Executive Outlook: After two years of shrinkage, many executives believe next year will begin the flooring market’s transition back to growth – December 2024

By Jennifer Bardoner

The flooring market has contracted another 6% to 8% this year, building on similar losses sustained last year following the surge of Covid-era renovations. The pandemic fueled historic-and unsustainable-highs for the industry, and the last couple years have reset the equilibrium. Still, the fall has been felt. Flooring executives are cautiously optimistic for 2025, which is expected to bring modest growth by the second half, and they’ve used the downturn to strategize and innovate, which bodes well for the business going forward. But elevated interest rates and a lack affordable housing are still creating hurdles, and the promise of new tariffs stands to pose new challenges.

Tim Baucom
Shaw Industries
president & CEO

“We’re actually starting to see what I like to call little green sheets of encouragement in the second half-not to the level we thought it would be, but I think things are starting to move.”

Q: You say you’re bullish about the remodel market next year. Why?
Baucom: Some of that is due to a slight pickup in housing turnover. It’s gone from that bottom at four million to maybe 4.4 million, though, during a more normal time, it might be 5.5 million to six million. We know that when people change homes, within two years, it’s not unusual for them to change flooring. We’re still seeing good activity in single-family new construction. Our multifamily is even pretty good.

We’re quite bullish about remodel activity next year. That pulled-forward demand has now been satisfied. The median age of homes has never been higher-it’s 40 to 50 years-so there is a lot of opportunity to pull forward from that standpoint. And not only are interest rates coming down, there have been some banking regulatory requirements that made home equity loans a little harder to tap, but now that has settled out, too, and banks are getting more open to promoting and making it easier to get home equity loans. We also see many of our customers starting to get a little more comfortable with leveraging some of the tools we’ve had for years, with Wells Fargo, for example, to offer financing.

Q: What about the commercial market?
Baucom: Commercial started to get a little bit better in the third quarter. Workplace drives a lot of that. I think people have decided that to build future careers and culture and training and promotability, there has to be a balance of freedom to attract talent and culture-building by bringing people back to the office. And I think people are realizing that they need to use their spaces differently, and there’s enough confidence in what that world looks like that projects are getting pretty active there. There also was some deferment that just has to happen.

Healthcare and education continue to be strong. Government is strong. Hospitality has come roaring back. Even retail has gotten a little bit stronger.

Q: Shaw is investing heavily in both soft and hard surface. Tell us more about that.
Baucom: With the investments in our soft surface, we’ve really rebuilt our whole infrastructure: how we design product, how we’re going to service the product. Our relocation of facilities out of the West Coast to tufting centers in Aiken and Andalusia, our development of backing systems like PetPerfect and PetPerfect Plus or our LifeGuard Blue, as we call it, is all part of understanding how people want to live, and then designing our assets to meet those needs.

We talk a lot about open floorplans and people putting in LVT, but we’re seeing people wanting more individual expression, so we’re seeing opportunities for custom-sized rugs made from broadloom and we’re seeing broadloom with more patterning. Additionally, 85% of homes have pets, and that spiked during Covid and work-from-home.

Specific to the [hard surface] investment, one of the things we’re seeing as vinyl products become much more mainstream in the commercial environment is that commercial has its own unique performance requirements. Typically, it prefers products that are glued down instead of floating, but it also has a lot of customization, and commercial orders tend to be bigger and a higher percentage are unique to a customer. We have moved quite a bit of our capacity forward, so we will make a much higher percentage in the U.S. so we can meet those needs. In our residential business, which tends to be rigid core and a made-to-inventory model, continuing to leverage partnerships and a supply chain makes sense, though we do make some as a kind of insurance policy.

Q: In addition to Shaw’s domestic hard surface investment, we’ve heard your new partnership with Classen out of Europe is going well. Tell us more about that.
Baucom: It’s been one of the quickest receptions for our products that were introduced on the commercial side at NeoCon, and we won some Best of NeoCon awards for that. We’ll also be showcasing some of that at our Shaw Flooring Network (SFN) convention in January. That product was designed mostly for the commercial market, so we will be getting some inquiry about, “How do we apply those technologies to residential spaces?”

