Sturrus to Run Pergo from U.S.

Raleigh, NC, May 9--Tony Sturrus, who has been named to the post of CEO at Pergo, will oversee the company's 700-employee operation from Raleigh, where the company's U.S. headquarters is based. According to a the Triangle Business Journal, Sturrus expects to spend a large amount of time in Europe. Sturrus was quoted by the magazine as saying initially, he plans to spend 70 percent of his time in Europe and then balance it off to 50-50. The story also said at Pergo is also working on tweaking its product line by getting into other forms of flooring. Sturrus says Pergo expects to introduce several new products in 2005, including an incursion into the hardwood flooring market. These additions may not lead to significant job growth in Garner, where the company manufactures its laminate flooring. Most of the manufacturing of hardwood products is expected to be outsourced to cheaper manufacturers. But, Sturrus says, the Garner manufacturing facility will remain crucial to the company's high-end product line. Pergo in 2004 said it planned to spend $20 million to rehaul the Garner facility, a transformation that should come online in July. Pergo employs about 285 people in North America, including 230 at its facilities in Raleigh and Garner. Sturrus' appointment comes after the previous chief executive, Goran Bernhoff, left a little more than a year into the job, saying he did not want to "stand in the way" of new investors. He was referring to investors who had purchased a chunk of the company and were pushing to step up growth. It's rare for a European company to turn to a U.S. executive to head operations, and Sturrus acknowledges his appointment is a tip of the hat to the rapid growth of the U.S. operations, estimated to be adding sales by 15 percent a year. "It suggests the importance of the North American market for Pergo," says Spieler. Pergo virtually invented the U.S. laminate flooring market. But over the past five years, the company's market share has slumped to about 20 percent, and competitors continue to snap at its heels. "While Pergo is still the leader, it has dramatically lost market share," says Spieler. In 2004, Pergo worldwide reported a loss per share of 52 cents compared to 44 cents in the previous year. Sales slipped to $392.46 million from $393.86 million in 2003. After eliminating currency fluctuations, sales rose 6 percent, Pergo says. Sturrus' appointment is an effort at reversing those losses. "While the company's strategy and direction is unchanged ... there is a greater sense of focus and a greater sense of urgency (from Pergo's board)," says Sturrus.