Periodical

Vol. 61 No. 14 A Hearst Business Publication July 23/30, 2012 $75
FLOOR COVERING WEEKLY
FCW’s
Statistical Report
20th Anniversary
STATISTICAL REPORT ’11
Chart 1
Flooring’s slow climb: Continued
sluggishness, volatility
The flooring industry showed mixed but
positive results in 2011. Last year mimicked
the year before in many ways, with business
picking up in the first half,
slowing mid-year and
continuing to struggle as
the year came to a close.
Raw materials prices also
continued to be an issue.
Total sales in 2011
reached $17.89 billion, a 2.5
percent increase over 2010’s
$17.45 billion. Square
foot sales — on the other
hand — dipped a slight 1.5
percent from 17.89 billion
square feet in 2010 to 17.62
billion. Square foot wholesale
prices grew from 98
cents per square foot to $1.02 per square foot.
Last year was another in which the traditional
selling seasons seem to have disappeared.
Consumers continued to look for sales, deals
and specials on the residential side. The builder
market remained almost nonexistent. Fortunately
the commercial market held strong.
According to Catalina Research, Floor
Covering Weekly’s partner in the annual
Statistical Report, hard surface sales showed
an upward trend, as did area rugs and carpet
tiles. Wall-to-wall carpet square foot sales
continued to weaken, according to the report.
On the hard surface side, demand strengthened
for ceramic tile, wood and vinyl sheet and
floor tile. According to Catalina, ceramic tile
dollar sales increased by 6 percent and square
foot sales by 4.5 percent. This was the highest
On the inside
News ................................... 3
2011 Industry Statistics ...... 4
marketWise ......................... 5
Imports/Exports .................. 7
Carpet & Area Rugs ............. 8
Wood ................................. 12
Tile & Stone ...................... 16
Laminate ........................... 19
Resilient ............................ 20
The Last Word .................... 26
rate for any flooring material. Vinyl sheet and
floor tile dollar sales rose by 5.8 percent, while
square foot sales increased by 3.2 percent. For
wood flooring, the gains
were 4.3 percent and 4.1
percent, respectively.
On the soft surface
side, carpet tile continued
to show increases in the
commercial sector, but on
the residential side, wall-towall
carpet sales continue
to suffer. One reason could
be the more dramatic
increases in price per
foot of this material type,
which is based on synthetic
chemicals. Two things
helped the area rug market:
the increase in hard surface sales as well as the
sluggish economy. Consumers find area rugs
an inexpensive way to spruce up their homes.
In 2011, the value of carpet and area rug
sales was $9.51 billion — 53.1 percent of total
floor covering dollar sales, down from 53.8
percent in 2010 and 71.9 percent in 1987.
On a square foot basis, soft surface sales were
10.22 billion square feet in 2011 or 58 percent
of total sales, down from 59.7 percent in 2010
and 71.2 percent in 1987.
The industry’s mix continues to change.
Catalina Research estimates that residential
sales accounted for 64.1 percent of total flooring
dollar sales in 2011, down from 67.9 percent
in 2007. Meanwhile, commercial sales
have become approximately 31.5 percent of
Continued on page 4
2011 U.S. Floor Covering
Sales: $17.89 billion
(in wholesale dollars)
5.0%
10.2%
12.4%
5.9%
11.8%
1.6%
53.1%
Laminates
Hardwood
Ceramic Floor
& Wall Tile
Stone
Vinyl Sheet &
Floor Tile
Other Resilient
(Cork, rubber, other plastics and linoleum)
Carpet &
Area Rug
$894.2 million
0.13% from 2010
$1.82 billion
4.3% from 2010
$2.21 billion
6.0% from 2010
$1.06 billion
0.2% from 2010
$2.11 billion
5.8% from 2010
$281.5 million
4.2% from 2010
$9.51 billion
1.2% from 2010
Periodical
For breaking news updated each business day, visit us online at www.fcw1.com
For breaking news updated each business day, visit us online at www.fcw1.com
Source: Catalina Research
UP 2.5%
from 2010

July 23/30, 2012
News
3
Sturrus steps down, Babula takes lead
Clarion Industries names new president, CEO
By Raymond Pina
[Shippenville, Pa.] Tony Sturrus announced
he was stepping down as president and CEO
of Clarion Industries, a vertically integrated
manufacturer of particleboard and laminate
flooring, based here, on July 25. The board of
directors at Clarion Industries appointed Mike
Babula, a fellow investor in Clarion Industries
and former vice president of sales and market-
Flooring America: Focus on referral business
By Raymond Pina
[Orlando, Fla.] Nearly 350 Flooring America/Flooring
Canada members gathered here
July 9th for its annual summer convention. The
group focused on its Fast Phase II program that
combines locally aimed TV and radio spots,
web-based technology and training to increase
its referral business through online testimonials
and old-fashioned word of mouth.
“It’s becoming more difficult to win the
hearts and minds of customers with traditional
advertising,” said Keith Spano, president,
Flooring America. “Word of mouth is track
able and inexpensive. Our Buzz Advertizing
campaign is a new way to stay top of mind
with our customers and getting people to talk
about our products and unique services.”
Supporting the strategy is data from Reuters,
highlighting that 70 percent of customers con-
ing, to succeed Sturrus.
“The company is moving into
another stage of development and
it requires a leadership change,”
said Sturrus. “I approached our
board a year ago with a plan to
create a deeper, more technical
managemen t team internally and
Mike was the best prospect based
on experience and knowledge of
Tony Sturrus
Clarion and its customers. That
plan put us in a place where Mike is
now president and CEO. Our business
has a solid foundation and I’m
confident in Mike. I’m leaving my
invested capital in the company.”
Sturrus said the transition will
allow him to focus on other business
interests and his family.
Sturrus and Babula were
sult online reviews or ratings before making a
purchase while 92 percent of consumers value
word-of-mouth testimonials over advertising.
What’s more, the study revealed 75 percent of
consumers mistrust advertising.
Guest speaker Andy Sernovitz, author of
Word of Mouth Marketing, suggested members
send free emails for friends and family
sales instead of spending thousands of dollars
printing out fliers. He also keyed in on
unique services and products, such as flood
proof vinyl floors, that are easy to remember
and discuss. And, Sernovitz stressed the
importance of searching the Internet for any
comments about their stores — thanking
those who commented favorably and apologizing
and seeking solutions for those with
negative comments.
Dealers who sign up for the $87 per month
Fast Phase II program receive a free iPad featuring
an application to help consumers fill out
testimonials as well as a system that automatically
filters testimonials to members homepage,
Facebook, Twitter and other social sites.
The Build the Buzz campaign is also being
supported by TV and radio ads featuring
family and friends referrals to locally-owned
Flooring America or Flooring
Canada locations.
“Our customers know they
want a new floor but not much
more beyond that,” said Marcia
Hewey, direct of marketing,
Flooring America. “Now we
can leverage the words of her
friends and family who have
already been through the process.
We’ve also added more
diversity to our ads with different
ages and ethnicities.”
among a group of investors that purchased
Clarion Industries from Tarkett for $26 million
in 2009. With Tarkett as its original sole
customer, Clarion Industries now supplies
OEM laminate flooring to a number of the
industry’s leading suppliers, distributors and
retailers. Prior to joining Clarion Industries
Babula served as president and CEO of
Franke, a leading international supplier of
kitchen systems.