Paul De Cock
Mohawk Industries
president of Flooring North America

“Inflation in our industry has been relatively stable, and we anticipate minimal fluctuations in raw material costs heading into 2025.”

Q: How have you strategized to attract business in a down market this year?
De Cock: We have been working on growing as much as possible by targeting available business, focusing on our customers and bringing them innovative products and a great customer experience. 2024 was a challenging year for the flooring industry, particularly in the residential sector, which suffered due to a significant drop in remodeling sales driven by low existing-home sales. Since flooring installation is disruptive, homeowners usually prefer to make changes when moving into a new home. However, with existing-home sales at a 30-year low, remodeling projects declined sharply.

In the commercial market, the retail segment has been under pressure due to a slowing economy. The office market was slow, given the shift to remote work. However, the industrial, hospitality, healthcare and educational segments have remained strong.

Q: Which segments do you expect to lead when the market recovers?
De Cock: Post-election, as consumer confidence rebounds, residential remodeling is expected to drive the business forward. Once homebuying picks up, remodeling is sure to follow. In the commercial sector, recovery typically follows residential trends by about 12 months. Retail and office segments will see a resurgence as people return to in-person work in the post-Covid environment. Other commercial segments like hospitality, government and education have remained steady and continue to perform consistently.

Mohawk is gearing up for robust growth in the coming year, with several initiatives to drive expansion. We are focused on generating demand through product innovation, streamlining the customer process and digitizing the customer experience. These initiatives should further propel growth.

Q: You mentioned product innovation. Tell us more about that.
De Cock: Investing in product innovation is part of our core strategy. We continuously explore new products that push the boundaries of aesthetics, performance and sustainability to bring differentiation to our retail partners and customers. Among our latest investments and technologies are standout innovations such as SolidTech R, PureTech Premier and

RevWood with Signature Technology, and our new Karastan Black Label collection.

Q: How has inflation impacted product mix and pricing?
De Cock: Inflation has not been rampant in our industry; however, the market/product mix has been challenging, with consumers being more selective and price-conscious, leading to a trend of trading down. Due to low demand and overcapacity in certain segments, manufacturers have been aggressive in pricing. Looking ahead to 2025, we expect interest rates to decrease and hope inflation remains under control. As interest rates fall, we anticipate a corresponding increase in demand. The outlook for 2025 is optimistic, with a significant increase anticipated, but the exact timing and magnitude of this surge are uncertain, as recovery predictions vary.

Q: You mentioned product trade-downs. Is that occurring across all parts of the market?
De Cock: The middle market has been squeezed, which is typical during economic downturns. While high-end consumers remain largely unaffected and continue spending, middle-market consumers shift toward more affordable options. As the market recovers, with interest rates normalizing and remodeling projects resuming, the middle market is expected to rebound. Remodeling, in particular, is targeted at this middle segment, which was notably impacted by the downturn and the decrease in existing-home sales.

Q: Is there any overcapacity in the U.S. flooring market?
De Cock: The U.S. flooring market is currently facing overcapacity issues, with the extent varying by product and segment. Certain sectors have been particularly affected, leading some companies to restructure their capacity during the downturn. With Trump’s election, it is likely that import duties will increase, promoting onshoring and nearshoring over the long term. The specifics, such as the extent of the duties, their implementation timeline and the industry’s adaptation, are still uncertain.

Laurel Hurd
Interface
president & CEO

“Given the challenging macroeconomic environment over the past few years, we’re watching product mix and pricing closely and controlling what we can.”

