Hardwood Report: As retailers see their margins on LVT narrowing, is hardwood poised for a comeback? - April 2020
By Jessica Chevalier
The hardwood category experienced a double-digit decline in 2019, according to Market Insights. What makes this so frustrating is four-fold: first is that, as hardwood experts like to repeat, consumers desire hardwood over any other type of flooring and the bulk of hard surface flooring sold today has the appearance of wood; second, that hardwood alone adds value to the home in which it is installed, another popular hardwood category talking point; third, that hardwood has a second-to-none environmental story; and fourth, that hardwood flooring’s durability has been tested and proven for decades-and it can be reconditioned-yet the category continues to allow itself to be out-sold on the basis of performance.
The simple fact of this situation is that the hardwood business finds itself between a rock and a hard place, somewhat of its own making. At the producer end, the “rock” it faces is the fact that it has been increasing deprioritized by multi-category manufacturers, which have invested bundles of money in LVT production and marketing and, therefore, have greater incentive to promote that category. This prevents hardwood from forming a coalition with enough power to effectively market itself, and without this ability, hardwood continues to lose both share and a meaningful voice in its own defense, a problem that compounds.
There are, of course, firms that remain committed to hardwood only, or at least hardwood primarily. These organizations are, by and large, smaller than the multi-category producers and direct competitors in the market, but this group is willing and, obviously, incentivized to wage a war against wood looks. Says Don Finkell, founder and CEO of American OEM, “There are large companies that have all the categories, but we [at American OEM] are a dog fighting in our own backyard, and we will fight harder for this than anyone else because we don’t have all the alternatives.”
The “hard place” comes at the other end of the buying cycle: the retail sales associate (RSA). In a recent Strategic Exchange, publisher Kemp Harr shared a firsthand story he’d heard about a woman visiting a retail store in Naples, Florida. The woman drove a luxury car. She entered the retail location looking to refloor her whole house with hardwood and was ultimately sold LVT. The question, of course, is why? Why would an RSA down-sell a seemingly well-off customer to a product that likely nets them a smaller commission than hardwood and their employer a smaller total sale? Why would an RSA not sell a consumer a product more fitting to their taste for quality, evidenced by their luxury vehicle? These are answers the hardwood industry must uncover if it is to counteract the widespread deselection of hardwood and re-establish it as a go-to product with the RSA community again.
Reflecting on how the industry has gotten to this point, Brian Carson, president and CEO of AHF Products, says, “I think that, as an industry, we lost the message. We got the consumer to believe that the cubic zirconia was as good as the diamond. One is the real deal, and the other is an imposter. But right now, [the hardwood industry] may have a more receptive market downstream with dealers, who have had their margin per square foot devastated. The industry needs to do a better job getting in front of dealers and saying, ‘Come home to hardwood.’ It’s where many dealers built their business and it’s the product that they make more money with.
“Hardwood is the most enduring floor you can put down. It’s the floor that ages with grace. How we lost that message could be a case study at the Harvard Business School.”
Neil Poland, president of Mullican, notes, “We need retailers to remember how many dollars a square foot they are losing by downgrading the consumer. The retailers gravitate toward whatever they can get a quick sale on. But they are walking away from thousands of dollars of gross margin in the process. They complain, but so far they haven’t changed the trend. They need to sell wood and ceramic as upgrades from LVT.”
Adds Finkell, “What I hear from the big retail groups and large dealers is that the move to vinyl has not been good for them because, even though sales may be strong, the total margin is down. They aren’t making enough to cover their overhead, so profits are down, and they are actively wanting to see the hardwood business recover.”
Some hardwood experts are hopeful that the industry is simply on the downward side of a cycle, and that there will be a natural swing back toward hardwood after the “shiny penny” factor wears off of LVT. “I think that we are three or four years into a seven-year downturn cycle for hardwood,” says Paul Stringer, vice president of sales and marketing for Somerset. “Over the next few years, I sense we will see the hardwood market continue to decline. During that time, we will see companies closing plants. But, in the long term, hardwood will gain more traction and, I think, start a new growth cycle.”
