New Zealand Flooring Brands Snags New Chain

Auckland, New Zealand, Nov. 11, 2008--Entrepreneur Rodney Martin’s Flooring Brands group has hit back after a mass walkout by Carpet Court franchisees last month, forming a partnership with Auckland-based flooring business Hills Flooring.

The partnership gives the Flooring Brands group (which includes Carpet Court and The Floor Store) annual revenues of over $200 million and, according to the company, more than a third of the country’s retail flooring market.

Hills Floorings, which was owned by brothers Willi, David and George Hill, has annual revenues of $30 million and three retail outlets in Auckland, as well as commercial operations in Hamilton, Wellington and Christchurch.

It will now join The Floor Store, doubling the size of that group’s revenues to $60 million.

Willi Hill will become chairman of the Franchise Advisory Council for The Floor Store.

Martin’s investment vehicle Lincoln Capital Partners took a controlling interest in the Carpet Court co-operative late last year, having previously acquired 32 of the 61 Carpet Court stores.

Martin then won approval to change the group to a franchise structure, started buying up independent stores, and formed The Floor Store group, which he has now also franchised.

But last month, 18 Carpet Court franchisees, together with the owners of 12 independent stores and 10 former Flooring First retailers, created a new co-operative called Flooring Xtra.

All of its board members were previously involved with Carpet Court. After the walkout, the Carpet Court group consisted of 43 Carpet Court stores, of which 27 are owned by Martin’s Lincoln Capital Partners; and 12 The Floor Store outlets, of which LCP owns seven.

Martin said last year that he planned to boost the Carpet Court group's revenue from flooring companies to $360 million, with $300 million coming from the domestic market.

He says he is still planning a float of the Carpet Court group, but that won’t happen until the equity market turmoil has ceased.

Martin has spent more than three years establishing his position in the carpet industry, which he was attracted to as an investment prospect because it was fragmented.

He already undertook a similar project in the printing industry, founding Pacific Print Group (now known as the Geon Group) with business partner Geoff Wilding.