Q: Interface outperformed the market this year. To what do you attribute that?
Hurd: We delivered strong results to date in 2024 thanks to the continued execution of our “One Interface” strategy. In January, we implemented a new integrated selling approach in the U.S. that combined our Nora and Interface selling teams. This effectively unlocked new opportunities across our product portfolio and enhanced the customer experience. As of Q3 2024, our global corporate office billings were up 2% year over year, and we continue to gain marketshare when you compare us with overall industry trends. Our global education billings also remained strong in Q3, up 18% year over year. We’re selling our full product portfolio in this segment and seeing a lot of growth across our Nora products in both K-12 and higher education.

Q: Where there any other highlights?
Hurd: Earth Day 2024 marked a pivotal point in our climate journey. We announced that we’re “all in” on solving the climate crisis and becoming carbon negative without offsets. We’re focused on investing in innovation and R&D projects to avoid, reduce and store more carbon across our entire enterprise. Additionally, we’re putting carbon metrics front and center on all floorplans created by our Interface Design Studio (IDS), making it easier for customers to understand the carbon impact of their product selections and helping them achieve their sustainability goals. We also launched our Made for More brand campaign this past spring, which showcases our commitment to flooring products that are made with purpose and without compromise.

Q: What changes are you making to your product assortment in light of market conditions?
Hurd: Interface has noted increased demand for carpet tile designs that deliver beauty and functionality at a smart price point. Building on the success of Open Air, we’ve implemented design and manufacturing innovations that allow us to introduce timeless and dynamic patterns that meet virtually all customer budget goals. As a result, we’ve developed a growing portfolio of affordable choices that provide the design, performance and sustainability attributes our customers expect from Interface.

This diversity within our product portfolio enables us to sell higher-priced products into smaller-footprint areas, such as conference rooms, while integrating more attainable price point styles in large-scale spaces. Earlier this year, we added new carpet tile products like Knitstitch and Breakout, which are fresh, affordable takes on classic textures. In LVT, we’ve added 3mm options to some of our top-selling woodgrain designs to meet our customers’ needs, in addition to our existing 4.5mm offerings.

Q: What is your outlook for flooring demand in 2025 in the various segments?
Hurd: We’re experiencing continued success in education. Our expanded Open Air carpet tile platform, Nora rubber options and 3mm LVT collections are resonating with K-12 and higher education customers. This is a great example of our combined selling teams effectively supporting our customers across our full product portfolio.

Healthcare is another important segment for Interface. Given our typically longer sales and installation cycles for our Nora products in this segment, we’re anticipating that recent strength in healthcare orders will convert to billings in the coming quarters.

Corporate office is also a well-performing segment for us, especially in the Americas. As companies return to the office and update their spaces, we know our sellers will continue to leverage their deep A&D relationships and meet customer needs with our differentiated product portfolio.

James Lesslie
Engineered Floors
president & COO

“I don’t expect a big ‘Trump bump’ on January 21. I think if anything, it’s going to be a measured first six months with cautious optimism for the second half.”

Q: You use the term “cautious optimism” for next year. Why?
Lesslie: Home renovation box channel stocks are up 40% this year, so analysts are expecting a rebound in home renovation. We’re at an all-time high for how old our average houses are because there aren’t any new houses being constructed. We’re going to have to fix these houses up, so I do think there are reasons to be optimistic; I’m just cautious in that optimism because it hasn’t happened for the last two years, when forecasts were the same: that the first half of the year is not going to be as good, but the second half is going to get better. Sooner or later those economic forecasters are going to be right. And this time they seem to have better reasoning with interest rates coming down, but I don’t think interest rates are just going to collapse to where everybody can start moving around like they want, due to some of the really low mortgage rates that existing homeowners have.

Q: What is your outlook for carpet?
Lesslie: I think carpet is bumping along the bottom. This year, it is shrinking versus last year, no question. We may have a little bit of shrinkage in the first two quarters of next year, then I expect we’ll stop shrinking or grow a little.