“I’m going to keep to our strategy of providing
a domestic platform that executes extremely
well and build upon it going forward,” said
Babula. “It’s important that we have this transition
and we expect it to be seamless for our
customers, employees and shareholders.” FCW
Members who are already deeply involved
in their local communities are uniquely
positioned to leverage this modern referral
system, said Sue Barlett, owner of Charlevoix,
Mich.-based Barlett’s Home Interiors. Barlett,
a longtime Flooring America member, sponsors
her local sport teams and donates to the
library and battered women’s organization.
“We already do a lot of referral business but
this program will step it up,” she said. FCW
Flooring America’s summer convention
Carpet One: New wool carpet, click LVT
[Orlando, Fla.] More than 500 Carpet
One Floor & Home members attended the
group’s Team of Champions summer convention,
held here July 11-13, which focused
primarily on new product.
Eric Demaree, Carpet One president, told
dealers that they need to get noticed, get into
the consumer’s consciousness. “The best way
to do that is to drive our combined product
knowledge, selection and service locally,” he
said. “Ultimately, it’s in each individual store
where the battle is won.”
The focus of this year’s convention was on
new product, including Just Shorn, a high-end
collection of New Zealand wool carpeting, and
mechanically locking luxury vinyl tile (LVT).
“Those who seek this type of luxury product
will only increase as consumer confidence
improves,” said Paul Johnson, a Carpet One
owner in Tulsa, Okla. “The Just Shorn collection
has a great green story and it’s beautiful.”
Mike Mostad, general manager of Missoula,
Mont.-based Loren’s Carpet One, said
he was going to pick up the Just Shorn line
at convention. “We have a new upper-end
furniture store in our new building and their
clientele will go towards this new line,” he said.
Mostad said the biggest potential lies with
the group’s recent advent of click LVT. “We’re
pushing big into LVT,” he said. “Nationwide,
that category is coming on like laminate did 20
years ago. And to be competitive, you need a
click LVT at glue down price points.”
Also introduced were coordinated commercial
carpet and carpet tiles to complement the
existing hard surface Core Elements program.
“These products are specifically designed
to target Main Street commercial,” said
Demaree. “We have come to this convention
with products and programs that continue to
help our members differentiate themselves.”
Carpet One also reported that efforts to
attract customers by pairing the strength of its
buying power and product knowledge with
digital and social media has driven 65,000
leads from its website to local stores. FCW
Kitchen of the Year features Shaw’s Epic
[New York] Shaw’s Epic hardwood was
the featured flooring in House Beautiful’s 5th
annual Kitchen of the Year in Rockefeller Plaza.
Poised to be the “new American living
room,” this year’s kitchen was repositioned to
generate more space and reconfigured to look
and feel like a real home, according to Newell
Turner, editor and chief of House Beautiful.
Designed by Mick De Giulio, the con-
struction of the kitchen began in early 2012.
De Giulio said the inspiration behind the
development was his own kitchen.
“It’s all about kitchen centric living, all
living can be done in this space,” said De
Giulio. “I wanted to create a space that I would
want to eat in. This is it, this is my style.”
Shaw’s Epic in gold rush walnut was used in
the kitchen and in the butler’s pantry. Made of
recycled bi-product, Epic utilizes 50 percent less
of the tree, and its handscraped and distressed
look offers a time worn visual. It is also Cradle
to Cradle certified. De Giulio stated that he will
be using Shaw’s floors again and worked with
the company to create his own chevron detailed
pattern in the butler’s pantry.
“People don’t want to compromise on
style but they also want sustainability. I chose
Shaw’s Epic because I wanted something stylish
but organic,” said De Giulio.
Continued on page 23
Shaw’s Epic is the featured flooring
for this year’s Kitchen of the Year.

4
Table 1
U.S. floor covering market sales value
(in millions of dollars)
Product sector 2007 2008 2009 2010 2011 % change
Carpet & area rugs $13,210(R) $11,870(R) $9,287(R) $9,393(R) $9,505 1.2%
Hardwood flooring $2,184(R) $2,102(R) $1,506(R) $1,749(R) $1,824 4.3%
Ceramic floor & wall tile $2,826(R) $2,513(R) $1,909(R) $2,084(R) $2,210 6.0%
Laminate flooring $1,276 $1,047 $901.0(R) $893.0(R) $894.2 0.13%
Vinyl sheet & floor tile $1,926(R) $2,105(R) $1,818(R) $2,000(R) $2,115 5.8%
Other resilient flooring* $282.5(R) $279.8(R) $263.5(R) $270.1(R) $281.5 4.2%
Stone flooring $1,689 $1,408 $1,079 $1,062 $1,064 0.2%
Table 2
U.S. floor covering market sales volume
R=Revised Source: Catalina Research
*Other resilient includes cork, rubber, other plastics and linoleum.
(in millions of square feet)
Product sector 2007 2008 2009 2010 2011 % change
Carpet & area rugs 14,867 12,814 10,601 10,686(R) 10,221 -4.4%
Hardwood flooring 989.0 944.5 803.4 882.8(R) 919.0 4.1%
Ceramic floor & wall tile 2,664 2,258 1,848 1,992 2,078 4.3%
Laminate flooring 1,160 1,039 912.0 957.7 949.8 -0.8%
Vinyl sheet & floor tile 3,272 3,254 2,784 2,860 2,951 3.2%
Other resilient flooring* 352.9(R) 330.8(R) 280.1(R) 250.2(R) 244.0 -2.5%
Stone flooring 436.4 351.6 270.8 260.0 261.5 0.6%
R=Revised Source: Catalina Research
*Other resilient includes cork, rubber, other plastics and linoleum.
Chart 2
2011 U.S. floor covering
sales by volume
Total: 17.63 billion square feet
1.5% 1.4%
16.7%
5.2%
5.4%
11.8%
Carpet &
area rugs
10.22 billion
Ceramic floor &
wall tile
2.08 billion
Vinyl sheet &
floor tile
2.95 billion
July 23/30, 2012
58%
Laminate flooring
949.8 million
Hardwood flooring
919.0 million
Stone flooring
261.5 million
Other resilient*
244.0 million
R= Revised Source: Catalina Research
*Other resilient flooring includes cork,
rubber, other plastics and linoleum.
Slow climb
Continued from page 1
the industry’s total, up from 27.6 percent in
2007. The transportation market remains at
about 4.4 percent of total industry sales.
Just like 2010, commercial sales led dollar
growth in 2011. Corporate, retail and healthcare
are the strongest commercial markets.
Education and government struggled with the
down economy and lower tax bases. Hospitality
is still pulling out of the recession, though
activity there is picking up. Commercial sales
were estimated to be $5.6 billion, rising 4.7 percent;
while sales to transportation equipment
manufacturers were $785 million, a 3.1 percent
increase over the previous year.
Throughout the recession, the residential
market has been the most affected. In 2011,
things improved slightly, but the industry has
a long way to go. In 2011, total residential sales
are estimated to be $11.5 billion (in manufacturers’
dollars), a 1.5 percent increase over the
previous year, according to Catalina Research.
The residential construction market remains
a challenge for the flooring industry, though it
appears to be picking up in 2012. Existing home
sales have been increasing since late summer
2011 and builder starts have been increasing
at double-digit rates during 2012. However, in
2011, home sales remained sluggish and new
home starts were severely depressed.
On the remodel side of the market, which
makes up roughly half of the industry’s sales,
flooring sales continued to struggle. Consumers
in 2011 replaced or repaired essential items.
Flooring is an easy item in the home to postpone
and one of the most expensive. With the
continued decline in home values, consumers
were reluctant to make big expenditures.
