Distribution Evolution - July 2006

By FRANK O'NEILL, Publisher

Tarkett has been making dramatic changes lately. In the past year alone, the $2 billion Paris based firm has acquired Johnsonite and the British firm Marley, sold its small carpet and carpet tile business, formed new joint ventures with Mannington, the Portuguese firm Sonae and the Chilean firm Aconcagua. It also bought interest in two U.S. distributors, and just last month entered into a joint venture with Kronotex. And it moved its headquarters from Germany to the Paris suburb of Nanterre.

I find the Johnsonite acquisition most interesting of all the above because it signals Tarkett’s intention to become a much more serious player in the U.S. commercial marketplace. Tarkett makes high quality vinyl products for the commercial market, but it’s had difficulty establishing a brand identity in this country. According to Tarkett chairman Marc Assa, the company bought Johnsonite because he felt that few hard surface players have penetrated the U.S. commercial market as successfully as Johnsonite.

Tarkett and Johnsonite have some similarities. Both make quality products, and both tell their customers that lifecycle costs are more important than initial product costs if you want real savings. But after that, they begin to look like very different kinds of companies.

Tarkett is a manufacturing oriented company; product is everything. In addition to the firm’s three North American vinyl plants, it has a linoleum plant in Italy, a hardwood plant in Sweden and vinyl plants in France, Serbia, Russia and Sweden—and it’s now building a laminate plant in Pennsylvania with Chile’s Aconcagua Lumber. Those plants include one of the world’s most efficient, high quality vinyl manufacturing plants in Ronneby, Sweden and a hardwood plant in nearby Hanaskog that’s been automated so thoroughly in the past eight years that the company was able to reduce its workforce from 1,050 people to 400 and still increase production substantially. (Maurie O’Neill and I visited both plants early in June, but that’s a whole different story.)

Johnsonite, which has sales of about $130 million now, is a service oriented company; the customer is everything. While Tarkett begins with the product, Johnsonite works back from the customer to the product.

Johnsonite first began pursuing designers and architects a dozen years ago. Executive v.p. Carmen Pastore tells me that when he first tried to sell rubber flooring to the A&D community, he usually wouldn’t get past the receptionist. Today, Johnsonite is a name that U.S. designers know and trust. Why? Because the firm has established strong relationships with its clients, and given them not only the kind of products and colors they want, when they want them, but also a system for getting the most value out of those products.

“Our strength is our brand,” Pastore says. “We do what we say we’ll do and never stray from that.”

Today, Tarkett’s worldwide commercial business accounts for 46.5% of its total $2 billion in sales, and its portion of total business has been growing, but in the U.S., sales are just around $16 million. However, Pastore believes Johnsonite can help Tarkett increase those sales and create the kind of brand presence it already has. So does Regis de Boisseau, president of Tarkett’s worldwide commercial products division. His goal is to increase the U.S. business dramatically by marketing Tarkett’s commercial product line through Johnsonite’s topnotch distribution network and using that firm’s solid customer contacts to create a unified resilient product offering encompassing Johnsonite’s rubber products and Tarkett’s diverse vinyl line and its linoleum line.

We’ll keep a close watch on their progress. Meanwhile, in our next issue we’ll have my interview with Tarkett chairman Marc Assa.

THE WFCA GETS A FACE LIFT

Late last month, the WFCA threw a party, a party to thank all the people who helped install new floors throughout its Anaheim, California headquarters.

The remodeling was the brainstorm of Jim Walker, the head of the CFI. He wanted a place that would showcase the products and skills of the manufacturers who participated in the CFI’s Installation Assurance Program. What better showcase than the WFCA building, whose floors are walked on by many of the industry’s leading lights every year?

Walker asked some of the industry’s major flooring and installation companies to participate, and the response was extraordinary. A total of 19 companies took part in the project. They are: Amorim, Armstrong, Ardex, Burtco, Carpet Shims, Festool, Griffoul’s Studios, Halex, Johnsonite, Laser Products, Mapei, Milliken, Pergo, Premier Tape, Pro Knee, QEP, Seam Master, Sponge Cushion and US Gypsum.

Hats off to all of them.

If you have any comments about this month’s column, you can email me at foneill898@aol.com.

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