There are some unique places where I think carpet is going to stay in the home. In single-family new-home construction, it’s still in the bedrooms; in a two-story model, it’s going to be upstairs, because affordability is a key metric. So, I see carpet still being a factor-it’s certainly the most affordable floorcovering. And we’re starting to see the beginning of what I’ll call a shift in philosophy, which happens in mega trends. My parents were putting carpet down over hardwood floors; now, we’ve reversed that trend, and we’re pulling carpet up and either finishing hardwood or putting down LVT. I think eventually people will go, “You know, carpet is soft, and it performs so much better than it used to.”

The industry did itself a disservice when we were making carpet that didn’t perform. We disappointed people. Now, we make a much better product, and as word goes out and people put it in, they love it.

Q: With your domestically made digital LVT now in the market, are you adjusting your supply chain in hard surface?
Lesslie: At least 50% of what is coming into the U.S. in hard surface is from China. Laminate is coming from Europe, but LVT is coming from China and from Vietnam through Chinese companies in Vietnam. We buy from some of those companies because that’s where all the supply is, but we’re also saying there is a better way to run the railroad. We’re launching the second generation of our digital-print LVT. Whenever you come out with something, after you run it for a while, you figure out ways to make it even better. The third in our series of introductions is launching as we speak, and we will have more introductions next year. We’re going to continue to grow that side of our business.

Q: How are you strategizing for next year?
Lesslie: Our strategy to address the weakness in the market is to leverage patented or proprietary technology to give customers new solutions to grow the business. We have something coming that’s going to be big. We will be unveiling new innovations at Surfaces in both soft and hard surface. When things are slow, you redeploy, you go innovate and say, “What can I do to make products that solve issues for customers that they never even knew were issues?” We’re going to take share in LVT, and we’re taking share in soft surface too, because we have innovations that nobody else has.

Winn Everhart
Tarkett North America
president & CEO

“Looking ahead to 2025 … on a macro level, we anticipate the market will grow in the low single digits.”

Q: What is your biggest priority as you step into your new role to lead Tarkett North America?
Everhart: My biggest focus is making sure we’re staying close to our customers. We know there’s some uncertainty in the market in terms of interest rates, economic performance and so forth, so we’re controlling what we can control, which is to make sure we’re providing our customers with excellent service and quality products and continuing to innovate with products and services that solve our customers’ needs.

Eric Daliere had really set Tarkett North America on a path for growth and success. We’re continuing the disciplined work that he began. Rather than being a mile wide and an inch deep, I’ve always been a strong believer in focusing on a handful of specific things that you can be the very best at. So, you’re going to see Tarkett have a really clear focus on resource allocation and prioritization as we define our greatest opportunities for continued growth.

Q: Tell us about your product launch plans for next year.
Everhart: Our launch plans are full but focused, giving key market segments thoughtful designs that are tailored to their specific design and performance needs. We’re continuing to develop our core product categories and technologies, such as Powerbond hybrid carpet and Johnsonite rubber tile for commercial, rigid core LVT for hospitality, and WPC for home.

Q: Did 2024 hold any unique opportunities for your company?
Everhart: With challenges, there are always opportunities. The volatility and uncertainty of the market has clearly been a challenge across business units, brought on by high interest rates and fluctuating confidence in the market, but we’ve remained bullish in our outlook and approach and have focused on improving our service levels, especially with our expedited shipping programs. Regardless of macro conditions, we’re confident in our solutions and the service we bring, and our customers seem to agree; our business units are outpacing the market in nearly every category.

We are on track to finish 2024 on a high note. We’ve had a strong fourth quarter, with sales showing growth in October, and November is shaping up to be equally robust. Because of our team’s efforts, we’ve been able to remain agile and capitalize on a few key factors: quick adaptability to demand, efficient response to market shifts, and strong relationships with customers and partners. Looking ahead, our strategy for growth is to remain agile to market shifts and rooted in our customer-centric culture.

