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

Scott Group Acquires Hokanson Carpets   Full Article
Grand Rapids, MI, Sept. 15, 2014 -- Michigan-based Scott Group Custom Carpets said it has acquired Texas-based Hokanson Carpets.

New York Manufacturing Improves at Faster Rate   Full Article
New York, NY, Sept. 15, 2014 -- Manufacturing conditions in the New York area improved at the fastest rate since October 2009 in September, according to the New York Fed.

Inmates Learn Concrete Polishing in Jail   Full Article
Madisonville, KY, Sept. 15, 2014 -- Hopkins County Jail was looking for a solution to replace tiles throughout the facility when head jailer Joe Blue decided polished concrete was a viable option.

Housing Not Adequate for Wave of Boomers   Full Article
Cambridge, MA, Sept. 15, 2014 -- America’s older population is in the midst of unprecedented growth, but the country is not prepared to meet the housing needs of this aging group, concludes a new Harvard report.

Domotex Asia Set for March 24-26   Full Article
Shanghai, China, Sept. 12, 2014 -- Domotex Asia/Chinafloor will be held March 24-26 in Shanghai.

Retail Sales Increase Broadly in August   Full Article
Washington, DC, Sept. 12, 2014 -- U.S. retail sales rose 0.6% in August, as consumer bought automobiles and a variety of other goods, according to the Commerce Department.

Consumer Sentiment Highest in More Than a Year   Full Article
Ann Arbor, MI, Sept. 12, 2014 -- U.S. consumer sentiment rose in September to its highest level in more than a year, according to the Thomson Reuters/University of Michigan index.

Greenberg Fund Awards Two Scholarships   Full Article
Manchester, NH, Sept. 12, 2014 -- CCA Global Partners has announced the recipients of two $5,000 scholarships through the Alan Greenberg Scholarship Fund.

Dover Rug & Home Opens Boston Showroom   Full Article
Boston, MA, Sept. 12, 2014 -- Dover Rug & Home has opened a second location in Boston in the Back Bay.

Armstrong Headquarters Gets LEED Recertification   Full Article
Lancaster, PA, Sept. 11, 2014 -- Armstrong World Industries said its corporate headquarters building has been awarded LEED Platinum recertification from the U.S. Green Building Council.

Shaw Contract Names Winners of Design Contest   Full Article
Cartersville, GA, Sept. 11, 2014 -- Shaw Contract Group announced the winners of its annual Design is… competition.

Initial Unemployment Claims Rise Last week   Full Article
Washington, DC, Sept. 11, 2014 -- Initial claims for unemployment benefits rose to 315,000 last week, up from the previous week's revised total of 304,000, according to the Labor Department.

Dal-Tile Holding Groundbreaking for Tennessee Plant   Full Article
Dickson, TN, Sept. 11, 2014 -- Dal-Tile is scheduled to hold an invitation-only groundbreaking ceremony this afternoon for its new $180 million plant in Dickson County, according to the Tennessean newspaper.

Foreclosures Edge Higher in August   Full Article
Irvine, CA, Sept. 11, 2014 -- Foreclosures rose in August the first time in nearly four years, according to tracking firm RealtyTrac.

CFI Presents Awards at Annual Meeting   Full Article
Kansas City, MO, Sept. 11, 2014 -- The Certified Floorcovering Installers recently presented awards at its annual convention.

Tandus Centiva's Ethos Certified Cradle to Cradle   Full Article
Dalton, GA, Sept. 11, 2014 -- Tandus Centiva said it has been Cradle to Cradle Certified Silver for its Ethos modular soft surface products by the Cradle to Cradle Products Innovation Institute.

Wholesale Inventories, Sales Rise in July   Full Article
Washington, DC, Sept. 10, 2014 -- Wholesale inventories ticked up in July by the smallest amount in a year, according to the Commerce Department.

NAHB Praises Legislation to Limit EPA, Army Corps   Full Article
Washington, DC, Sept. 10, 2014 -- The National Association of Home Builders has commended legislation that would limit the authority of the EPA and the U.S. Army Corps of Engineers over "waters of the U.S."

Mortgage Applications Decline Last Week   Full Article
Washington, DC, Sept. 10, 2014 -- Mortgage application volume fell last week as interest rates rose for the first time in four weeks, according to the Mortgage Bankers Association.

Bona Opens Training Center in Dallas   Full Article
Aurora, CO, Sept. 10, 2014 -- Bona US said it has opened a new regional training center in Dallas.