Square foot sales increased year over year,
with the average value per square foot going
up 4.1 percent over the previous year. That’s
the sharpest gain since 2006, according to
Catalina. As the overall economy enjoyed
some recovery in 2011, manufacturers
passed along rising raw material, energy and
transportation costs. Carpet and rug prices
increased an average of 5.7 percent, one of
the highest. Hard surface flooring average
selling prices rose by only 0.9 percent in 2011.
According to Catalina, price competitiveness
Methodology
Floor Covering Weekly collaborated with Catalina
Research for this 20th annual statistical
analysis of the U.S. floor covering market. Area
rug numbers come from FCW research.
All figures that have been revised from
previously published numbers are indicated
with (R). All 2011 numbers are estimates at
this time and are subject to revision. The total
Graph 1
Looking back: 20 years of floor covering sales value
(in billions)
$26.0
$24.0
$22.0
$20.0
$18.0
$16.0
$14.0
$12.0
U.S. floor covering sales number posted for
2010 in last year’s issue has been rev ised
from $17.13 billion to $17.45 billion.
Note that in this year’s edition, resilient is
broken down into vinyl sheet and floor tile
and other resilient which includes cork, other
plastics, rubber and linoleum.
U.S. market sales are in manufacturers’
dollars and exclude installation costs. All retail
information is courtesy of Jonathan Trivers’
exclusive marketWise.
improved for ceramic tile and wood flooring.
2012 is shaping up to be an improvement.
Existing home sales increased 7.2 percent in
the first quarter. Industry experts estimate
that will stimulate industry sales since a quarter
of movers will replace a floor in the first
year. Housing starts also increased 19.4 percent
in the same time period. Commercial
sales should also continue to be strong as the
economy slowly improves. FCW
R=Revised Source: Catalina Research
Note: Stone flooring was added as its own category and is reflected in sales
figures starting in 1997. Rubber flooring was removed as its own category
and is reflected in “other resilient flooring” sales figures starting in 2011.
’92 ’93 ’94 ’95 ’96 ’97 ’98 ’99 ’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11
$12.42(R) $13.30 $14.20 $14.60 $15.20 $15.95(R) $17.40 $18.80 $19.90 $20.20 $20.65(R) $22.12(R) $24.33(R) $25.62(R) $25.89(R) $23.39(R) $21.39(R) $16.76(R) $17.45(R) $17.89

July 23/30, 2012 marketWise 5
Sales velocity: So little and so slow
By Jonathan Trivers
If you were a runner and had to run on a road
that increased in elevation so you could get
real aerobic exercise, the upward slant of the
road needs to get you panting and wishing for
the end of the hill. If our industry’s 2011 sales
(including labor) increase (3.0 percent) were
the upward slant, you would not be winded
and you sure would not have done much to
burn calories. Forget aerobic exercise.
So it is with our industry. Yes, it wasn’t
down but no it wasn’t up much.
As always, what happens to housing happens
to the floor covering industry.
New home sales for single families continue
to amaze — in a bad way. New home sales
have declined for six years in a row. In 2005,
new home sales were 1,283,000. For 2011, new
home sales were 302,000, almost one million
fewer new home sales than in 2005!
In 2011, new home sales dropped 10
percent from pitiful sales in 2010. An average
of 6,000 new homes was sold per state.
That might be fine for South Dakota, but that
barely shows up as an economic impact for
California, Florida, New York, etc. (If the
builder business increases by 13 percent a
year for nine years, it will be close to the good
years. It might well take that long.)
Existing home sales are off 25 percent
from the best year ever but they are nonetheless
still pretty robust. The problem for
Table 3
2011 floor covering industry sales
(in billions) $48.1B
Product Labor Total
$ Sell GP % $ Sell GP % $ Sales GP %
Carpet $12.5 30.4% $3.1 17.5% $15.6 28.2%
Vinyl $3.9 33.0% $1.8 26.0% $5.7 31.5%
Ceramic tile $4.6 32.0% $6.3 26.0% $10.9 28.6%
Stone/marble $1.1 36.0% $1.6 25.0% $2.7 29.6%
Wood $3.5 28.6% $2.1 22.0% $5.6 26.9%
Laminate $1.7 26.0% $1.0 20.0% $2.7 22.2%
Carpet cushion $.0 9 26.0% N/A N/A $.09 26.0%
Installation
materials
$1.0 26.0% N/A N/A $1.0 26.0%
Total installed
products
$29.2 30.6% $15.9 23.9% $45.1 28.2%
Area rugs $3.0 33.0% N/A N/A $3.0 33.0%
Total floor covering $32.2 30.9% $15.9 23.9% $48.1 28.5%
homeowners is that the average price of those
houses sold is 30 percent less than what it
was six years ago. If you are underwater you
certainly won’t make investments in flooring;
if you are wanting to upgrade your floors
but know that the house has lost 30 percent
Source: marketWise
in value, you will become a much harder sell
— it becomes, “should we really do this” as
opposed to “which one is best for us.”
Even with those headwinds, pent up
demand for new flooring in existing homes
continues to drive business for the residential
replacement sector. Pent up demand is far
greater than the negatives and will continue
to push this sector with sales increases for
years to come.
Commercial, blessed commercial, has
done better than the other sectors. That is
true for large class buildings, refurbishment
of existing commercial properties and Main
Street commercial.
The real news for 2011 is the accelerated rate
of the “market splintering” at retail. Small niche
markets are growing faster than traditional full
service flooring stores and one niche segment
has underperformed. Narrowcasting is in full
bloom — specialty hard surface stores are
popping up all over. The highest profile chains
are Lumber Liquidators and Floor Décor and
More, but there are independent hard surface
stores in many towns by another name. Shop
at home continues to grow as a part of full
service flooring store’s marketing effort and
Empire showed new vigor after consolidating
and cutting back on underperforming markets.
(Empire bought Luna, a direct competitor in
Chicago at the beginning of 2012.)
Key chapters of 2011 marketWise are:
The four legged stool collapses
New home’s size stabilize
Narrowcasting
Selling to the trade — a faltering business
model?
When ceramic looks like wood
The vinyl revolution
Baby boomers buy better and more expensive
goods again FCW
What we sell
Our very own Ray Pina, senior editor, FCW,
has been writing about the vinyl revolution;
most were disbelieving. Myself included.
Believe it. The vinyl industry bemoaned the
fact that their product was called vinyl. Consumers
thought of the vinyl in grandma’s house
and didn’t even want to look at the product.
The product got so much better in quality and
looks but the name hurt the category.
Along comes glass-backed vinyl, luxury
vinyl tile and VCT all gussied up and we have
a revolution. Used to be that luxury vinyl
tile was sold by two companies — Amtico
and NAFCO. It was a specialty product for
commercial sector and they sold 10 yards
into residential replacement. That might
be high. VCT was purely commercial and
glass-backed was some idea first advanced in
Europe. So what?
These three types of vinyl products are red,
red hot residential replacement products. If
retailers do not have large displays for these
products, they are missing the revolution. I
don’t mean a nice little display next to the
gigantic sheet vinyl rack; I mean a large display
of these products next to a small rack of
sheet vinyl. Many joined the revolution but
it’s not too late in 2012.
The new vinyl is helping this category to
regain lost market share. For 2011, vinyl had
the second highest increase of any product
category plus 5.7 percent (product plus labor).
(See Table 4.)