Q: How much of what you sell in the U.S. is made here? Are you planning any changes to your supply chain in light of Trump’s win?
Everhart: We have high confidence that we’re well positioned with our supply chain to remain flexible to any changes. The vast majority of our portfolio is made domestically, which helps shield us and our customers from some of this uncertainty. We’ve strategically partnered with suppliers that have a multinational footprint, ensuring access to diverse manufacturing and logistic options. This allows us to maintain our ability to deliver reliably, even in uncertain global conditions.

Brian Carson
AHF Products
president & CEO

“My guess is the interest rate is going to have to come down about another 100 basis points [to stir the housing market]. Mortgage rates may not go back to 3%, but maybe 4.75%, and at some point, you’ve got to get on with life.”

Q: How was 2024, and what does that mean for 2025?
Carson: For AHF, it’s not been a bad year. Our business has grown; the environment was just different than what we thought we would find ourselves in. Demand, higher inflation and higher costs to operate the business, and a weaker-mix environment have been challenges for flooring companies to manage through.

People invest in their homes partly based on math and partly based on emotions. The math would say investments in home spaces should’ve started back in the back half of this year-there’s been enough deferred demand, and interest rates have started to come down. But it just didn’t happen, so the emotional uncertainty with consumers was overriding the fact that the math has become more favorable for remodeling and new residential home construction to pick up.

The election is now over, and no matter what you think about it, things are more certain now. The Thursday after the election, interest rates made their second move down, and the financial markets became more optimistic. It’s us, as consumers, who buy and sell stock, and that’s a reflection of general confidence. Eventually, that is going to spill over not only to the equities people buy, but the dwellings where people live, and I believe that will happen sometime next year.

Q: How have you used this downtime to strategize?
Carson: On the residential side, we’ve invested just short of $30 million into our factories this year, increasing capacity in porcelain, vinyl and wood and to build some new-to-the-industry products. I think as the market comes back in 2025, we’re going to be well served with those investments. Bruce, Hartco and Robbins stopped making unfinished hardwood over 25 years ago, and that’s a big market, and it’s an under-supported market today. With these investments, we’re entering the unfinished business, and we’ve got some unique technologies.

Q: What about the commercial market?
Carson: Our commercial business actually held up quite well this year. It was buoyed by the LVT we make in Lancaster and a strong VCT season, and we got back into the sheet vinyl business with Medintone.

If you think about the suburbanization going on across America right now, we need more schools, more hospitals, government offices, etc. We have too many in urban areas and not enough in suburban areas, and that’s true of restaurants and retail stores. In almost every application, there’s vinyl and porcelain in the same application, so our Crossville and AHF sales teams are working together, trying to win the business with both surfaces. You will continue to see that pick up steam, and we launched new collections to help facilitate that.

Then you’ve got the whole data center boom, which is a gangbusters market right now. They tend to use vinyl products and specialty products, and we make those right here in Illinois. Two years ago, we were sold out on VCT. We’ve made investments in the Illinois plant, so we’ve got capacity to run, and we’ve got two new-to-the-industry VCT visuals that are a bit more on-trend.

Q: What’s your outlook on domestic manufacturing moving forward?
Carson: There’s going to be a renaissance of interest in U.S. supply. My phone has been absolutely lighting up since the election. There’s been so much offshoring of hard surface for the last decade; AHF is a unicorn-we’ve got 12 U.S. plants. Everybody knew margins were going to have to get restored in the offshore supply. Everybody knows freight is going to go up as demand goes up. Now, this tariff thing has gone from theoretical to something that everybody is going to have to think about in terms of the impact on their business and how they can mitigate risk.

We increased capacity based on the expectation of higher demand and higher freight costs, and now tariffs are going to create an additional tailwind, so we are looking at additional investments. But we’ve got capacity to service next year and any reasonable upside scenario. The question would be ’26 and ’27, because once tariffs go on, they’re not going to roll back.

Jimmy Tuley
Mannington
residential president

“Based on the slow reduction in interest rates, we are anticipating the market to be very similar in ’25 to ’24. There’s a ton of pent-up demand, but it’s very hard to get people to invest with the higher rates.”

