The Mannington Commercial Story - Jun 2016
By Jessica Chevalier
Mannington is celebrating its centennial anniversary this year, an impressive landmark for any company, let alone one that has remained privately held by its founding family.
While it’s tempting to assume that the company’s long-term achievement and longevity is due to some proprietary “secret sauce,” the fact is that it’s more likely a common bond with customers who can relate to its family-run business philosophy, since many of Mannington’s customers fall in that category.
Just as the mom-and-pop independent flooring dealers fight against the publicly traded home centers, Mannington is up against similar multi-billion dollar competition on the supply side, and yet continues to carve out growth with aggressive investments and somewhat of an “aw-shucks” persona from the family’s fourth generation patriarch Keith Campbell.
Today, Mannington, which started in the residential hard surface floorcovering business, has become a powerful and respected player in the commercial marketplace, serving A&D with its coordinated Choices that Work program that includes both hard and soft surface flooring. Mannington’s entry into and success within the commercial arena can be credited to a series of strategic decisions made by leaders who had the goal of achieving market differentiation, while also holding true to its company commitment: care; do the right thing; work and play hard; control our own destiny.
PUTTING DOWN ROOTS IN INNOVATION
The roots of Mannington’s foray into the commercial floorcovering sector were established in the 1950s. Johnny Campbell, grandson of the founder of Mannington and current chairman Keith Campbell’s father, knew that Mannington had to innovate if it wanted to survive.
Earlier in his career, Johnny had closely monitored the development of printing and rotogravure on PVC and was eager to get on board. The company set to work, and Mannington was the first company to come out with 12’ wide rotogravure printed vinyl surface floorcoverings. It was from that success in wide width printed vinyl flooring, says Keith Campbell, that Mannington grew and matured.
About that same time, the chenille bedspread industry in northwest Georgia had launched into the manufacture of carpet. From the late ’50s to the early ’60s, the soft surface floorcovering industry boomed and, as Keith puts it, turned the floorcovering industry on its ear. Johnny saw a number of his competitors jumping into soft surface flooring—including Armstrong, Congoleum and Kentile Floors—and by 1966, he was eager to get on board.
However, the carpet boom had yielded a shortage of fiber. “The industry was growing so fast that it was outstripping the supply chain,” explains Keith. “My father started talking to fiber producers, and they all said, ‘Hey, we like you and want to do business with you, but you have to go to the back of the line.’”
Johnny wasn’t happy with that. “My father was like a sports car with five gears,” says Keith. “He was pedal to the metal in fifth gear all the time, and he had no reverse.” Unwilling to wait around for the fiber industry to catch up, Johnny called a personal friend, the CEO of Hercules, a chemical manufacturer set up by DuPont and Laflin & Rand Powder Company. In a handshake deal, the friend promised to supply Johnny with all the fiber he could use. That fiber, which was polyolefin, was used exclusively in commercial carpet and thereby launched Mannington into both a new business and a new market sector.
Johnny was characteristically eager to get his carpet manufacturing operations up and running. While his first thought was to establish a mill near the family’s Salem, New Jersey operations, colleagues encouraged him to look for an already established mill near Dalton, Georgia, around which the industry was consolidated.
In 1967, Mannington bought majority share in a small Calhoun, Georgia-based mill called Wellco, then took it over as a fully owned subsidiary in 1969.
The Wellco acquisition proved to be a success for Mannington. In 1978, Wellco Carpet Corporation organized a second sales division called Charleston Carpets, and in 1983, Wellco completed a $5 million expansion to the Calhoun plant to create space for, among other things, a piece dyeing facility. By 1986, it had added a third sales division, Contract Distributor Resources.
Then, with the goal of launching into the relatively young carpet tile business, Wellco built a facility called Contec Modular Systems, also in Calhoun. The plant, which was over 50,000 square feet, opened in 1988.
The company kept the Wellco name for its soft surface products and sold through distribution until 1991, when the carpet business started transitioning to a direct selling model, leading Wellco to peter out naturally. At that time, the company—which had recently built its first modular tile manufacturing facility in Calhoun and had also begun manufacturing vinyl composition tile and inlay products in Salem—launched Mannington Commercial, a higher end, higher style line sold direct to the marketplace.
Says Keith, “Out of the core group of Northeastern hard surface companies that we competed with, we were the last ones into the carpet business and are the only one remaining in the carpet business today. Armstrong, Congoleum and Kentile all got out, but Mannington has held to a steady course, focusing on commercial carpet exclusively.”