When ceramic tile looks like wood
Carmen Chilelli, the very creative product
Continued on page 7
Table 4
2011 product sales growth
(sales in billions; product + labor)
2006 2007 2008 2009 2010 2011
% increase
over last year
Carpet $21.8 $20.1 $18.3 $15.0 $15.3 $15.6 +2.0%
Vinyl $5.5 $5.5 $5.5 $5.0 $5.4 $5.7 +5.7%
Ceramic tile $15.9 $13.5 $11.4 $9.5 $10.3 $10.9 +6.0%
Stone/marble $3.5 $4.2 $3.4 $2.7 $2.7 $2.7 Even
Wood $7.7 $6.7 $5.8 $5.0 $5.4 $5.6 +4.3%
Laminate $4.5 $4.0 $3.4 $2.8 $2.7 $2.7 Even
Table 5
2011 market share installed products
2006 2007 2008 2009 2010 2011
Carpet 37.6% 37.9% 38.8% 38.2% 37.1% 36.6%
Vinyl 9.0% 9.9% 11.2% 12.1% 12.6% 12.9%
Ceramic tile 27.4% 25.5% 24.3% 24.0% 24.9% 25.5%
Stone/marble 5.8% 7.5% 7.0% 6.7% 6.4% 6.2%
Installation
supplies
$3.1 $2.8 $2.4 $2.0 $1.9 $1.9 Even
Wood 12.6% 12.0% 11.7% 12.1% 12.6% 12.6%
Rugs $5.0 $4.6 $4.0 $3.0 $3.0 $3.0 Even
Total $67.0 $61.4 $54.2 $45.0 $46.7 $48.1 +3.0%
Source: marketWise
Laminate 7.6% 7.2% 7.0% 6.9% 6.4% 6.2%
Note: These market share numbers were computed from the sales of product, labor and the installation materials used for that product category.
Source: marketWise

6
marketWise
July 23/30, 2012
Who sells it
There is some very good news hidden under
the massive amount of bad news about single
family new home construction. The number
of new homes sold has declined to an abysmal
low 302,000. At the same time, the average
size of the new home was dropping from
a high in 2006 of 2,561 square feet to right
around 2,300 square feet in 2010. Talk about
adding insult to injury — new home units
drop 72 percent from the best year (2005)
and then the average amount of square feet
drops another 10 percent! That’s what flooring
contractors were looking at in dismay.
However, in 2011, the average size of new
single family homes went up almost 100
square feet to 2,480. We see the size settling at
the range of the best year (2006); gone will be
the over-sized and useless foyer; there will be a
home office space that is not a bedroom, spacious
kitchens and some creative builders will
give up on the never-used living room and add
a play room along with a family room.
So when 2012 new home construction is
reported, the actual increase in number of
homes built over 2011 will not have to have
an asterisk noting that the home is smaller
therefore there is no gain in flooring needs.
The interest rates for mortgages were
at an all-time low and that will help the
sales of new homes and it allows the buyer
to make a modest monthly payment for a
good sized homes.
The four legged stool collapses
For a very long time our industry has been
easily broken down into four equal parts:
Builder 25 percent
Commercial 25 percent
Residential replacement (new owner older
home) 25 percent
Residential replacement (existing owner
improving home) 25 percent
Table 6
Who sells to the three end-user markets
(in billions)
These numbers always fluctuated as one
segment got stronger but a rolling average
pretty much had these segments equal. But
with the collapse of the builder business,
there are really only three legs to the stool and
(this is a very big and) because Americans
are moving far less than in the last 40 years,
the flooring sales generated by a household
moving into an existing home has declined
dramatically. (About 17 percent of households
moved every year; now that number is
right around 11 percent.)
This is how we think the sales by end user
market looks for 2011:
Commercial: 31 percent
Builder: 11 percent
Residential replacement (new owner older
home): 18 percent
Residential replacement (existing owner
improving home): 40 percent
The most important areas for flooring
retailers are commercial and residential
replacement of existing homes (owner
improvement). Sales for these two sectors
will come largely from word of mouth and a
compelling website.
The builder business should improve
about plus 13 percent each year for the next
nine years or so (that’s how long it will take
to get back to “normal” new home construction.)
These numbers (end-user balance of
sale) will slowly go back to how they were
and we will have four equal components;
however, for some years, the key components
for sales will come from commercial
and sales to customers in your town who are
now willing to improve their flooring.
Selling to the trade — a faltering business
model?
Many industries that serve the home
improvement sector have distributors who
sell to the trade. Their distribution facilities
have a showroom and contractors can
bring in their customers and decide on
Residential
Replacement
Builder Commercial Total
Floor covering stores $13.4 $1.7 $7.7 $22.8
Home improvement $7.5 $0.4 $0.4 $8.3
Hard surface stores; $4.3 $0.4 $0.4 $5.1
Internet, non-store $0.9 N/A N/A $0.9
Furniture, department,
discounters,home
furnishing stores
$1.9 N/A N/A $1.9
Contractors N/A $2.6 $6.5 $9.1
Total $28.0 $5.1 $15.0 $48.1
% to total 58.1% 10.7% 31.2% N/A
Source: marketWise
Table 7
Who sells it: Who the customer pays
(in billions)
2006
(%)
2007*
(%)
2008
(%)
2009
(%)
2010
(%)
2011
(%)
2011
($)
Floor covering stores 57.8 53.8 54.2 53.6 49.7 46.4 $22.8
Home improvement 16.1 14.3 14.4 16.0 16.7 17.3 $8.3*
- Home Depot 8.7 7.1 7.5 8.8 9.9 8.7 $4.2
- Lowe’s
4.8 5.2 5.5 7.2 7.5 7.0 $3.4
Hard surface stores 2.6 6.2 6.5 6.9** 10.1 10.6 $5.1
Internet, non-store N/A N/A N/A N/A 2.1 1.9 $0.9
Furniture, department,
discount, home 0.5 5.5 5.0 4.4 4.3 3.9 $1.9
furnishing stores
Contractor 23.0 20.2 19.9 19.0 17.1 19.9 $9.1
*This number reflects better valuation of Menards and other regional home improvement retailers’ selling flooring.
**Up to 2009, this number was hard surface stores and Internet and non-store. For 2010 and 2011, we have broken out Internet and non-store as a
separate category.
Source: marketWise
what she wants. The contractor buys the
merchandise from the distributor. It’s not
surprising ceramic tile distributors had and
have beautiful showrooms for the “trade.”
Lumber yards have always marketed to the
trade and Home Depot and Lowe’s are very
aggressive marketing to the trade. If the
percentage of pro sales (their phrase for the
trade) that Home Depot and Lowe’s generate
for the entire store is applied to their
flooring sales, they well could be selling $1
billion in flooring to the “trade.” In that
way, they are competing with distributors
not retailers.
Contract Furnishings Mart (CFM) sells
only to the trade. They have been in Portland,
Ore. for 30 years. But they are not a distributor.
They are a flooring/counter top hybrid
selling to the trade. They have nine “stores”
in the Portland/Seattle corridor.
They promise excellent service and excellent
pricing; CFM is a one price house for customers
whether you are an architect or builder. Service
and product knowledge are an important part
of their brand. They have a design staff; sales
people are paid salary — guarantee no pressure.
If you buy more and CFM gets a price break,
that is passed on to the customer.
Contract Furnishings Mart has thrived in
these very tough times. (The Pacific Northwest
has not been hit as hard as other parts
of the country but new home construction is
down in this area also.)