Q: Any bright spots this year?
Tuley: We have enjoyed a much better second half due to a couple of special circumstances. We were hit in an outsized way by the UFLPA situation in the second half of ’23, so being fully back in stock by midsummer and receiving a strong positive response to our Adura launches has given us a much improved second half. There has been some significant backlash to entry-level SPC, which has been building due to poor performance for some time now. Our thicker WPC products and Restorations laminate have resonated in the market because of that.

Q: How are you strategizing with your product launches?
Tuley: We are investing in what we call “meaningful innovation” in a very focused way. We have been preparing to hit the market with some exciting new launches earlier than we have in recent years. We want to create early excitement and focus with our solution-dyed nylon carpet products and some great innovation in LVT. We have also invested in improvements in our customer experience to make doing business easier at every turn.

Q: You mentioned “meaningful innovation.” Can you give any examples?
Tuley: Our Crafted/Tumbled Edge products in LVT have performed extremely well, and we are expanding that offering in a big way. Our other focus will be on nylon carpet in the Phenix line. We have spent a couple of years updating our color palette and designs, and we see a big gap in the market for the great performance features of solution-dyed nylon combined with our styling. Our launches will be extremely early next year, and we are very excited. We have purposely delayed some other categories to make sure our teams and our customers can really focus on these two launches.

Q: Other executives have said the middle of the market is getting squeezed. Would you agree?
Tuley: We have seen the median home price go up to almost $500K nationwide, so it does seem like the middle is being squeezed. Having said that, there is a very long-term trend of the U.S. being underbuilt from a housing perspective. I am hopeful that as we catch that up, there will be healthy markets for all levels of homes.

From a product perspective, we have seen the mid to premium products perform very well in this market. The people who are spending are spending on what they want. You hear terms like “golden handcuffs” on homeowners with sub-3.5% interest rates. We have started to see rates fall, but I think it will not be until early 2026 that we see the market really shake loose.

Q: How might tariffs impact the turnaround?
Tuley: Currently, both the raw material and labor costs put domestic and nearshore manufacturing at a disadvantage. Even the big tariffs out of China have not brought parity to domestic costs. Also, since those tariffs have gone into play, the world supply chain has grown much stronger. You see very strong supply out of Vietnam, Taiwan and India, for example. This situation will continue to be very fluid, but a big change in tariffs would probably just raise all prices on sourced products and get passed on in the market.

We continue to make diversity of our supply chain a major priority. It is a difficult balance to diversify and to have deep partnerships with suppliers. It is a balance that we will work on for the foreseeable future.

Raj Shah
MSI
co-CEO

“Our view is that the industry will grow as interest rates fall. That said, with the recent election there is some debate as to if interest rates will fall.”

Q: Did 2024 present any unique opportunities, and, if so, how did you address them?
Shah: Residential remodel has been fairly slow. The best way for MSI to combat this was one, innovation; two, increased marketing; and three, expanding our addressable market. In terms of innovation, we have added hundreds of on-trend products. With the consumer not making as many purchases, we have increased our marketing to consumers for them to be highly inspired, and our dealers are seeing the benefits of this. To expand our addressable market, we entered new product categories. This has included digitally printed quartz slabs, turf and engineered wood. We also added additional products for our commercial customers, including faucets, vanities, bath hardware, etc.

My belief is the industry will end up around 5% down this year. Our company will outperform this due to the strategies listed above.

Q: How do those product changes reflect trends in the market?
Shah: We have invested heavily in digitally printed quartz, as well as engineered wood and highly technical ceramic tile since we are seeing the high end be very resilient. Aesthetically, trends are changing faster than ever, and we are making sure our product mix matches the latest trends, whether this means more blonde wood looks, larger-format tiles or more naturally veined quartz.