Carson believes that preference for wood looks is a good omen for how the hardwood category may ultimately fare. “What excites me,” says Carson, “is that when I go to a show like Surfaces and walk around, 90% of what I see is companies imitating what we do for a living, and I see it as a positive that everyone is aspiring for the product that we make and sell for a living. The negative, of course, is that folks are settling for the imposter. But today, prices and margins [on LVT] are compressing, and dealers are looking for products that are profitable. Consumers like that LVT was cheaper than hardwood, and that it had performance advantages-or perceived performance advantages-in waterproofing and wear, but those are solvable problems for us in hardwood. We are solving it, and the products we are bringing to market now and over the course of the next year will solve these issues and remind the consumer that they don’t need to settle for less than what they really want.”
He adds, “The reality is that you can make a piece of plastic for cheaper than you can craft a piece of hardwood. That’s the reality. And in certain price sensitive channels, people will go for value. But hard surface is a $14 billion business today at wholesale value. It’s a giant market. Hardwood has about 20% of that. Why does it only have 20% when 90% of the products are copying its look? I think that the opportunity is unlimited, and the prospects for hardwood are very good.”
Ultimately, Michael Martin, president and CEO of the National Wood Flooring Association (NWFA), is hopeful that after the disruptions that have rocked the hardwood market subside-including LVT’s cannibalization of the low end of the category and tariffs on Chinese imports-the category will emerge stronger. “There aren’t as many [players] in the low end, which allows us to be more of a luxury product,” he says. “A loss on the front end may be a win on the back end.”
As of press time, there is a great deal that is unknown about the novel coronavirus. The situation is fluid and, by all accounts, intensifying. With the instability in the stock market and many fearing-or indeed already facing-job losses, it is safe to say that most are hunkering down and limiting their spending. It’s the prudent course.
Hardwood manufactures are certainly aware of this, yet there is the hope from some that, as the situation eases, it may lead to homebound consumers reinvesting in their residences. Poland reports that the remodel business saw it happen after 9/11, when consumers were similarly holed up for a period of time, avoiding travel.
Poland notes, “I think the stock market has it all wrong. It is beating up Home Depot and Floor & Décor badly. The market is worried about store traffic dropping off, but the reports I have heard say that Home Depot has been packed with people buying stuff to make themselves productive while they are forced to work at home.”
A CHANGING LANDSCAPE
The hardwood category closed 2019 at $2.8 billion, a 13% decline from the prior year. Perhaps it is not surprising then that the market has seen, over the course of the past few years, a significant amount of upheaval and change. On the last day of 2018, Armstrong, which just a decade ago was the clear U.S. hardwood leader, sold off its hardwood operations in its entirety to be a resilient-only firm, and AHF was born. In addition, over the course of 13 months, Beasley Flooring Products-historically a lumber manufacturer that entered the hardwood business in July 2015 with the acquisition of BLC Hardwood Flooring’s Macon, Georgia factory-purchased Shaw’s Bryson City, North Carolina hardwood plant in March 2019 and Mohawk’s Melbourne, Arkansas hardwood operations in early 2020. The company sells both solid and engineered hardwood and is in the process of adding LVT to its lineup.
At this point, there remain relatively few U.S. hardwood-only players. Somerset is one. Maxwell is another. In Canada, Mirage, Lauzon, Mercier and Preverco keep up the good fight. But the bulk have added complementary flooring products as a means of building an offering more appealing to their distributor and retailer customers. At this year’s Surfaces, AHF announced the addition of a few LVT lines. American OEM offers a hybrid wood-SPC product called Raintree, and Mullican rolled out Axiscor Performance Flooring in early 2019, a stone polymer composite-based multi-layered flooring. Many of these wood manufacturers have simply dipped a toe into these secondary categories and continue to focus on hardwood as their central business.
All of this means, of course, that the hardwood market has been irrevocably changed, and when it swings back upward, it won’t look as it did in its prior iteration. “We think there will be a dogfight for the real wood market as plants have closed,” says Stringer. In that “dogfight” there will be winners and losers, of course, and much of that hinges on the decisions companies are making right now about their market position.