Pro-Source, a division of CCA Global,
is the largest type (in number of outlets)
of this form of marketing. Unlike Contract
Furnishing Mart, Pro Source was
established as a do-it-yourself marketing
company — the designer was given a key
and could come in any time of day, find a
product and place the order; 2 a.m. if they
wanted. Nice displays, wide assortment of
all flooring products but no sales help. Pro
Source is a franchise and as such pays 3
percent of their gross sales to the franchisor
— CCA Global.
They took a tremendous hit during the
downturn. The Pro Source business model
was bludgeoned.
According to the most recent Franchise
Disclosure Document from 2007 to beginning
of 2011, Pro Source had a 37 percent
sales decrease; they had a 27 percent
decline in number of franchise outlets; and
to protect the brand they owned (at the
end of 2010) 19 outlets, of which they were
looking to sell 15 of them to new franchise
owners; the average sale of the existing outlets
went from $3.4 million to $2.7 million
per outlet. (Three Pro Source outlets were
closed in Oregon/Washington.)
The Pro Source model is built on high
volume, lower gross margins than conventional
retail stores and commensurate
lower cost of operations — they don’t give
the same kind of personal customer service
as retail stores and their outlets are in business
districts or those areas with much lower
occupancy cost. As long as the sales were
roaring, this was a great business but with the
downturn, its flaws were too apparent.
Over time, it became apparent that there
was a need for sales people. The fact is their
“customers” knew precious little about flooring
and so the self-serve system became a
selling system with sales force ever present.
Did the gross margin increase to pay for these
additional costs?
Pro Source has decided to test kitchen
cabinets to expand their product mix and
attract new “professional” customers. (We
are not sure the allure of kitchen cabinets to
a flooring outlet, but Floor and Décor just
added kitchen cabinets to its assortment.)
Ultimately, a business model built on
high volume and fairly low margin works
only in the best of times. Our industry is
littered with retailers and contract houses

July 23/30, 2012
2011 Import/Export
Table 8
U.S. floor covering imports value
(in millions)
Industry Sector 2007 2008 2009 2010 2011
Carpet & area rugs 1 $2,257.7(R) $2,039.8(R) $1,580.8(R) $1,859.3(R) $2,032.8
Hardwood flooring $313.6(R) $572.8(R) $489.9(R) $632.0(R) $702.3
Ceramic floor & $2,083.6(R) $1,720.7(R) $1,203.4(R) $1,275.8(R) $1,325.2
wall tile
Resilient
Vinyl sheet & floor tile $605.8(R) $687.6(R) $613.8(R) $728.8(R) $764.4
Other resilient 2 $106.1(R) $107.6(R) $95.4(R) $109.6(R) $117.2
Laminates 3 $589.7(R) $453.2(R) $461.9(R) $476.2(R) $419.20
Total imports $5,956.5(R) $5,581.7(R) $4,445.3 (R) $5,081.7(R) $5,361.1
Year-to-year change -4.9%(R) -6.3%(R) -20.4%(R) 14.3% 5.5%
Table 10
U.S. floor covering exports value
(in millions)
Industry Sector 2007 2008 2009 2010 2011
Carpet & area rugs 1 $1,029.9 $1,102.9 $850.5 $999.2 1,066.6
Hardwood flooring $137.8 $142.7 $102.7 $130.7(R) $136.9
Ceramic floor &
wall tile
$52.3 $56.2 $50.3 $50.3 $52.5
Resilient
Vinyl sheet & floor tile $138.0 $160.9 $141.6 $163.8 $176.8
Other resilient 2 $27.6 $43.3 $34.3 $40.9 $40.4
Total exports $1,385.6 $1,506.0 $1,179.4 $1,384.9(R) $1,473.2
Year-to-year change 4.8% 8.7% -21.7% 17.4% 6.4%
Table 9 Table 11
U.S. floor covering imports volume
(in millions of square feet)
Industry Sector 2007 2008 2009 2010 2011
Carpet & area rugs 1 2,060.6 1,824.6 1,654.7 1,960.7 1,956.5
Hardwood flooring 152.2 258.3 282.4 330.9(R) 371.4
Ceramic floor & 2,175.9 1,684.4 1,331.8 1,393.2 1,408.7
wall tile
Resilient
Vinyl sheet & floor tile 1503.7 1,481.8 1,247.4 1,335.2 1,251.8
Other resilient 2 196.7(R) 230.3 227.7 213.5 161.9
Laminates 3 550.0 461.9 486.0(R) 522.7(R) 454.8
Total imports 6,639.1 5,941.3 5,230.0(R) 5,756.2(R) 5,605.1
Year-to-year change -8.3% -10.5% -12.0%(R) 10.1%(R) -2.6%
Import Key
1 Includes imports of roll goods, bath mats, area rugs, auto and aircraft carpeting and artificial grass.
2 Includes imports of flooring made of other plastics, cork, linoleum, rubber and other materials.
3 Estimated by Catalina Research, Inc.
R=Revised
U.S. floor covering exports volume
(in millions of square feet)
Industry Sector 2007 2008 2009 2010 2011
Carpet & area rugs 1 1,050.6 1,091.4 785.3 947.3(R) 1,009.4
Hardwood flooring 62.9 64.5 48.3 56.8(R) 59.1
Ceramic floor & 56.6 61.3 55.6 50.8(R) 53.7
wall tile
Resilient
Vinyl sheet & floor tile 301.2 331.7 310.5 377.6 363.3
Other resilient 2 51.4 91.2 70.9 76.7(R) 74.7
Total exports 1,522.7 1,640.1 1,270.6 1,509.2(R) 1,560.2
Year-to-year change 1.2% 7.7%% -22.5% 18.8%(R) 3.4%
Export Key
1 Includes exports of roll goods, bath mats, area rugs, auto and aircraft carpeting and artificial grass.
2 Includes exports of flooring made of other plastics, linoleum, rubber and other materials.
R=Revised
going gangbusters only to be tripped up by
low margins and sales decreases.
Narrowcasting
Think of the traditional broadcasting networks
in TV — NBC, CBS and ABC. Then
along came cable and satellite and now we
have more cooking channels than broadcast
networks. That’s narrowcasting — a narrow
but more compelling focus. Happened in
magazines, radio and in retail.
Flooring has a small, fairly narrow array
of goods. But narrowcasting has come to our
industry and it is thriving. Lumber Liquidators
(wood and laminate) with 270 stores
and Floor & Décor (ceramic tile, stone, porcelain,
etc.) with 30 stores are the two best
known national multi-store narrowcasters.
The downturn slowed them down but they
are gaining market share in all markets they
serve. In 2011, these two flooring retailers
with very narrow product offerings generated
more than $900 million in sales. (They
both have a very narrow product focus but
otherwise they market differently. Lumber
Liquidators has 1,000 square foot showrooms
with stock in the back; Floor & Décor has
60,000 square foot stores and all inventory is
on the floor.)
The customer’s logic goes like this: The
fewer product types a store carries the better
they know these products as opposed to
the general retailer (Home Depot) or even
the specialty retailer (full-service flooring
store). She gives up one stop shopping (she
wants carpet and wood) for the belief that
she will get the most knowledgeable person
and the best value.
Both of these narrowcasters started out
as product-only retailers. Customers have
pushed them into offering installation.
Both now offer installation done by a third
party (Home Service Store). The pressure
for them to expand their assortment to
carpet will be great. Remember Color Tile?
We suspect that won’t happen very soon
but for some reason Floor and Décor is
now offering kitchen cabinets to its flooring
assortment.