Q: You said the high end has been “resilient.” How are the other parts of the market doing?
Shah: Inflation has definitely slowed existing-home sales, which ultimately slows down remodeling. What we have seen is that the low end and the high end are the most resilient during this time; the low end because that is probably non-discretionary purchases, and the high end since those consumers are not dependent on interest rates. Our product mix has evolved to take this into account. It has been very helpful for our dealers, who have taken significant share due to this strategy. We will continue to watch closely to make decisions and advise our dealers accordingly. The good news is that deflation is behind us, and we actually expect price increases next year from the industry.

Q: Are you adjusting your supply chain based on Trump’s presidential win and the ongoing global challenges?
Shah: The new administration will incent onshoring, and we will also build that into our models. It will take some time for North American capacity to expand enough to change the numbers significantly, so I don’t believe in the near term there will be a change in the overall landscape.

Over the past few years, we have dealt with wars, trade wars, shipping problems, etc. We continue to find ways to make our sourcing increasingly flexible and adaptable. Effectively, we are trying to source from more places, including domestically, to build adaptability into our supply model.

Q: Is there overcapacity in the U.S. flooring market?
Shah: For today’s demand, there is overcapacity. I believe with the growth in the medium term, this capacity will be fully utilized, and we will see more investment in production. That said, there is increasing pressure to be more productive and efficient, and there is a lot of related investment happening. The technology is rapidly evolving, so I believe we will see gains in this area.

The industry has a lot of macro reasons to be bullish: aging housing stock, deferred remodels, and we’re behind on the number of homes needed. This will be tempered by mortgage rates for the short and medium term. My belief is that new home construction and existing-home remodeling will be the first to come back, and commercial will come after that. Overall, I think it will be low single-digit growth next year.

TM Nuckols
The Dixie Group (TDG)
president

“Although I don’t believe carpet is headed back to 50% or more of the home, I do believe the trends of the past few years will help it maintain something around 35% share of the home going forward.”

Q: Tell us about the highlights of 2024 for The Dixie Group.
Nuckols: Our soft surface segment has performed very well compared to the market, especially in the high end, where we have shown growth in dollar and unit volume, helping us outpace the market. For several years now, the high end has outpaced the market in general. So, even with the uncertainty of the market, we felt there was an opportunity in our higher-end brands.

We were early to market with our Masland and Fabrica carpet styles for 2024, and that paid off with strong volume from our new introductions and growth in our high-end carpet segment for the year. Notably, over the past ten years, our Fabrica brand has shown the strongest growth in TDG. 2024 was the 50th anniversary of Fabrica, so we developed a special product launch and marketing campaign to celebrate this milestone year.

Another bright spot was DuraSilk SD, which showed significant growth as we expanded the polyester segment in fulfilling DH Floors’ brand promise of “Affordable Fashion.” Polyester represents 80%+ of the market but very little of TDG’s soft surface business, so there is a lot of room for us to grow in this segment.

Q: What is helping drive growth in the high end of the soft surface market?
Nuckols: That has been driven by a consumer who is shopping for carpet one room at a time. Carpet is now found typically in bedrooms and maybe a home office or basement; also, stair/hallway runners and custom area rugs are a good category. And the consumer is looking for styles that will really complement the hard surface flooring that is running through the main living areas in their home. Differentiated patterns and loops are great options for all the areas that are getting carpet today, and price point is much less of an issue. In general, hard surfaces-which have gained share-tend to be more expensive than carpet, so for the same price per square foot, the consumer can get a very nice, high-quality carpet. [With people working and schooling from home,] carpet became a good option anywhere the consumer needed a quieter environment or in rooms where their family was spending a lot of time together. And, from a retailer and RSA standpoint, if you know you are only going to sell so many square feet of carpet, the only way to show growth in soft surface is to sell higher price points.