Changing consumer preferences around hardwood means that a successful producer isn’t just one that creates products that appeal to the market but also one that is nimble and innovative. For instance, the demand for wider planks yields an excess of strip hardwood, currently out of fashion. Hardwood producers must find profitable avenues for this material to bolster margins. According to Stringer, the producers that succeed will be the ones that, “can best allocate resources to the right products and figure out how to sell the off-fall or residual products that occur from raw material. It’s a balancing act.”
In mid-February, the Coalition for Fair Trade in Hardwood Plywood petitioned the U.S. Department of Commerce to issue a scope ruling confirming that certain hardwood plywood products from China that are assembled in Vietnam before being imported into the U.S. are within the scope of the antidumping and countervailing duty orders on certain hardwood plywood products from China.
“Tariffs were put on China,” says Stringer, “but now it’s coming from other countries. We need them across the board on low-wage countries. Otherwise, we may never be able to fully compete on price when producing in the U.S.”
THE P WORD (PLASTIC)
“It’s no big secret what resilient has done to the hardwood category, specifically at the entry level,” says Drew Hash, vice president of hard surface for Shaw Industries. “We are still very bullish about better-end goods in the category. But the category has been challenged by vinyl taking share.”
There are several factors that have allowed LVT to steal share from hardwood. The first, of course, are technologies that have enabled improved visuals, more akin to the look of real wood. Second is that price also plays a role; today’s U.S. consumers are, by and large, a price-driven group with less concern for true value and more concern for current style and the here and now. Consumers can get a stylish LVT floor for less than they can a hardwood floor, and the cost for installation may be lower, as well.
Third is the waterproof mythology built around the LVT category. Consumers may be introduced to the concept of “waterproof” floors during the early stages of online research. The concepts are reinforced by RSAs and point-of-purchase materials during the shopping experience, with consumers ultimately convinced that waterproof flooring is a necessity of modern life.
All three of these factors hinge on the fact that LVT and its companion products are largely comprised of plastic. Is plastic a malleable material that can be made to resemble other things? Yes. Is plastic an affordable material? Yes. Is plastic waterproof? It holds your milk, doesn’t it?
The fact, however, is that consumers don’t equate LVT with plastic or, in many cases, even vinyl with plastic. Who is going to tell them?
With a growing awareness of the world’s plastic problem, it seems logical that the hardwood industry-not to mention other flooring categories feeling the pinch from LVT-could capitalize on the fact that vinyl is a plastic and dissuade at least a portion of consumers from the category, which, at present, has no established recycling streams.
Says Dan Natkin, vice president of hardwood and laminate for Mannington, “Consumers may not realize how unsustainable plastic floors are. Think about the average [flooring] replacement cycle. At ten to 15 years, where are all these plastic floors going to go? We will have a significant environmental issue.”
“It’s baffling to me that the consumer won’t use a plastic straw but will fill their homes with plastic,” adds Finkell. “I don’t think consumers equate vinyl to plastic, but I do think at some point that it will dawn on people.”
Perhaps it isn’t a matter of waiting for consumers to put two and two together but rather one of putting it together for them.
As Natkin points out, the “alphabet soup” of LVT acronyms makes it easier to “hide the fact that the products are plastic.”
Last year, a study by the University of Newcastle in Australia, titled “No Plastic in Nature: Assessing Plastic Ingestion from Nature to People,” discovered that on average humans could be ingesting around 2,000 pieces of microplastic weekly, roughly equal to the weight of a credit card. According to the report, since 2000, the world has produced as much plastic as all the proceeding years combined, a third of which is leaked into nature. This can impact the health of fauna and increase the likelihood of harmful chemicals leaching into the soil. The study reports, “The production of virgin plastic has increased 200-fold since 1950 and has grown at a rate of 4% a year since 2000. If all predicted plastic production capacity is reached, current production could increase by 40% by 2030.”