— Jonathan Trivers
What we sell
Continued from page 5
development manager at Canada’s Shnier
(second largest flooring distributor in North
America) was talking about the crosstransfer
(my words, not his) of design from
one substrate to the next. Laminate looks so
much like wood that wood manufacturers
buy laminate samples so their wood can be
more wood like; ceramic tile now has really
cool looking wood plank looks; luxury vinyl
tile looks like ceramic, even with faux grout;
ceramic tile looks like stone; and vinyl looks
like all the above. And with new and different
printing technologies, the crossovers will
continue and expand.
Chilelli is convinced that this is great
news for the flooring retailer. Superior
knowledge of what product is perfect for
what place in the home will become very,
very important. And, with setting materials
products that now have a moisture barrier,
products never before installed in basements
can now be installed without fear of
basements and or slabs.
Never before has training and product
knowledge been so valuable. Now she has
three different product types all with the same
visuals and she doesn’t want to make the
wrong decision. The best trained sales person
wins. Every time. Now more than ever.
Baby boomers buy better and more expensive
goods again.
They are back. And now that they are retiring
they want to buy something really cool
and creative. Just ask Pinterest.com.
She has been frugal long enough. For her,
it’s now or never.
Flooring retailers had best reduce all those
value products and start adding better and
better and better goods to all product categories.
All.
This is true for all retail categories —
clothes to washing machines to roofing
materials to flooring.
Enough said.
— Jonathan Trivers

8
Carpet & Area Rugs
July 23/30, 2012
Uneven recovery haunts carpet industry
By Janet Herlihy
The carpet industry continued to take one
step forward, half a step back in 2011, but
managed to eke out a slight increase in manufacturers’
sales in the U.S. — sales for 2011
(shipments minus exports plus imports) are
posted at $9.51 billion, compared to $9.39 bil-
Chart 3
Carpet & area rugs market* value and volume
(in billions)
20
15
10
5
0
$13.21(R)
14.87
$11.87(R)
12.81
$9.29(R)
2007 2008 2009 2010 2011
Market sales
lion in 2010, according to Catalina research.
Beset by necessary price increases and a shift
in consumer preference, carpet lost market
share, going from 59.7 percent of all flooring
volume sales in 2010 to 58 percent in 2011.
Residential market
The residential carpet market continues to
10.60
$9.39(R)
Square feet
10.69(R)
$9.51
10.22
*Includes roll goods, carpet tile, bathmats, area rugs, auto and aircraft carpeting and artificial grass.
Source: Catalina Research
R=Revised
struggle. “For the residential carpet business,
the first half was weaker and the second half
was a bit stronger than anticipated,” said Tom
Lape, president of Mohawk’s residential and
commercial businesses. “Overall, the residential
carpet industry had a puny positive increase in
dollars and was down slightly (one and a half to
three percent) in units,” Lape stated.
“The higher end of residential carpet performed
better because the luxury consumer
was ready to remodel and the low end of carpet
was driven by multi-family construction. The
middle was still very tough,” he continued.
According to Ralph Boe, CEO of Beaulieu of
America, “Total demand in residential carpet
stayed fairly weak because of a slow housing
market that is weakened by foreclosures and
short sales, was further depressed as people put
off buying because the price might go lower and
financing is hard to find,” Boe explained.
For carpet manufacturers, slow demand
is further aggravated by continued volatility
of raw materials costs. Boe added, “Lately, we
have seen reduction in cost of the oil, which
has helped for awhile, but it is too hard to
predict the future.”
Randy Merritt, president of Shaw Industries,
agreed, saying, “The residential side of business
in 2011 was still quite a challenge. Consumers
were still sitting on the sidelines. The consumer
pattern was to complete necessary renovation
projects but projects that were considered
improvements to the home were delayed,”
Merritt said, adding, “Unemployment and
consumer confidence continue to be issues.”
The Dixie Group’s high-end Fabrica and
Masland brands performed ahead of the
industry in 2011, contributing to a Dixie
sales increase of 15 percent, according to
the company. “Residentially, the upper end,
design business was much healthier than the
overall retail carpet business,” Kennedy Frierson,
COO of The Dixie Group, said. “Our
wool business continued to grow. In 2010
and 2011, people realized that there was not
going to be a total collapse, so, the upper end
market started coming back.”
Polyester filament increases share
Polyester continued its surge in the residential
carpet industry. “The fiber dynamic
continued to change with filament polyester
growing at the expense of staple yarns of
nylon, polypropylene and polyester,” Boe said.
Merritt added, “Just as we saw in nylon, polyester
staple is giving way to filament replacements.
Without question, the predominant
face fibers in carpet today are nylon filament
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July 23/30, 2012 Carpet & Area Rugs 9
Chart 4
Carpet & area rugs imports* value and volume
(in billions)
3.0
2.4
1.8
1.2
0.6
0
$2.26(R)
2.06
$2.04(R)
1.82
$1.58(R)
2007 2008 2009 2010 2011
Market sales Square feet
1.65
$1.86(R)
1.96
$2.03
1.96
*Includes imports of roll goods, bathmats, area rugs, auto and aircraft carpeting and artificial grass.
Source: Catalina Research
R=Revised
and polyester filament. At some point in the
future, these two fibers could near equilibrium.
The result may be 60 percent nylon, 40 percent
polyester or vice versa, but both fibers will play
important roles in the future of carpeting.”
While PET has moved into the residential
market, it doesn’t seem likely to be accepted
in the specified commercial business. “We’ve
built Interface on durable materials for
performance purposes,” stated John Wells,
president and CEO of Interface Americas.
“In our testing, polyester doesn’t fit commercial
applications because it’s more suited to
residential and light traffic applications.”
But according to Frierson, PET dominates
the under $10 per square yard segment and
continues to grow in 2012. “As long as the cost
difference between nylon and PET stays as great
as it is, PET will continue to grow,” he said.
Lape added that Mohawk research shows
that “three out of four RSA’s (retail sales associates)
who sell PET filament carpet would not
put it in their own homes. We need to know
how the consumer sees it (PET filament carpet)
and be sure they know what they are getting, or
it could backlash on the industry.”
Commercial market
Although, Catalina reports that soft surface
flooring declined from 42.8 percent in 2010 to
41.6 percent of total commercial market dollar
sales in 2011, commercial was the saving grace
for many carpet manufacturers.
Merritt of Shaw, said, “Led by strength
in the carpet tile business, the commercial
carpet market remained robust in 2011.
On the commercial side, we saw continued
strength in corporate and healthcare segments,
and retail store and hospitality began
to show signs of recovery that have definitely
carried over into 2012.”
Interface Americas posted record sales in
2011, according to John Wells, president and
CEO of the leading modular manufacturer.
“The corporate and education markets were
especially strong for Interface in 2011,” Wells
noted, adding, “The greatest challenges, for
the past few years, have been anticipating
customer needs in an unpredictable macroeconomic
downturn.”
Lape reported, “Specified was stronger
in the front half and weaker in the second
half. For the year, commercial outperformed
residential, mainly because projects on the
drawing board since 2008, 2009 and 2010
were finally funded. The global market was
reasonably robust, mainly with the export of
2011 key points
The carpet and rug industry gained slightly
in dollars but lost slightly in volume in
2011, compared to 2010. Sales were up
to $9.51 billion compared to $9.39 billion
in 2010, but square feet slid from 2010’s
10.69 billion to 10.22 billion in 2011.