Q: Any new company initiatives that you expect to bring growth next year?
Nuckols: On the soft surface side, we will leverage our “Step Into Color” campaign, which celebrates our long, beautiful color lines in an industry that continues moving toward the sea of sameness that is solution-dyed polyester. As part of our color story, we are now offering custom color capability through all of our carpet brands. Our new nylon extrusion facility, which started up in Q1 2024, will support this development with white dyeable nylon. In the middle of the soft surface market, through our DH Floors line, we will continue to fulfill the brand promise of “Affordable Fashion” with a combination of EnVision nylon and DuraSilk SD polyester styles, but you will see a bit of a shift toward nylon in our DH Floors brand versus the heavy focus on polyester over the last two years.

In our hard surface segment, we will focus on thicker, better-quality products in the WPC, SPC, laminate and wood categories. In 2025, we will expand our Trucor Prime X program, with planks from 7”x72” to 12”x90”, with a new collection. We will also expand our higher-end SPC line with new plank and tile looks featuring new edge treatments and visuals. And we will invest in our high-end Fabrica wood program with refreshed visuals and colors.

Thomas Baert
CFL
president

“We still believe that uncertainty will continue into the foreseeable future, and we encourage our partners to have a balanced product mix in their portfolio.”

Q: Have you made any changes to your supply chain in light of the global uncertainty?
Baert: Since before the pandemic, we have seen volatility in the industry, consumer markets, and in the cost of raw materials and shipping due to factors such as tariffs and inflation. Considering the environment, the key strategic focus for our company over the past few years has been to lay a groundwork that fundamentally transforms our organization away from a primary production hub to a more globalized approach with multiple smaller factories producing around the world.

In 2019, we started shipping SPC and laminate from Vietnam. The following year, we broke ground on what has since become the largest SPC factory in the U.S. This year, we just opened another factory in North Vietnam that ships a wide range of our product portfolio to support our clients who want to diversify their stock. With our second-to-none vinyl and laminate manufacturing sites-which we operate directly, unlike many large players in the industry-we are in a unique position to provide solutions regardless of any geopolitical changes.

Q: Is uncertainty creating more demand for domestically made products?
Baert: While many manufacturers are coming online, we still see a very strong demand for American-made resilient flooring products. Overall, the industry experienced a sharp decline in demand in 2023 in volume and especially in dollar amounts due to pricing pressures. We have grown double digits this year and expect to close out strong, especially compared to the rest of the industry. We attribute this to our longer-term strategy focusing on three main points, which include providing better service to our customers through domestic production and our enhanced stock programs.

As previously noted, we’re also focused on having many more product categories produced in many more factories globally, such as moving our patented acoustic flooring solution and our ultra-matte Purecoat coating to be produced in the USA. And the last point is innovation. The largest digital printing and digital embossing line is currently coming online at CFL USA’s factory in Georgia. And we have started moving into adjacent product categories, such as wall solutions.

Q: Is concern around low-end SPC having an impact on the category?
Baert: Low-end SPC is definitely a concern. The combination of increasing capacity, smaller markets and cost fluctuations has led to some actors undercutting product quality to be able to compete on price. There needs to be an education initiative for retailers and consumers that makes it clear the dangers that these low-quality products bring, although there does seem to be a growing awareness.

Quality will always be our number one focus. That’s why we have been working to develop a cost-effective product that can support our partners, allowing them to offer a competitive product while still being strong believers that value-added products are what consumers really want and can meet the expectations of performance and durability.

Q: How are you using technology to differentiate yourselves?
Baert: We are taking digital printing technology to new levels on SPC and doing so domestically. We are launching our digitally printed and digitally synchronized-embossed collections. The upside is huge: Besides the incredible realism and clarity of the final product, it allows for unlimited design possibilities and embossing-in-register flexibility. This means that flooring designs can be customized and adapted swiftly. Additionally, digital printing reduces material waste, as it eliminates the need for certain elements like décor films and plastic wearlayers.

We also continue to keep our patented acoustic flooring solutions at the most cutting edge, producing a market-leading product that is six times quieter than traditional SPC.

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