Q&A: Engineered Floors' James Lesslie discusses incorporating the assets of Beaulieu - Jan 2018

Interview by Kemp Harr

In November 2017, Engineered Floors finalized the asset purchase of Beaulieu America, a firm started in 1978 by Carl and Mieke Bouckaert and owned by the Bouckaert family, finally filing for bankruptcy in July 2017. Over the years, Beaulieu-which offered both soft and hard surface programs-had acquired a number of other flooring firms, including Coronet, Columbus Mills, Marglen Industries and Hollytex, and was the first American carpet company to vertically integrate into fiber extrusion and carpet backing.

Here, James Lesslie, executive vice president of sales and marketing for Engineered Floors, discusses how the company plans to incorporate Beaulieu’s products, brands and assets into its operation, which, at only eight years old, is now a billion dollar company, by Floor Focus’ estimates.

Q: What are the biggest changes to your organization as you assimilate the Beaulieu America assets?
A: From a market-facing perspective, the more visible changes are in the specified commercial business, where we have now added the Bolyu brand and its Aqua Hospitality brand. We’ve hired Brad Root to run that business for us. He and I worked together at Beaulieu before I left to join Engineered Floors, and he left to work for Interface. Now, he’s back with us running Bolyu, and he reports up through David Jolly to me. Bolyu and J+J Flooring will exist as two separate brands, and Bolyu’s sales force will remain pretty much the same moving forward.

Q: Will Bolyu and J+J compete with each other for the same customer?
A: No, our intent is to create a synergistic structure in which the brands complement one another. Instead of focusing the two brands on different price points, our plan is to divide the focus by vertical sector, implementing different segmentation strategies for each. We’re looking to have the brands co-exist and grow in different ways, not having them compete. We are still working some of those details out. Bill Blackstock, who runs sales for J+J, will work closely with Brad and David to coordinate the finer details of this synergy.

Q: What is your brand strategy on the residential side of the business?
A: First and foremost, in all markets, we want customers to recognize Engineered Floors as a leader in innovation, so the tagline for the company is “Innovation Reinvented.” From the very beginning, our solution-dyed focus has been a disruptive technology, as has the scale of our production facilities. We see solution-dyed as the fastest growing fiber system, period. There is more solution-dyed carpet in the market every year. Of course, there will always be a place for piece dyed, but in both polyester and nylon, solution dyed will grow.

As for our retail channel associates, we want them to see us as a true partner that is easy to do business with. We try to make business as simple for them as we can.

Q: Can you tell me more about what will be revealed at Surfaces in Las Vegas?
A: Dream Weaver continues to be our focus for carpet in the retail sector. This year, at the show, we plan to focus on our ColorBurst color technology and our PureBac backing system. Both are unprecedented and should generate a lot of excitement.

ColorBurst, which is available in both PET and nylon, is a proprietary color technology that makes the carpet look almost pointillistic, with extremely small dots of color. ColorBurst is coupled with PureBac, our new premium backing system. PureBac is non-woven, but it’s a polyurethane system; it doesn’t contain SBR [styrene-butadiene rubber]. It has virtually no VOCs and will have Ultra-Fresh Antimicrobial Protection built into it. It will also include an anti-delamination warranty for ten years. As for cost, PureBac sells for a fraction of the cost of the other performance backing systems in the market.

Ultimately, we’re trying to fix the big issues with carpet. Everybody says design first and foremost, and I get that, but with design, you’re chasing something that is constantly changing. If you peel away that next layer down and ask what issues people have, it’s installation. Labor is a huge problem in this industry. PureBac is significantly faster to install than traditional carpet. It’s easier to install on stairs. You can fold it; one guy alone can cut it.

Q: Do you plan to use any of Beaulieu America’s legacy brands?
A: No, our brand strategy is simple. Dream Weaver is our retail brand; Pentz is our mainstreet commercial brand; Dwelling is our builder brand; and we plan to use Engineered Floors as our brand in the multifamily sector, as well as with the products we offer in the hard surface, area rug and grass businesses. We believe that the Engineered Floors brand has good equity now. It started as multi-family carpet, but now retailers know it.

Q: What do you plan to do with Beaulieu America’s wet-dyeing assets?
A: You won’t be seeing any new introductions of piece-dyed carpet from us at Surfaces in January. We will introduce some piece-dyed styles later in the year.

Q: In hard surface, Beaulieu had diversified into several categories. What is your plan moving forward?
A: We plan to focus strictly on the LVT business, but with an expanded offering. We currently have no plans to compete in the hardwood, laminate or resilient sheet businesses.

Q: Will you continue to source your LVT as an imported product?
A: We will continue to import for now and evaluate our options. I don’t look for any changes in that regard to come quickly.

Q: What are your plans in the area rug market?
A: We are putting more emphasis on this business, and we plan to exhibit at the Las Vegas Market rug show in January, which is the same week as Surfaces. PureBac is very applicable to area rugs. It has a lot of flexibility to it. The weight of it is good, as are the aesthetics it enables, so you will see it in rugs as well.

Q: Tell me more about the grass business, which I assume refers to indoor/outdoor carpet.
A: We are re-entering the grass business. In the markets that we serve with grass, we are the only domestic supplier. This is a budget product, what we would call indoor-outdoor-something the consumer may buy as a rug and throw on their deck for a season. A lot of companies have tried overseas sourcing of grass, but we have a grass asset, and it makes a good product. Our grass fiber is extruded in Bridgeport, Alabama and tufted in Dalton.

Q: Are there any changes in key management as a result of this acquisition of assets?
A: Our executive vice president of operations is Danny Freeman; Melvin Silvers is executive vice president of product development, both on mainstreet commercial and residential. The commercial business and residential sales divisions are part of my responsibility. Gary Hollowell leads our direct residential sales effort. David Jolly leads our specified commercial effort. Clay Shaw is executive vice president of strategic accounts. There has been no realignment of senior management as part of this asset purchase.

In general, we have discovered a real talent pool from Beaulieu of really bright, hardworking, dedicated and loyal employees. That has been one of the biggest advantages of the purchase. We have gained a lot of good experience and resources.

Q: Toward the end of last year, there was a big discussion about discount terms. What is Engineered Floors’ strategy when it comes to terms?
A: We have offered standard net 30 terms since the beginning of time. But we always tell our retail partners, if you need something different, talk to us. For customers that request alternatives, we listen and see if it makes sense. Mr. Shaw always says, “Never forget who pays the bills around here.”

Q: What other changes will we see as result of the Beaulieu asset purchase?
A: With the Bridgeport backing plant now an asset, we are making some of our backings, though-make no mistake-we’re still buying a lot. We are running the Memofil Fiber plant, and we have good quality coming out of it too.

In addition, we are eliminating the 15’ goods that Beaulieu offered. We’ve never offered 15’ goods, and, in our view, the only reason anyone offers 15’ goods is because of side-match problems resulting from the piece-dyeing process. If you don’t have a problem with side matching, then you have no seaming issue, and you don’t need 15’ goods. Offering 15’ goods is an attempt to solve a problem in the wrong way. Ultimately, you can double your SKUs to two widths, or you can just use solution-dye technology.

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