Dan Frierson, president and CEO of the Dixie Group: Focus on Leadership
Interview by Kemp Harr
Dan Frierson, president and CEO of The Dixie Group, has been one of the most prominent industry leaders for decades. In 1966, having earned an undergraduate degree in history and an MBA from the University of Virginia, he started his career with Dixie Yarns, and he drove the transformation of the company from a focus on apparel textiles over to middle to high-end carpet production. He has served as chairman of The Dixie Group, which is headquartered in Chattanooga, Tennessee, since 1987. Last year, while the carpet industry was up by around 5%, Dixie managed nearly 30% growth.
Leadership skills can shine through in many different ways. There are the obvious performance measures like bottom line growth or marketshare gain, and then there are more subtle attributes that extend beyond what’s in an annual report. Picking the right people and empowering them to work hard and make the right decisions requires a skill set that doesn’t often come naturally and certainly doesn’t pass genetically from one generation to another. Moving the right men on the chess board of business in the right sequence not only requires visionary skills and an affinity for calculated risk, but it also requires people skills. Anyone who has ever spent time with Dan knows that his calm demeanor, inquisitive nature, generous spirit and gentlemanly stature put him heads and shoulders above many of the managers that hold leadership positions in the floorcovering industry.
Dan was born and raised in Chattanooga, where he is known as much for his professional role as he is for his philanthropy and support of the community. He and his wife, Joan, raised five children on Lookout Mountain, a suburb of Chattanooga, and they now have nine grandchildren.
Q: What are the key reasons that Dixie has been able to outpace the market in the past couple of years in both the residential and commercial sectors?
A: We were fortunate to renegotiate and extend the maturity of our long-term debt in the third quarter of 2008. This allowed us not only to weather the storm of 2008-2009 but then, from 2011 to 2013, to invest in the future through new technology, new products made from new innovative fibers, and in people. We added people with skills that we needed and have increased the size of our sales teams to serve our customers better and support our brands. Due to the severity of the downturn, many of our competitors were unable to invest in the future, and therefore, they have not experienced the upward momentum, which we, and others who were able to invest, have experienced.
Q: What strategic initiative drove Dixie to decide to buy Atlas Mills?
A: Atlas, like Dixie, is well known for its outstanding style and design in the marketplace. This acquisition makes The Dixie Group a more substantial player in the contract commercial market.
Q: How do you integrate that business without giving away the benefit that it brings to your mix at Dixie?
A: Atlas will continue as a separate brand in the commercial market. Its position in the commercial business will be similar to that of Fabrica in the residential business. We will consolidate our dye houses in California, but Atlas will maintain its own identity.
Q: With this decision to buy Atlas, you have contributed to the continued consolidation of the floorcovering business. Is there still a place for a nimble small to medium size player in this market? How can they compete?
A: I believe there will always be a place for new entrants into the business if they indeed bring something to the market that is new or different. Unfortunately, entering the market is more expensive than ever, but it can be done.
Q: What drove Dixie’s decision to shift its focus from making apparel yarns to making carpet?
A: It became very evident to us in the early ’90s that the traditional textile industry was under siege and would not survive long term. In order to obtain value for our textile assets, we went through a series of transactions to sell our facilities to the most interested buyers. Simultaneously, in 1993 we began purchasing carpet companies because we felt this industry would continue to grow and not be impacted adversely by imports. We finished selling our textile assets in 2000 and have now made 12 acquisitions in the carpet business. Most of the traditional textile plants we sold are no longer in operation, largely due to the international competitive situation.
Q: As you look back on your career, tell us about one of the riskiest decisions you made and how it turned out.
A: Undoubtedly, the riskiest decision was to leave the business that we had been in for 70 years. Although it was risky, sometimes the greater risk is doing nothing.
Q: Will Dixie always be focused on soft surface floorcovering products only?
A: Today we see ample opportunity for growth in the soft floorcovering business. Therefore, we have concentrated our time and investment there. It is difficult to predict what changes may occur in the flooring business. Our experience in leaving the traditional textile industry has taught us never to say never. We will continue looking for and investing in those opportunities that we believe will enhance shareholder value.
Q: Give us your thoughts on where branded carpet fiber fits in today’s carpet market. What are the advantages and disadvantages of supporting it?
A: We are certainly a believer in branded fiber for the carpet market, particularly if it provides superior style and design opportunities and enhanced performance for the consumer. Today, branded fiber fits best in the upper end portion of the market. One of the disadvantages is that it limits the ability to meet certain price points that are important to our retail customers. Maybe someday branded fiber could appeal to a greater spectrum of the marketplace.
Q: It’s no secret that you are now one of the largest players in the wool carpet market. What is your recipe for growth and do you think this market will continue to grow?
A: We started our effort into the wool market in 2007 and 2008 through Masland Residential and Fabrica. Despite the downturn, our wool business has grown every year since then, and we made the acquisition of Robertex last year. We believe we bring a larger product offering and the advantage of selling and servicing the business through an experienced salesforce and a strong support group. We think a natural fiber has genuine appeal to many environmentally sensitive customers, along with excellent product performance. I will be surprised if the wool carpet market does not continue to grow.
Q: When you are hiring people to work for Dixie, what do you look for?
A: In addition to the skills that are needed to fill a particular job, we are looking for people who truly enjoy what they do, have a strong team inclination, and will be comfortable in our culture. It is very important that new people at Dixie understand our value system and share the same.
Q: How much longer do you plan to play an active role in this business?
A: I’ll always have a keen interest in whatever happens at Dixie, but, obviously others have begun doing more, and will continue to.
Q: Do you think your son, Kennedy, made a smart move to follow your footsteps into this business? Why?
A: I was very fortunate to join Dixie after graduating from business school and work for a number of years with my father. The relationship builds, matures and changes over time, but can be a most gratifying one. My only word of caution is that if the relationship is not good at the start, it probably will not improve over time.
Q: You are often characterized as the “gentleman leader” within this business. How did you achieve that reputation and what advice do you have for the young people entering the business today?
A: It is having a true interest in other people, and what they’re doing and how they do it, and what’s important to them, and if you’re interested in other people, then you enjoy those types of conversations.
Q: What do you do to relax when you aren’t focusing on the business?
A: I’ve always said if you enjoy your work, work isn’t work, if you enjoy it enough. I literally enjoy every day, and look forward to meeting the day and getting going. But over the years, I used to play tennis, used to play a fair amount of golf, loved to go hunting. I guess I would characterize myself not as an expert in anything, but as a jack-of-all-trades in terms of enjoyment.
Being outdoors is big. I have a place on the mountain, and I spend a lot of time out there with my children and grandchildren, and we have a lot of fun together. We have a big family, five children, and now, nine grandchildren, so we have a lot of activity.
Copyright 2014 Floor Focus
Related Topics:RD Weis, The Dixie Group, Masland Carpets & Rugs