This research makes it clear that even those who don’t consider themselves environmentalists have an incentive to reduce plastic usage: their own bodies. While studies are not yet conclusive as to the impact of microplastic consumption on human health, it seems reasonable to assume that we should reduce intake, and that can only be achieved through the reduction of plastics in the environment.
There is also the fact that while a flooring product may itself be waterproof, that doesn’t necessarily mean the installation is. Stringer notes that hardwood flooring will cup or move with excess moisture and “alert” the homeowner that they have moisture issues to address, but the nature of plastic makes a moisture issue harder to detect. Stringer ponders, “I wonder what happens if, in a few years, water builds up under plastic and mold develops? I don’t deal with these products, so I’m not an expert, but I wonder if [this] may become an issue. As time goes on and the plastic market matures, the concept of waterproof may change.”
Ultimately, however, while LVT manufacturers may be able to print a lovely wood-look image on their floors, a side-by-side comparison of the two products makes it quite clear that one is, indeed, the real thing, while the other is not-and this may be an effective tool in turning the tide. “The world has become more digital,” says Finkell, “and when the consumer looks at a picture of hardwood, it doesn’t look that much different than a picture of LVT or laminate. But if you hold samples of the materials in your hand, there is an obvious difference. As I see it, the obstacle is that people are living in a world right now that isn’t authentic, so the differences aren’t that apparent. We send our customers small samples that they can hold, and we find that, when they start carrying those around in their pocketbook, they eventually buy. Hardwood feels different than [the wood looks] underfoot. It is warm and inviting.” Hearthwood, American OEM’s hardwood brand, offers free product samples on its website.
The hardwood category has a compelling argument to make. Hardwood floors sequester carbon. They can be refinished. And at the end of their initial installation-which can be many decades long-they can be reused, if undamaged. If unusable and landfilled, they will not contribute to the plastics problem but instead eventually take the natural course to decay. And the simple act of telling that story and calling LVT what it is, a plastic, may be enough to win back some favor-and some customers.
With the preference for biophilic looks in the specified market, commercial hardwood has seen an uptick in demand. Perhaps it is because the present-day material is more refined than its acrylic-impregnated predecessors, which were rendered a bit plastic looking. According to German hardwood purveyor Haro, today’s commercial hardwood is “more engineered and sophisticated in the sense of surface treatments (lacquered, oiled), colors and locking systems.”
Haro reports that it sees a growing market in the U.S. for commercial hardwood, and U.S. producers agree. Mannington’s Natkin says, “We are getting more commercial requests today than I can recall [getting before].” Natkin contends that these are primarily for multi-use residential-retail locations, but the company is also seeing it used for specific spaces within a commercial landscape, such as executive offices and conferences rooms. Recently, the company’s hardwood was specified for Uber’s San Francisco headquarters for an accent wall application. And Natkin believes that to be a growing trend.
American OEM has also netted some commercial work as of late. Currently, the company’s products are being installed in a high-end condominium project in Chicago. The company notes growth in commercial specification over the last year of business, primarily in multifamily applications.
Rather than having a specific commercial offering, AHF invites commercial clients to choose from a broad range of species, colors, finishes, styles and performance hardwoods for use in retail shops, restaurants, offices, conference rooms and public venues such as museums, libraries and auditoriums.
Says Bernd Reuss of Haro, “We recognize-especially in the middle to upper quality fashion retail business, retail food business and, last but not least, the hospitality business-ideal market segments for our products. There is one strong driver for our products all over the world: rethinking of authenticity and naturalness and the worth of a real wood product. Forests store large amounts of carbon and are therefore an ideal contribution to reducing CO2 emissions. Parquet [the European term for all hardwood flooring] itself also helps the environment, because one cubic meter of parquet stores a good ton of
CO2. Wherever parquet is laid, no other floorcovering is laid. And that’s a good thing, because almost all other floorcoverings have a far worse environmental balance than parquet. Even after many years of use, parquet is still environmentally neutral. Because the parquet wood can either be recycled for reuse, or it is converted into bioenergy in an environmentally friendly way.”
