Strategic Exchange: Retail traffic is picking up heading into the new year – January 2025
By Kemp Harr
In mid-December, I was able to interact with 280 of Mohawk’s largest accounts at its Edge Summit in Denver, Colorado.
It was encouraging to hear from this group that retail traffic had picked up post-election. Although still hindered by borrowing costs, the consumer is feeling good enough about where the economy is headed to spend some money on their floors.
It was also interesting to learn that the carpet and hardwood categories are trending up, as is the luxury side of the business. We learned right before Christmas that in December, consumer sentiment rose 3.1% to 74. This represents a 6.2% year-over-year increase. Granted, it’s still down 20 points from the levels we were seeing pre-Covid, but at least the index is moving in the right direction.
CYNCLY’S PURCHASE OF BROADLUME
We’ve been watching the tech side of the flooring business consolidate incrementally since 2018 when Broadlume first acquired Floor Force, followed by Creating your Space-the two leading website developers and digital ad buyers for flooring retailers. Soon after, it acquired Freetail (a Europe-based product visualization tool), then Retail Lead Management (CRM software) and, finally, Rollmaster (ERP software).
Concurrently, U.K.-based Cyncly started making acquisitions of its own, starting with RFMS (ERP software), then Pacific Solutions (ERP software focused on the commercial and multifamily sector dealers) and, finally, Mobile Marketing (a third website developer and digital ad buyer). In early December, we were all surprised to learn that the two leading aggregators are going to become one force focused on digital solutions for the flooring business when Cyncly announced its plans to purchase Broadlume.
Three years ago last month, I focused this column on Broadlume’s amazing growth after attending its FloorCon trade show in Sarasota, where I learned that it was being backed with $40 million of Silicon Valley venture capital money and had started to branch out beyond software into trade shows, showroom displays and even forming a retail group called Flooring Stores United with vendor partners and private-label brands. Right after that meeting, several business analysts expressed concern that servicing that level of debt purely with monthly web development and software fees from roughly 3,000 flooring dealers would be difficult to pull off.
It was the following year, in July 2022, that RFMS was sold to Compusoft + 2020, which changed its name to Cyncly two months later. At that time, the business was focused on software solutions for the kitchen and bath, furniture, window, door, and glass businesses, and it felt flooring would be an adjacent and complementing category to bolt on. Cyncly is owned by two private equity investors, TA Associates and Genstar Capital.
In a session I attended at Mohawk’s Edge meeting, I learned that the integration of the flooring assets of Broadlume and Cyncly will start in January, and the plans for the future will be unveiled at Cyncly’s Connect user meeting in Chicago in May.
Two other independently owned tech companies focused on flooring were also at the Mohawk meeting-Roomvo and QFloors-vying for their piece of the pie. Stay tuned to see how all of this shakes out.
FIGHT OVER GEORGIA’S PFAS WATER CONTAMINATION NOW HAS STAR APPEAL
Environmental and consumer advocate Erin Brockovich has joined North Georgia’s fight over remediation of PFAS-contaminated water supply. Brockovich, employed as a paralegal in the early 1990s, was instrumental in building a case against Pacific Gas & Electric Company involving groundwater contamination in Hinkley, California. She was made a household name by the 2000 movie about the case, starring Julia Roberts.
PFAS-known as “forever chemicals” because they are resistant to heat, water, oil and grease-are linked to an increased risk of multiple forms of cancer, decreased fertility and low birth weight.
In September, Brockovich attended a town hall in Chatsworth, Georgia to raise awareness about the lingering chemical in the North Georgia water supply. “You have a PFAS contamination, and it’s a big one,” Brockovich told attendees.
PFAS were sourced from 3M and other suppliers and used by carpet mills to create stain- and water-resistance, and wastewater from North Georgia’s carpet plants made its way into Georgia waterways that provide drinking water.
Brockovich has joined a team of attorneys holding town halls to raise awareness around the PFAS issue, and attorney J. Benjamin Finley of The Finley Firm, based in Georgia, is filing lawsuits on behalf of residents to force remediation of waterways by the companies responsible for the contamination. In fact, the city of Dalton has also filed suit against one of the city’s largest employers due to its alleged role in PFAS contamination.
The Environmental Protection Agency’s (EPA) limit for PFAS is four parts per million for drinking water. In October, at least 17 water utilities in North Georgia tested over that standard, and Finley claims that water tests of North Georgia waterways ordered by his law firm found levels hundreds of times higher than the EPA limits.
Says Brockovich, “It’s sickening for all of us that we have destroyed the most valuable assets this country has-our land and water.” Brockovich’s participation will bring a national awareness to North Georgia’s PFAS contamination and the carpet industry’s role in it.
If you have any comments about this month’s column, you can email me at kemp@floorfocus.com.
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