Over the past 100 years, five generations of the Campbell family have worked at Mannington, including Keith’s grandfather Kenneth, who worked on the sales side of the business, and his great uncle Neil, an engineer who worked in manufacturing. According to Keith, typically two to three family members a generation take an interest in pursuing a career at the company. Today, Keith’s son Johnny Campbell as well as nephews Zack Zehner and Ian Campbell are involved.
As a means of avoiding the folly that sometimes besets generational family businesses, the Campbell family has established strict rules for relations who want to step in. First, they have to get their feet wet doing internships in the business; often these take place during summer breaks from school. Second, family members are strongly encouraged to step out and get experience at other companies before they settle into a role at Mannington. Third, full-time employment in the family business is limited to those over the age of 30 who have a graduate degree in something applicable to business.
BUILDING A COMMERCIAL DIVISION
From the company’s foray into the commercial sector until 1997, Mannington was organized into divisions by product category, each of which was run autonomously. Not only did each division have different leadership, but also different merchandising strategies and different flavors, as Tom Davis, Mannington Mills board member and former CEO, describes it. The divisions came together once quarterly in Salem for a meeting, but there was no continuity between them in how they approached the market.
Then, in the summer of 1997, Davis and Tony Kelly, then president and CEO of Mannington Mills, rearranged Mannington into two businesses, commercial and residential. “That was the genesis of what became the Mannington we know today,” explains Davis. “We were the first company to bring to the marketplace all of the various solutions that we offered for the floor of a commercial building. In many ways, that defines who we are today. Of course, now there are more companies with various products in a single offering. At that stage, we were the only ones. The competition has followed suit, but we got a head start at it, so we have become the best at integrating and offering coordinated packages of products and services to address various needs.”
Of course, a change as major as this significantly impacted not only the company’s path to market but its presence in the market as well. “The change had the quickest impact at retail,” remembers Davis. “We were established with specialty flooring retailers, but our lines had no continuity. Combining the businesses made us more important to the retailers and gave us a better story. We realized that this could really set us apart. It took longer on the commercial side, partly because there are so many people in the channel that you need to influence: end users, designers, maintenance managers, the procurement folks. It’s more complicated.”
However, the transition presented challenges internally, as several vice president positions were winnowed out, and Mannington team members had to master an understanding of not just one product category, as they had previously, but all of them. “One of the major challenges was taking a salesforce that focused on one product and educating them on a broad and sophisticated product line,” Davis continues. “The tendency is to stick to what you know, but often that doesn’t lead to the best solution. Today, the ability to offer and direct customers to the best solution to meet their needs from both a design and functional point of view is what defines us.”
In 2001, the company began selling luxury vinyl tile (LVT), both commercial and residential, primarily sourced from China. Then in 2008, it acquired Burke Industries, which added rubber flooring as well as stair systems, wall base, and molding and transitions to its offering. “We felt that a business like Burke that offered categories we didn’t have was a great fit,” explains Davis. “Culturally, they were a great fit as well.”
The same sentiment held true when the company considered acquiring Amtico. Sourcing LVT from China was a difficult proposition, and the company realized that it was important to develop U.S. manufacturing. At the time, the leadership of Mannington had relationships with key players at Amtico, and the company seemed like a solid partnership, both business wise and culturally. “They were innovative design leaders here and in the U.K., and once we became big players in LVT by primarily importing from China and saw how important LVT was becoming to the market, we realized it was important to have manufacturing in the U.S.,” says Davis. The company believes that the Amtico acquisition positioned it as the market leader in LVT, where it has a 40% marketshare.
Today, 60% of the company’s total business is in the commercial market, and, in addition, Mannington is the undisputed marketshare leader in commercial LVT, thanks to an early and massive investment in the category.
In addition to these benefits, the Choices that Work program offers coordinated materials and collections that are designed to transition well. What’s more, the company’s infrastructure allows it to streamline the logistics—the various products are shipped to the site on one pallet, and the end user receives a single invoice—thereby simplifying the specification process.
LAUNCHING A JOINT VENTURE IN MODULAR
Mannington entered into a supply arrangement with J+J Industries around 2004; J+J tufted its carpet tile products and contracted with Mannington to back the product and punch it into tile.
At the time, Mannington’s modular carpet was vinyl backed. However, “during that period and over the preceding decade, there was a small but very vocal group of activists that began to create fear of vinyl in the marketplace, a fear that was unsubstantiated by fact,” says Davis. “It was fanned by competitors in the marketplace who had alternate backing systems, and there was a group of specifiers and end users who bought into this and were refusing to specify vinyl.”
Though Mannington believed that vinyl was safe and was committed to selling vinyl-backed modular tile, in early 2007 the company decided that it would also offer an alternative backing system. The investment was sizable, particularly to create a product that would not be its primary offering, so Mannington approached J+J about creating a joint venture.