Whether or not hardwood manufacturers have a specified commercial line, most of them do offer their products with either five- or ten-year light commercial warranties.
THE RSA CHALLENGE
For a host of reasons difficult to tease out, LVT has become the go-to hard surface sale for many RSAs, in spite of the fact that they and the firms that they work for could make more money selling other products, like hardwood. Hardwood manufacturers believe that the “shiny penny” effect in play when LVT rose to fame translated to force of habit, the easy sell. In other words, RSAs sell LVT because it is what they have become most comfortable selling.
What’s more, the waterproof story is an easy narrative because it plays to fear-fear that going with a non-“waterproof” floor will result in losses later. It’s the same mindset that compels Southern city dwellers to buy four-wheel drive vehicles. The likelihood of them needing the feature is next to nil-a standard sedan can handle 99.9% of what Mother Nature throws at them on an annual basis. But they are willing to be upsold on the fear that an unprecedented ice storm might leave them stranded on the side of the highway otherwise.
In addition, sales staff members lean toward selling LVT because it has become the path of least resistance. Hardwood is more complicated to sell and install, so RSAs stick with the easy road. And the bulk of marketing focused on the category plows the path clear. “The consumer is coming in today and saying, ‘I need a waterproof floor,’” says Natkin. “As an industry, we have been successful in convincing them that that’s what they need.”
“I would say that the dealer and the RSA have a tremendous influence on what the customer buys and a tremendous ability to influence that decision and make the customer believe that they have gotten what they want,” notes Carson. “Their goal is to keep the consumer in the store, to not let them walk out. One way to move them there is to immediately move to value and price. RSAs have precious few customers, and they are thinking, ‘I want to get them to something that I know I can sell.’”
“It’s going to be hard to get the RSAs back because they have all run off in the same direction,” notes Finkell.
Natkin adds, “Consumers still fundamentally desire hardwood, but RSAs have become so accustomed to pitching ‘waterproof’ that they are forgetting about other categories.”
Inserting hardwood back into the RSA narrative is a challenge greater than one company or one action. Because hardwood generally goes to market through two-step distribution, it is incumbent on manufacturers to make the case for hardwood with their distribution partners and then for the distributors to take the message to the retailer and their team. Of course, distributors represent a host of flooring products, so they cannot focus solely on promoting one category. “Distributors want to make sure that wherever consumers go product-wise, they have something to satisfy them,” says Finkell.
In spite of that, distributors are key partners for hardwood manufacturers in their pursuit to promote the category. “We rely heavily on our strong network of distribution sales reps to educate RSAs,” says Stringer.
As has been well documented within the industry for years, due in part to the long lifecycle of floors and how rarely consumers are in the market for them, they largely do not have an awareness of manufacturer brands and are not brand loyal. In addition, consumers largely make their flooring choices on the basis of style, colors and features. However, Natkin points out that there is an important relationship with brand in the retail market, and that is between the RSA and the brand. An RSA that sees a particular name as their go-to problem solver can be a powerful force of good for that brand.
The installer shortage impacts all flooring categories, but more greatly those that require a higher skill level, such as hardwood and ceramic. To this problem, there are no easy answers.
At the consumer end, the shortage of installers today adds up to longer wait times and higher price tags, and both of those act to turn consumers away from the category. Who, after all, wants to select a new floor, then wait months to have it installed?
THE WATER WARS
Hardwood is natural, sustainable, renewable and recyclable-not one of those arguments can be made about LVT. Yet in spite of all those wins, hardwood is still losing out, due in part to the fact that it is not, by nature, waterproof. To that end, today we see hardwood manufacturers working hard to innovate and increase hardwood’s ability to resist water in order to increase its competitive profile in the market.
However, as Martin warns, doing so is a matter of walking a fine line, “Everyone has to be careful about what is promoted as waterproof. It’s a dangerous selling proposition to make consumers too comfortable about water. Water will always find its way to the lowest spot in the room, so a nail hole or uneven molding can pose a risk. And if water gets under a floor, the consumer may be unaware, and that can be dangerous.”
