Beaulieu's Karel Vercruyssen: Focus on Leadership Mar 2014
Interview by Kemp Harr
Karel Vercruyssen took the leadership role at Beaulieu America when Ralph Boe ended his 13-year run in that position last month. Belgium-born, Karel studied engineering and business at a university in Belgium and spent the early years of his career in the high tech microchip industry with Alcatel.
In 1994, he transitioned from the high tech to the textile industry with Belgian-based Beaulieu International Group, a move that his engineering comrades questioned. “I don’t think there are that many people who have made that move from high tech to textiles, but I was inspired by the opportunity and the feeling that I could make a true impact,” he says.
After moving to Canada with his family, Karel became acquainted with Mieke De Clerck, daughter of Beaulieu founder Roger De Clerck and current stockholder, through her brother, Francis De Clerck, for whom Karel had worked at Beaulieu International. In 2006, Karel began working for Beaulieu Canada and took over as CEO in 2007. Last month, he added CEO of Beaulieu America to that responsibility. Today, he lives with his wife and three children in Atlanta.
Q: What are Beaulieu America’s strengths in the marketplace?
A: Beaulieu has several unique strengths. First, it’s an American-based company with an international perspective, so it takes a back seat to no one. To the dealer, that means size, stability and a global perspective on style, design and innovation that no one else can match. Secondly, we’re a family owned company, so we can be far more responsive and innovative. Our dealers often tell us that they feel like an extended part of our family because we put them first. Thirdly, we’ve got very talented and dedicated people at every level of the organization.
Q: How has the company evolved since it was started 35 years ago?
A: It’s grown much larger, of course. And now, we’re no longer a carpet-only company. But one thing has remained and will continue: we have the same entrepreneurial spirit of our founders.
Most of what we sell today is produced here in the U.S. And just like the rest of the industry, our business was impacted by the drop in demand caused by this last recession. But as the market recovers, we’ve shifted our strategy and adjusted our business model—resulting in a stronger balance sheet. We’re in this business for the long term, and our goal is to support the sectors that understand loyalty and partnership.
Q: What are the biggest challenges that the company faces as it seeks to grow in today’s environment?
A: Chasing dollars for dollars’ sake is not a good business model. We have stepped away from lots of unprofitable business, and it has worked very well for the overall profitability of the business. In fact, last month we were able to announce an overall salary increase, which we probably haven’t done for ten years in the company. We don’t believe in selling products with no profit. In this industry, there is a lot of that, and that business philosophy confuses me.
In addition, we are struggling with the same thing that everybody else is: an improving but still sluggish economy.
Q: Which sector of the business offers Beaulieu the biggest opportunity for profitable growth?
A: Residential replacement with our Bliss brand of carpet and now also with our Bliss luxury vinyl flooring [LVF, which is Beaulieu’s name for LVT]. We are also very excited by the opportunities we see in commercial—from our Hollytex Commercial Solutions brand for mainstreet and our Bolyu specified commercial offerings. Both are growing for us.
We have strong relationships with independent dealers across the country and the big boxes that we want to maintain share. We also have a good relationship with several of the large buying groups. Where we probably aren’t positioned as strongly is in the builder sector, which is a very price-driven business.
Q: Beaulieu was one of the first companies to backwards integrate on both the fiber and the backing side of the business. Do those investments still provide the company with a competitive advantage?
A: Absolutely. For instance you’ll find our own Nyluxe nylon fiber used in our new Bliss Perfection line. This gives us a competitive advantage in the soft segment, while preserving durability and ease of maintenance.
Q: Beaulieu’s product focus for many years has been in the carpet sector. Explain why the decision to expand into the LVT sector now makes sense.
A: Well, double-digit growth is a little hard to ignore. Plus, we were already marketing LVF with Beaulieu Canada, so as a company we’re very familiar with the category. We looked at the LVF in the U.S. and concluded we could bring a number of advantages to our dealers. We have, and they love it.
Q: Are there future plans to add additional hard surface flooring products?
A: We’re always looking at ways to give our Beaulieu dealers product advantages, so stay tuned, Kemp.
Q: Before coming to Beaulieu America, you spent five years at Beaulieu Canada. Explain the relationship between these two companies.
A: Beaulieu America is owned by Carl Bouckaert and Mieke De Clerck and their children: Nicolas, who heads up the commercial business; Stan, who heads up the LVF launch; and Stephanie and Nathalie, who are not involved in the day-to-day business but sit on the board. Beaulieu Canada and Beaulieu Australia are 100% owned by Mieke, as is Marglen Industries, the PET recycling facility in Rome, Georgia.
Beaulieu America and Beaulieu Canada are working more closely today than they ever have before. Both companies are strong and benefit from the closer relationship. Knowing both as I do, it’s exciting to see the collaboration and potential for all of North America. Keep in mind, however, that a big part of our success on an international scale is the understanding that people want to do business with people in their own country. So that will never change.
Q: How does doing business in the U.S. differ from what you experienced in Canada?
A: Well, Canada is about 10% the size of the U.S. population-wise, so naturally our Canadian division and market is smaller than its American counterpart. In Canada, however, we have a more dominant market position than in the U.S., primarily due to two things: we are viewed as the local major player and have a broader product line.
Q: How important is it for the consumer to know who Beaulieu is? And what are you doing to raise that awareness?
A: As you know, floorcovering remains by and large a directed sale at the retail level, so pouring millions into consumer advertising—and sustaining that year after year—is problematic. However, the consumer is very important to us, as is the dealer who sells our product, so our first priority is a great product experience that generates repeat purchase and positive word of mouth. We are also in the final stages of launching an entirely new website, so we plan to be very visible online where the consumer is looking for floorcovering answers. Other marketing plans are in the works, but I’ll leave that for our new CMO, Mike Amburgey.
Q: How does Beaulieu compete in a consolidated marketplace where your two biggest competitors have so much more market presence?
A: We find that our dealers want options and alternatives for their customers. And they and their customers like the innovative selections we have that others don’t—innovations like Magic Fresh odor reducer, Silver Release anti-microbial treatment, Wrinkle Guard backing for our carpets, and our full selection of coordinated color and style transitions for our LVF line.
Q: How important is international business to Beaulieu’s future?
A: Very important. As you know from your recent interview at Domotex with Joe Williams, our head of international sales, we plan to double our exhibit space there next year. Our close collaboration with Beaulieu Canada is another important indication. While the U.S. is obviously very important to us, we definitely have a global perspective. To Beaulieu, every continent but Antarctica is important.
Q: What do you enjoy when you’re not working?
A: I have a wife and three kids: a daughter who’s 16, a son who’s 14 and a son who just turned eight. They attend the international school in Atlanta. They speak four languages already, and we all really enjoy travel. It’s part of the Belgian genes; we really like to get out there and see the world when time allows.
In addition, two of my children enjoy tennis, so on the weekends we love to spend time on the courts.
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