Strategic Exchange: Remembering two industry giants lost in 2020 - Oct 2020
By Kemp Harr
As fast as we’d like to see the coronavirus go away, the silver lining is the priority shift toward the home, which is driving American homeowners to place where they live and how their home functions much higher on the priority list. The reality has set in that the home is and will be much more than a closet and a place to lay their head at night. As a result, residential flooring sales are much stronger than expected, and this wave of business energy should continue, thanks to the extended role the home now plays in the daily work and family routine.
With reduced commuting and vacation travel, and more family time, storytelling has returned to popularity as people reflect on their ancestry and what brought them to this point in time. Who are we, and how did we get here?
As with families, the flooring business has its own heritage: folks who came before us with the passion and hard work to build the framework for where we find ourselves today. In 2020, we’ve lost two industry titans, whose personalities and fortitude helped mold this industry into what it is today: Peter Spirer and David Kolb.
PETER SPIRER: VISIONARY & CREATIVE THINKER
Without a doubt, the more colorful of the two was Peter Spirer, whose greatest claim to fame is the carpet mill he started, Horizon Industries. Peter launched Horizon in 1972, and 20 years later, sold it to David Kolb at Mohawk for $87 million-but we’ll get to David in a minute.
Peter was born in Brooklyn, New York in 1931. He went to college at the University of Miami and toyed with becoming an actor but pursued a business degree instead. Right out of college, he married his college sweetheart and landed a position in Macy’s’ executive training program. After two short years at Macy’s, Peter’s father-in-law, who worked for a New Jersey-based carpet distributor, talked him into joining his company, exposing him to industry leaders in Dalton, Georgia. By 1961, Peter moved to Dalton, married his second wife and took a job as vice president of sales for Painter Carpet Mills, owned by Lew “Mose” Painter. Before long, he became president, and the company’s success attracted Collins and Aikman (C&A), which was attempting to diversify beyond its core automotive textile/upholstery business. In 1965, Peter sold Painter to C&A. As a side note, C&A’s acquisition of Painter ultimately led to what is now Tarkett’s carpet business-but back to Peter.
Peter worked a short time for C&A, but his entrepreneurial itch drove him to go off on his own and start a carpet tile company in 1970, named Tile Company of America. Obviously, with this venture, Peter was way ahead of his time, but flammability issues with this product almost bankrupted him. Out of the ashes, so to speak, Peter started Horizon in 1972.
At this point in Peter’s life, thanks to his early interest in theater, Macy’s training program, exposure to inventor Mose Painter and the successful sale of a business to C&A, he was 41 years old and firing on all cylinders. While all the other carpet makers focused on price, Horizon focused on texture, color, styling and outlandish promotion. One of Horizon’s early carpet collections was called Safari. Peter sent a marketing team to Africa to interview tribesmen in the Zulu nation about his animal skin designs. As a result, the New York Times awarded the campaign the “Hype of the Year” award.
In 1983, at the time of its public offering, Horizon was the sixth-largest carpet mill. The next year, Peter hired Ralph Boe from DuPont and asked him to run the day-to-day as his COO. In just a few short years, Horizon became one of the most prestigious carpet brands in America, so much so that it was the first of a long string of acquisitions orchestrated by David Kolb in his quest to build Mohawk.
Peter is remembered as a genuine friend to many, with a zest for life, a creative drive, a love for art and a fabulous sense of humor.
DAVID KOLB: INSIGHTFUL, STRATEGIC LEADER
Dave Kolb is best known for driving the acquisitions that catapulted Mohawk’s carpet revenue from $352 million in 1992 to $1.6 billion in 1995, increasing revenues by a factor of 4.5 in just three years. David joined Mohawk in July 1980 as president of the carpet division of Mohasco Corporation. In 1988, he and other members of senior management, along with Citicorp Venture Capital, successfully completed a leveraged buyout of the carpet division, forming Mohawk Industries.
David was born in Charleston, West Virginia in 1939. He earned a degree in chemical engineering from West Virginia University and a law degree from Fordham University. Prior to joining Mohasco, he served as the director of Allied Fiber’s carpet fiber division, where he led the team that developed the Anso nylon 6 carpet fiber. Due to this success, he was recruited to Mohasco at the age of 41.
When David joined Mohasco, the carpet business was losing money. Woven wool carpet, manufactured in Amsterdam, New York, had been the core business of Mohasco’s Shuttleworth family since 1878, but in 1963, the family diversified into furniture, and in the next seven years bought nine furniture manufacturing companies. At the same time, tufted carpet made in Dalton took share from woven wool, styles changed, and before long, carpet was only a quarter of the Mohasco’s annual revenue.
In 1981, one year after joining the company, David moved the carpet division’s headquarters from Amsterdam to a 22,000-square-foot location in Atlanta. Out of the 550 employees who worked in the carpet division in Amsterdam, 80 made the move. David spent the next six years stabilizing the carpet business with a new team.
In 1988, David took the company private and restored its name back to Mohawk (dropping the portmanteau of Mohawk and Alexander Smith that had yielded Mohasco). The firm went public again in 1992 with annual revenue of $352 million. By ’95, using public equity, Mohawk had acquired Peter’s Horizon, American Rug Craftsman, Karastan Bigelow, Aladdin and Galaxy, and revenue climbed to $1.6 billion.
In 1992, Horizon was bigger than Mohawk but was vulnerable because of two years with back-to-back losses. With the Aladdin acquisition, the Lorberbaum family ended up with a controlling 39% stake in Mohawk. As a result, Jeffrey Lorberbaum was appointed president and COO, and David served as chairman and CEO until 2000. He remained on the board until he retired in 2003. David recognized that Mohawk needed to diversify beyond broadloom if it ever wanted to be a global leader and helped drive that diversity as Mohawk’s chairman.
Many who know David’s management style said he was very intelligent and spoke softly at the board meetings. He chose his words wisely, and when he spoke everyone listened.
If you have any comments about this month’s column, you can email me at firstname.lastname@example.org.
Copyright 2020 Floor Focus
Related Topics:Karastan, Mohawk Industries, Tarkett