vinyl to the U.S. market. Its LVT offering includes a click system product and Saga2, which is more of a hybrid, with an LVT face and a back made of recycled PVC and cork fused with a stabilizing layer. The product, which is much more flexible than traditional LVT, comes in 20” squares and is in demand mostly in medical office buildings, and it’s also being specified in retail and corporate.

The firm’s best selling sheet product, Taralay, is also a hybrid of sorts, with a heterogeneous back and a homogeneous face.

Metroflor, based in Connecticut, goes to market with a range of luxury vinyl products—most notably Konecto and Metroflor. The firm has been rebuilding its dry back LVT lines, including Artistek and Metroflor, and adding new designs. Nearly all of the firm’s products use DOTP as a plasticizer.

Karndean supplies the U.S. market with a range of luxury vinyl products, including a glue-down, a loose-lay and its Iobac products, that attach magnetically. One of Karndean’s big advantages is its price point range that allows its products to be specified in more applications than most luxury vinyl producers can manage. The firm’s U.S. headquarters are in Pittsburgh, Pennsylvania. The firm also has a big showroom in Las Vegas, and last month it opened a 56,000 square foot distribution center in Dallas. The product is made in Asia.

Karndean has been in the business for 40 years. Last year, the firm hired John Bonney, previously with Centiva, to run its commercial division. The firm’s products are made in Asia.

Lonseal manufactures its heterogeneous no-wax sheet goods in Japan and serves several commercial segments in the U.S. market. One of its biggest sectors is healthcare, and its products are also used in fitness applications, transportation and corporate. However, the firm doesn’t do that much in the education sector, which is more price sensitive.

Last year U.S. business was up, though not by a lot. However, this year more growth is anticipated, as the volume of projects seems to be growing. Last November, Lonseal came out with Loneco Linen, a textile look made with 50% post-industrial content and wood powder.

FreeFit, which has been in the U.S. market for four years with its loose lay luxury vinyl, does more than three quarters of its business in the commercial sector. The brand is manufactured by Hong Kong’s GTP International, and the U.S. is the global firm’s biggest market.

Last year, FreeFit’s U.S. business was up. The firm continued to add to its distribution base in North America—the only region it’s still completing is the upper Midwest. At last month’s Surfaces, the firm introduced Massimo, a larger tile format, and FreeForm, a residential version of FreeFit that’s 3.2mm thick instead of 4mm and features a wearlayer of 12 mil, rather than 20 mil.



LINOLEUM: 1863-2013

TThis year, linoleum turns 150 years old. It was invented more or less by accident by Frederick Walton, an Englishman in search of an alternative to Indian rubber. He started his experimentation in 1855 and, as he struggled to figure out how to produce the material he started coating draped fabric with it. In 1863, Walton patented the process, using linseed oil, saw dust and cork flour to create the resilient material, which he used to coat "suitably strang fabric."

Within a year he had established the Linoleum Manufacturing Company Ltd. in a factory near London. Other inventors began experimenting, some circumventing his patent. For some reason, the Scottish town of Kirkcaldy became a center for linoleum production, and within a few years it was the largest producer in the world, led by Michael Nairn & Co., a floor cloth producer.

Linoleum cam to the U.S. in 1872, to a town in Staten Island that for a time became officially known as Linoleumville—it's called Travis now. Soon after, Michael Nairn set up an operation in New Jersey that ultimately became the Congoleum Corporation of America.

However, linoleum really took hold in the U.S. once Armstrong, which at the time was the world's largest cork company, started producing the product in Lancaster, Pennsylvania in 1909. The firm used its marketing savvy and by 1913 was producing print ads for the product.

Forbo, which is today the largest linoleum producer in the world, grew out of an alliance between a handful of linoleum producers in 1928, forming the Continentale Linoleum Union. That alliance originally included DLW, which later split from the group and is now part of Armstrong. The group was renamed as Forbo in 1974 and today produces a wide range of resilient and hard surface products, including vinyl flooring and Flotex, a flocked nylon product.

Tarkett's history with linoleum also goes back to the product's roots. The Dominion Oil Cloth Company, founded in Canada in 1872, started off producing a floorcovering made of jute coated in paint, and within a few years it was instead producing linoleum. That company became Domco, which later acquired Azrock and Nafco before itself being acquired by Tarkett in 1999.

Midway through the 20th century, vinyl flooring was invented, and it quickly took share from linoleum, which first fell from grace, then began to recover as a niche commercial product and most recently has seen its profile elevated with the advent of environmental sustainability, as the only fully bio-based and rapidly renewable resilient flooring.

While there's no longer any North American production of linoleum, Forbo, Armstrong and Tarkett all have European production and are global leaders in the resilient flooring category (Forbo is the largest global linoleum producer). In addition to its Krommenie facility, Forbo acquired the Nairn facility in Kirkcaldy, Scotland, where it currently makes MCT, its Marmoleum tile. Armstrong's linoleum is manufactured by its DLW subsidiary in Germany. And Tarkett makes its linoleum sheet in its facility in Narni, Italy.

According to Market Insights LLC, linoleum imports to the U.S. have been surging in the last several years. Back in 2007, estimated U.S. imports topped $24.3 million, and between 2007 and 2011, imports grew an average of nealy 20%, despite the commercial slowdown in 2009 and 2010, reaching $48.9 million in 2011. However, it looks like the market fell in 2012, perhaps by over 20%, with imports from the U.K. down the most. Some of the weakness may be a natural correction after growth of over 20% the previous year. It's also possible that commercial vinyl is growing stronger. We'll see what next year's numbers reveal. 


Copyright 2013 Floor Focus 



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