Filament fi ber — primarily nylon and
polyester — continue to replace staple
fi ber yarns used in the carpet and rug
industry. PET fi lament continues to grow
its share of the residential market, but
nylon continues to hold its own in the
commercial industry. The new and improved
PET fi lament has allowed carpet
manufacturers to hit a more popular
price point in residential but some in
the industry fear a backlash if some PET
products are not made well enough to
meet consumer satisfaction.
carpet tile, and that continues in 2012. Carpet
tile is fast approaching 50 percent of the commercial
carpet market.”
Frierson added, “On the commercial side
of Dixie’s business, we saw the corporate
segment break loose a bit. We attributed
that to the federal 100 percent tax deduction
for capital expenditures in 2011 that
accelerated spending.”
Continued on page 10
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10
Carpet & Area Rugs
July 23/30, 2012
Rugs continue slow recovery
By Janet Herlihy
While far from a banner year, 2011 saw
some recovery in the area rug market. Total
market sales, calculated from a compilation
of estimates, indicates an increase in area
rug manufacturers’ sales for 2011 of about 6
percent to $2.01 billion overall compared to
2010’s $1.90 billion.
Because rugs are manufactured in every
material from silk, wool, cotton, natural
grasses and leather to every synthetic fiber
known and are available in hand made and
machine made constructions, it is a difficult
category to quantify. In addition, most rugs
are imported and tracked in a myriad of
ways. Statistics from the U.S. Department
of Commerce combine carpets and rugs,
Chart 5
Area rugs market value
(sales in billions)
$3.0
$2.5
$2.0
$1.5
$1.0
$0.5
$0.0
$2.25
$2.05
$1.80
$1.90(E)
$2.01(E)
2007 2008 2009 2010 2011
Source: U.S. Customs Bureau and FCW research
E-Estimated
including roll goods, bath mats, area rugs,
auto and aircraft carpeting and artificial grass
all in one statistic. Distribution for rugs is as
diverse as its product lines.
Catalina Research reported that while battling
the same volatile raw materials costs and
weak demand as broadloom, area rugs got a
boost from the trend to hard surface flooring as
consumers often added a rug to their new hard
surface floor. Rugs also benefited by being a low
cost way to refresh the look of a room.
Most of the increase was estimated to
come from sales of imported products, which,
including carpet, were up from $1.86 billion
in 2010 to $2.03 billion in 2011, according to
Catalina. Rugs are estimated to account for
60 to 70 percent of that total.
In many ways, the area rug business is the
opposite of the wall-to-wall carpet business.
Most broadloom sold in the U.S., is made in
the U.S., while most area rugs sold here are
imported. While wool accounts for a low
single digit percent of all U.S. broadloom,
industry sources estimated that more than 90
percent of imported hand knotted and hand
tufted rugs are made of wool.
Challenges
The greatest challenge in 2011 continued
to be price pressure brought about by a combination
of forces, according to Bill Kilbride,
president of Mohawk Home. “First, the U.S.
economy is not fully recovered, so getting the
consumer to spend disposable income on rugs
is an issue,” Kilbride explained. “Those consumers,
who are shopping, are on a quest for
value,” he said. The second issue is the price of
raw materials, whether up or down. “If those
prices increase, it is virtually impossible to reprice
your product, but, if they go down, customers
expect our prices to go down,” he noted.
For importers, conditions in countries
where rugs are made and the cost of shipping
added to the challenge. “Last year was a perfect
storm, where the housing market, as well
as the overall economy, did not show any
signs of relief, while our industry in general
was hit with price increases due to higher cost
of raw materials and labor,” said Alex Peykar,
principal of Nourison.
Aaron Gray, director of marketing for
Oriental Weavers/Sphinx, agreed that the
ever-increasing cost of raw materials is the
greatest challenge as it “obviously eats at our
overall margins.”
Ron Couri, president and CEO of Couristan,
noted, “The greatest challenge was to drive
sales. We introduced 67 new rugs in January,
but the tough part is getting stores to commit.
Our residential area rugs and broadloom businesses
are seeing up ticks, but not as great as our
hospitality business. In our rug business, hand
knotted rugs are the slowest, while outdoor
rugs are growing fastest,” Couri stated.
In terms of channels of distribution, Couri
added, “Department stores, internet retail and
catalogs are performing the best for us. Macy
has reset 180 stores with fresh rugs this year.”
Couristan is looking to broaden distribution
even more, according to Couri. “In rugs,
we are looking at new distribution in home
centers and are considering big boxes too.”
Signs of a better 2012?
Continuing the pattern of the past few years,
the start of 2012 is looking better. Virtually all
2011 key points
Area rugs continued to contend with price
pressure at all levels of the market, but
managed to increase sales by about 6
percent, generated by consumers choosing
a value-priced rug to freshen a room
or accent a new hard surface fl oor.
Competition from imports may be lessening
as labor costs in China and India rise
as well as shipping costs. Currency rates
are also favoring domestic production.
Fashion and innovation are critical as rug
manufacturers win sales with new kinds
of products such as outdoor rugs and explore
new channels of distribution.
the rug suppliers FCW spoke with reported
sales in the first quarter running ahead of the
same period a year ago. Nourison’s first quarter
sales are up 5 percent, according to Peykar
and the company is striving for a double-digit
increase for the year.
In the first quarter, OW was slightly
ahead compared to 2011, as Gray sees more
optimism in the marketplace and expects
that momentum to carry on the rest of the
year. “We are being aggressive in introducing
new products and bringing them to
market,” he added.
Despite escalating raw materials costs
and soft demand, Jeff Brown, division vice
president for Shaw Living, noted a few
bright spots, saying, “New collections and
constructions were well received by customer
base,” and “Comps were better in
the first quarter of 2012 than the previous
year.” Still, Brown cautioned the industry
to “Expect to see slowdown and more
worry about consumer demand,” in the
second half. FCW
Uneven
Continued from page 9
Balancing cost increases, lower demand
During the recession and into an anemic,
uneven recovery, the carpet industry has done
everything possible to serve its customers and
survive. Mills shuttered excess capacity and
cut back labor forces, but all the cost cutting
could not make up for increases in the cost of
raw materials.
“There is no question that over the last five
years, even in this recessionary environment,
manufacturers have experienced a rise in raw
material costs,” Merritt explained. “Certainly
these prices rise and fall over time but the
overall trend has been up. As costs rise, we have
to also consider the first rule of marketing —
supply and demand.”
Even with a highly specialized product,
Interface experienced the same situation.
“We’ve had to pass along cost increases,
where appropriate, to our customers. To
balance raw materials costs, we’re also
constantly driving product innovation and
Chart 6
Carpet & area rugs exports* value and volume
(in billions)
1.5
1.2
0.9
0.6
0.3
0
$1.03
1.05
design.” said Wells.
$1.10
1.09(R)
2007 2008 2009 2010 2011
Market sales
$0.85
2012 and beyond
The carpet industry sees reasons for
optimism in 2012. “Retail sales continue
0.79
$1.00
Square feet
0.95
$1.07
1.01
*Includes exports of roll goods, bathmats, area rugs, auto and aircraft carpeting and artificial grass.
Source: Catalina Research
R=Revised
to be a challenge through every channel,”
Merritt noted. Still, “The new single family
home business has shown some signs of life
and they now believe we will see roughly
369,000 new homes sold in 2012. This
would be nominally a 20 percent increase
over last year, still far from healthy but
better. As we look to the fall, we of course
have the election issues to deal with. Historically,
this has a dampening effect on
the fall business, but once we are past that
event, I look for better things in 2013.”