There is the question, too, of whether it will ultimately benefit the hardwood category to enter the waterproof fray. After all, while hardwood can certainly be damaged by water, it is largely a durable and long-wearing material. Many of the homes we live in today have hardwood flooring that has been in place for decades-or even a century-despite the fact that it is not technically waterproof. Does suggesting that waterproofing is necessary by developing innovations around it effectively call into question the durability of the product as it is naturally?
Hash reports that hardwood has taken a big hit in the single-family builder market due to builders opting for LVT. “Even though the consumer wants hardwood,” he explains, “many builders have switched to LVT, and when you ask them why, they say it’s because they still have challenges around hardwood flooring. Very often, conditions at builder sites aren’t perfect-doors are left open, rain is coming in, etc. Resilient is more forgiving in those situations. But, of course, hardwood is hardwood, and you have to take the good with the bad.” As builder business has been a stalwart for hardwood, this is a noteworthy development.
LVT’s success has pushed the hardwood category to innovate, and innovation is generally a good thing. The new millennia brought composite engineered wood flooring products to the market, such as USFloors’ Coretec and others. These, which “contains real wood on the wearable surface only” and a composite body, are categorized by the NWFA as real wood products and, in a sense, have opened the door for wood products to offer the same benefits as competing LVT products.
Today, hardwood manufacturers are working to offer similar benefits in all-wood products. American OEM will soon roll out a hardwood product with a six-sided water-resistant coating. After being submerged for three days, the product absorbs 250% less moisture than untreated hardwood and dries back to its normal shape with no permanent damage. This may help hardwood move into locations where it hasn’t had much of a presence previously, such as kitchens and bathrooms. It may also assure builders that there is less risk to the flooring during the construction phases.
In addition, the firm’s founder and CEO, Finkell, believes that the hardwood industry as a whole needs to work on changing its rhetoric around water. To that end, the company has formed a co-marketing agreement with Procter & Gamble on its Swiffer WetJet Wood product. “What I have told other manufacturers,” says Finkell, “is that if you read the warranty of almost any wood manufacturer, it says that if you wet mop the floor the warranty is void. It has been that way since I got into the business. My contention is that we have opened the opportunity for vinyl and other products by making such a dogmatic statement. Hardwood is not naturally that susceptible to water, but everyone includes these statement in an effort to avoid claims. I think it is a mistake, and I have encouraged others to change that.”
AHF has launched a tremendous number of products since its inception. In total, the company has launched 58 products, totaling 500 SKUs. These include sawn and sliced face products, which the company became equipped to offer with the acquisition of LM Flooring last year. In last month’s Surfaces report, Floor Focus outlined each brand’s market focus and brand positioning.
In 2020, the company re-introduced two brands to market, Hartco and Robbins, and later this year it will introduce a new brand called Tmbr, which is geared toward Millennial buyers with on-trend face visuals at obtainable price points. The collection will include a combination of sawn and sliced face products and will be made in the U.S.
At Surfaces, AHF launched water-resistant wood products under its Robbins (HydroGuard) and Bruce (Hydropel) brands. A Hartco-branded 100% hardwood waterproof product, HydroBlok, also is forthcoming. And the company continues to work on new and improved water-resistance technologies.
American OEM is excited about its Wet Works treatment, a six-sided water-resistant coating (discussed under the The Water Wars section) for hardwood. Wet Works products are hitting the market now, and the company reports that major customers see value in the offering, and, as a result, it has added several large new accounts.
In 2015, American OEM built a slicing mill in Indiana and has honed its expertise in that area. Says Finkell, “We have gotten better and better at making sliced products, sorting through technical issues-mostly with yield. We have that under control now and have been able to offer sliced products at a lesser premium than what they were.”
American OEM started as an alternative to imported OEM products. The company “made good traction,” says Finkell, “but we were not always happy with the marketing.” In response, the company launched its Hearthwood brand in 2017, positioned at the higher end of the private-label product category. Last year, the company began adding more value lines in that brand with its Tennessee Trails and Woodlands collections. OEM continues to represent the bulk of American OEM’s business.