Though the companies were technically competitors, they served different primary segments and, therefore, didn’t often compete head-on. What’s more, they both had needs that would be fulfilled through the collaboration.
The companies created a 50/50 joint venture called Modular Carpet Systems. Today, the original Wellco building in Calhoun, which has been significantly expanded over the years, is Mannington’s commercial headquarters and also where carpet tufting—both broadloom and tile—and broadloom finishing take place. On the same campus is Modular Carpet Systems, which currently makes both PVC-backed and polyolefin-backed carpet tile.
Furthermore, Jones describes Mannington as being “big enough to service anyone’s business, but small enough to offer personalized attention.”
Davis echoes that sentiment, adding, “As not the biggest player in floorcovering business—which we have never been nor ever will be—one thing that has separated us for years is the culture of a private company. We are much like many of the customers we serve in the channel from that standpoint. Our core values are people oriented, and what sets us apart in many ways is how we interact with our customers, our communities and our own people.”
THE DESIGNERS' PERSPECTIVE
Interior designers appreciate Mannington’s style, product quality and selection, but what truly pushes the company to the front of the line, in the opinion of many designers, is its flexibility in catering to the designer’s needs. That strategy starts with the Choices that Work program but extends to its willingness to, for instance, work with designers on creating custom products to suit a project’s needs or collaborate with a designer in creating a new collection entirely.
Tom Polucci, director of interior design at HOK New York, says, “What I like about Mannington is that it is willing to take risks. A few years ago, we worked with the company on the Create LVT collection, which included circular tiles. I believe it was the first time anyone created a circular pattern. It was a risk for Mannington, but the company has the flexibility to take risks because it is privately held.”
Polucci, a licensed architect who currently focuses on the corporate market, adds, “If there is an opportunity, Mannington is always a good partner to HOK. If we need to customize or tweak a product or even push an order through, Mannington is very accommodating.” With 25 years of experience in interior design, Polucci seeks to create design solutions for his clients that communicate the brand and design goals, while also feeling bespoke.
Like Polucci, Stephen Wells, senior designer at Hendrick in Atlanta, Georgia, has had the opportunity to design products for Mannington and, in fact, headed up the creation of two new lines—a carpet tile collection called Intrinsic and an LVT collection called Infused—that will debut at NeoCon 2016. (See Floors@NeoCon in this issue for a sneak peek.) Both of these collections were collaborations by One Global Design, a network of entrepreneurial, owner-led design firms in the U.S., Mexico and Canada that works through a single point of contact to, as Wells describes it, operate in a manner similar to large international firms.
The project originated when Wells had the idea for the product design collaboration that would demonstrate how One Global Design members could work together seamlessly on any type of project. Once the One Global Design board of directors signed off on Wells’ idea, he immediately called Natalie Jones at Mannington to pitch it. “Mannington has a similar philosophy in business as One Global Design and Hendrick. Because it is privately held, its perspective aligns with ours. The similarity in our cultures is part of why we work so well together.”
In total, nine of One Global Design’s 18 firms participated in the product design project. An East Coast team designed a collection of LVT, and a West Coast team worked on a carpet tile collection. Each of these chose a theme and presented its collection to Mannington and the full One Global Design network at the collective’s February summit. “We laid them all out, and everyone offered their opinions. It was a room full of experienced, creative individuals, and there was no negativity—nothing but helpful, insightful comments.”
Ultimately, says Wells, “Mannington’s flexibility is what sets them apart. We are always able to make adjustments based on our design direction because their processes are so streamlined.”
Emily Stain, an associate at Corgan in Dallas, Texas, agrees, “[Mannington has] proved to be nimble, reliable and relevant—a difficult combination! They are consistent, and they do the right thing.”
Ganley had been running one of Burlington Industries’ textile businesses when the company filed for chapter 11 bankruptcy; its assets were assumed by International Textile Group. At the time, Davis had heard that Ganley was available and contacted him about the commercial division president position.
Ganley flew to Philadelphia to meet Davis, and Davis knew right away that he was the man for the job. “We hit it off immediately,” Davis reports.
On Ganley’s end, the first impressions were just as positive, “I joined Mannington in 2004, after a lifelong career in commercial flooring. Tom Davis was Mannington’s CEO at the time, and when I met with him and Keith Campbell, I was struck by the culture and core values of the company, as well as its potential to grow to an even greater position in the industry. It felt like a natural fit, and has proven to be so. Since day one, I’ve been lucky to have landed in a position of real partnership, and of shared vision for the future of the commercial business.”
Copyright 2016 Floor Focus