Anderson Tuftex launched three collections of engineered hardwood in 2020: Yin, Terra and Kindred. Each collection was paired with carpet curated to create different design aesthetics. The company has a wide range of hardwood styles.
Anderson Tuftex focuses primarily on the builder and retail channels of the market.
The company does not have a commercial-specific offering, but all of its engineered hardwood carries a ten-year light commercial warranty
The Dixie Group’s Fabrica hardwood program targets the mid to high-end price range. The program consists of 32 SKUs in maple, white oak, hickory and birch. Dixie has no formal commercial hardwood program though all of its hardwood SKUs carry a commercial warranty.
New in Q3 2019 was the Chateau Collection of white oak with an ultra-matte fumed finish and a sawn face. The product features solid Baltic birch core. The collection is comprised of eight on-trend SKUs.
Fabrica also rolled out its Citadel Collection of 7-1/2“x72“ white oak that features a fumed finish and light wirebrushing. This sawn face product gives Fabrica an opening price point item in the under $5/square foot range.
In addition, the company created the Provincial Collection of American hickory with a fumed matte finish and light wirebrushing. Three of the sawn face products feature a smooth finish and two feature a handscraped finish.
Harris Flooring Group is planning to expand its Americana Escape long-plank program under the Harris umbrella. Planks in the collection are 96” long, with one board equating to five square feet of flooring, which means that the product is not only a timesaver in installation but also caters to the current trend of wide and long formats. The company has also expanded its Naturally Aged Flooring brand to include ash and has added some reactive stains.
Harris’ hardwood offering ranges from the everyday “turn and burn,” in the company’s words, to the high-end designer visual. Its Johnson City, Tennessee facility is highly flexible with production capabilities.
The company has a commercial offering called Wynwood, which includes eight products in oak, hickory and maple.
Mannington has been hyper-focused on utilizing its domestic finishing capabilities to create design-forward products, like its Latitude collection, a wide and long product. Largely, however, the company hasn’t been focused as much on new roll-outs as it has been on broadening the palettes of existing collections.
In addition, Mannington has moved away from a larger national display to displays that cater to specific markets, so that its distributors can focus in on a few collections and create a more meaningful presence at retail.
Mannington targets its hardwood business to the independent retail and builder channels, representing 80% and 20%, respectively. At retail, its hardwood price points range from $3/square foot to $10/square foot.
Quebec-based Mercier is a hardwood specialist offering more than 3,000 SKUs.
Recently, the company made a new addition to its Atmosphere offering, which is a design of neutral light shades, blended with natural highlights to showcase the wood’s textures and grain. This was added due to a new technique created for last year’s Naked Wood Collection.
Mercier offers a five-year commercial warranty on its standard Generation products. Its Intact 2500 products carry a 2500 rating on the Taber Abrasion test with a ten-year commercial warranty and three-year direct street access warranty. Intact 2500 is also water resistant, antimicrobial and Greenguard Gold certified. The company notes that it has seen significant growth over the last several years in the commercial segment and believes it has a large lifecycle ahead.
Mercier also recently launched its spring sale to all registered LePlus Dealers that showcase its display system, a $0.75/square foot consumer rebate on its Generations and Intact 2500 products, its commercial-grade finish.
In the last 12 months, Mirage added two new lines: Escape and DreamVille. These affordable collections are well-suited to busy family environments with brushed and engraved textures that help disguise wear. The collections feature regional offerings, so they are built to fit the needs of a large audience.
In addition, the company rolled out its Lock format in a 5” width. Lock features hardwood boards with a high-density fiberboard core. The system can be glued or floated and enables installation that offers time savings and, therefore, cost savings. Lock is available at a more affordable price due to its construction, which features a thinner sawn wood layer.
Mirage serves the retail, builder and commercial segments. The company’s engineered and TruBalance platforms combined with its Nanolinx Commercial finish are indicated for commercial installations.
Mohawk sold its Melbourne, Arkansas hardwood manufacturing operations to Beasley Flooring Products in February. As part of the transaction, Mohawk is purchasing solid and engineered hardwood flooring from Beasley. This follows the company’s 2017 shuttering of its Holden, West Virginia hardwood facility and consolidation of those operations into the Melbourne plant.
In late 2019, Mohawk rolled out a new hardwood offering, called BelleLuxe, under its luxury Karastan brand, which previously included only carpet and rugs. The brand now also includes LVT. BelleLuxe contains four collections.
Mullican is continuing to going wider and longer with its engineered wood offerings. Because vinyl flooring products are limited in length and width-locking systems become significantly harder to install in longer products, says the company-Mullican believes that offering hardwood products that satisfy the consumer’s taste for wider and longer is an essential strategy to winning sales away from the vinyl flooring market.
To that end, in 2020, the company is rolling out Revival, available in three styles, which features sliced white oak planks, lightly wirebrushed and enhanced by a heat-treating technique called carbonization to create a unique color palette that retains the structural value of the wood while creating a rich, natural look. The products are 6-1/2” wide.
Two more new 6-1/2” collection are Madison Square-which features sliced, wirebrushed white oak planks in bold and contemporary colors-and Parkmore-a rustic, wirebrushed white oak offering with a matte finish.
In addition, this year the company is adding new colors to its Aspen Grove, Nature Solid, Wexford Solid and Chatelaine collections. The company reports that its Wexford Solid collection is performing well, and that the trend toward wider solid products, which has been underway for a while, has magnified itself a bit as of late. “That’s where the growth in solid is,” says vice president of marketing Pat Oakley. Wexford is available in up to 8’ random lengths.
Mullican offers products covering all price points in hardwood flooring.
Shaw supports all channels with its hardwood offering: specialty retail, single-family builder and commercial. The company’s products range from $2.99/square foot to $7.99/square foot at retail.
Shaw reports that it sees good opportunity currently with better and best goods and has continued to add products in that space. From a veneer perspective, this means more sliced and sawn face products as well as wide and long.
Last year, Shaw launched a new program of commercial hardwood in response to customer demand. The collection includes around 30 SKUs and targets the corporate, hospitality and retail sectors. The commercial products feature a proprietary finish that ensures they can perform in these high-wear environments.
Somerset reports that it rolled out nothing new in 2019 and plans the same for 2020. “We saw volatility in the market last year,” says Stringer. “And we saw that a lot of distributors were working hard to meet profitability goals, so we took a couple of years off from update kits and new product introductions. Two of our bestselling collections are those that we developed 21 years ago. They have grown almost every year that we’ve had them. We had a slightly more profitable year, and I think our distributors benefited from the slowdown of new introductions. We want our distributors and retailers to understand the value of hardwood flooring margins versus plastic. They may sell more plastic, but normally at lower margins than wood. At the end of the day, only the margin dollars get to the bank. We want to promote the value of wood. There is time in the future for new products. But we feel right now is not the time in this current market in the best interest of our distributors and retail partners.”
In 2021, the company expects to roll out major changes. The unveiling will represent “a more strategic” approach for the company and will impact many aspects of the business.
The company, which launched its engineered business in 2012, offers the same looks in both solid and engineered formats. And it reports that this product balance has helped it “maintain old business while also picking up new business with SolidPlus engineered flooring.” Somerset is dedicated to the distributor-to-independent retailer channel.
Across the board, hardwood manufacturers report that raw material prices have been stable, and Finkell sees this as an opportunity to create products that are more competitive price-wise. “We have tried to reduce our prices across the board, and we are seeing some opportunities on raw material prices going down,” he says. “We are responding to that. To change a supply chain takes a while, but we have some less expensive products that are 3/8” and maybe 5’ long rather than 8’, and that allows us to use less expensive materials.”
Copyright 2020 Floor Focus
Related Topics:Karastan, Lumber Liquidators, Armstrong Flooring, AHF Products, The Dixie Group, NWFA Expo, The International Surface Event (TISE), Mohawk Industries, Mirage Floors, Tuftex, Coverings, Anderson Tuftex, Shaw Industries Group, Inc., Mannington Mills