Lape at Mohawk added, “So far, 2012 has
not been as robust for the residential carpet
market as expected,” he said. “Still there are
positive signs — gas prices were going down,
there is credit available and the builder
market is growing, although nowhere near
the numbers before the recession.”
Boe said that so far in 2012, business
has been start and stop. “We had a surge
in April, May and slowed down again in
June,” he noted.
Dixie is looking to a stronger second half
in 2012. Frierson said, “So far in 2012, residential
started out great in January, then each
month since has been disappointing. We still
have had some growth, but it’s at the upper
end of the business and not as good as it was
in 2011. We think the second half will be
better, but not until after the election.” FCW

July 23/30, 2012 Carpet & Area Rugs 11
Chart 7
Carpet & area rug purchases by end-use market
(Total: $9.51 billion)
21.0%
7.4%
2.2%
3.7%
0.3%
65.4%
Residential replacement
$6.22 billion
Commerical replacement
$2.00 billion
Transportation
$0.70 billion
Commerical new construction
$0.35 billion
Residential contract
$0.21 billion
Manufactured housing
$0.02 billion
Source: Catalina Research
Wells: In trying to balance increased costs
and raising prices, we also place emphasis on
our ReEntry Recycling Process where we’re
taking back more used carpet and recycling
— turning backing into new backing plus
face fi ber into new face fi ber. Using more
recycled materials helps us minimize the
dependency on virgin, petrochemical based,
raw materials for the short and long term.
Frierson: Balancing increased costs with
declining sales is a juggling act. It’s a very hard
issue to solve — much lower volume with
higher raw materials and other costs — and
get back to a normal return.
Merritt: I think there are some segments
where this trend may be continuing, such as
in new construction in apartments, where
more living space is being converted to
laminate or LVT while the bedrooms remain
carpeted. This trend may be occurring in
certain segments of the fl ooring market but
it’s certainly not an overall market trend.
In commercial, carpet continues to hold its
own or grow share. And while we’re seeing
a trend toward smaller homes, people still
want three or four bedrooms and these are
still carpet in the majority of spaces. I just am
not sure carpet is continuing to lose square
foot share.
Perspective
Carpet industry leaders Tom Lape, president
of Mohawk’s residential and commercial
businesses; Randy Merritt, president of Shaw
Industries; Ralph Boe, CEO of Beaulieu of
America; John Wells, president and CEO of
Interface Americas; and Kennedy Frierson,
COO of The Dixie Group, share views on
challenges and strategies.
What can manufacturers do to answer
today’s greatest challenges?
Lape: Carpet manufacturers are faced with the
challenge of how to reverse the trend away
from carpet. Carpet price increases in 2011
are thought to have pushed some consumers
to choose hard surface because, while still less
expensive than most hard surface fl ooring,
the cost difference was less than in the past.
We have got to excite the consumer with
innovation and exceed their expectations.
Boe: The decreased market share of carpet
versus hard surface fl ooring for the past fi ve
years comes down to fashion. Consumers will
have to become passionate about soft surface
fl ooring again. Carpet is clearly preferred for
bedrooms, where consumers want softness
under foot. Carpet is also the value leader.
Chart 8
Carpet & area rugs market
average value per square foot
$1.0
$0.8
$0.6
$0.4
$0.2
$0.0
$.89
$.93(R)
$.88(R)
$.88
$.93
2007 2008 2009 2010 2011
Source: Catalina Research
R-Revised
When
Less
is
More!
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12
Wood
July 23/30, 2012
Hardwood grows despite economy, housing market
By Mallory Cruise
The hardwood industry experienced a slight
sales growth in 2011, with hardwood dollar
sales rising 4.3 percent to $1.82 billion
from $1.74 billion in 2010, according to
Catalina Research. Industry executives said
that there are a number of reasons for the
increase in sales, and while they are hopeful
that the market will continue to experience
growth, many said that they have realistic
expectations for the second half of this year,
noting that there needs to be improvement
in certain areas of the economy in order for
hardwood sales to see significant growth.
“The hardwood business is in early
recovery and its growth is highly dependent
on the economy and the building market,”
explained Dan Natkin, director of wood and
laminate business, Mannington.
Industry executives said that other factors
fueling growth are an increase in consumer
confidence and lower housing prices.
“Pent up demand is a contributing factor.
People lived with the flooring they had while
the economy was in turmoil,” explained
Michael Martin, CEO, National Wood
Flooring Association (NWFA). “Now that
consumers are more optimistic, they are
making the purchases they had been putting
off. In addition, small gains in the housing
market will have an impact on wood flooring
as well.”
Don Finkell, CEO of Anderson Hardwood,
agreed. “The general economy has been the biggest
factor influencing the hardwood market,
there aren’t enough buyers going into stores.
We are going to continue to try to add value to
our hardwood products and offer lower prices
because we see more price competition in the
market place,” he said.
According to Harry Bogner, senior vice
president of hardwood at Unilin (a Mohawk
Industries Company), “During 2011, the
industry as a whole faced the challenges of
slow to flat recovery in new home and replacement/remodel
sales as well as increased raw
material and energy prices. This resulted in the
flat-to-slow industry growth rates that experts
had predicted.”
In order to meet pressures brought on by
the economy, Unilin launched new products
in 2011. “Mohawk and Columbia fared better
than the overall hardwood industry during
2011. We entered 2011 with the right mix of
competitively priced products for each of the
different audiences that our brands target,”
Bogner added.
Mannington’s Natkin said that ultimately
it comes down to price versus raw material.
“We’re starting to see an increase in price
on the raw material side. Builders, in order
to qualify people into homes, are going to
2011 key points
Hardwood sales increased 4.3 percent in
2011 to $1,824.3 million from $1,749.1
in 2010 and hardwood square-foot sales
increased 4.1 percent to 919 million,
from 882.8 million in 2010.
While hardwood imports grew by 29
percent from 2009 to 2010, industry
executives said that growth is beginning
to slow down. Imports for 2011 were up
11.1 percent in dollar sales to $702.3
million and up 12.2 percent in square
foot sales to 371.4 million.
Hardwood flooring exports were up 4.7
percent in dollar sales in 2011 to $136.9
million and up 4 percent in square foot
sales to 59.1 million.
Hardwood average price per square foot
rose 0.5 percent last year to $1.99 from
$1.98 in 2010. The category experienced
a bigger jump in 2010 when it went up
from $1.87 in 2009. Catalina reported
that the average hardwood pricing per
square foot continues to rise despite low
lumber prices.
Hard surface products, in general, have
been experiencing overall market share
growth taken from wall-to-wall carpet.
Ceramic tile, vinyl sheet and floor tile
and wood flooring have all seen market
share gain. Wood flooring’s 2011 market
share rose 0.2 percent in dollar sales
to 10.2 percent of the flooring market.
Note: Wood flooring sales include hardwood, softwood and bamboo flooring
as well as solid and engineered and unfinished and finished products.

July 23/30, 2012 Wood 13
Chart 9
Hardwood flooring market value and volume
(in millions)
2,700
2,325
1,950
1,575
1,200
825
450
2007 2008 2009 2010 2011
$2,184.2(R)
989.0
$2,101.6(R)
944.5
$1,505.9(R)
803.4
$1,749.1(R)
882.8
$1,824.3
919.0
Market sales Square feet R=Revised Source: Catalina Research
of visuals is good for the industry however
we need a significant increase in demand,”
said Poland.
Import growth slows
Hardwood flooring also witnessed an
increase in imports over the past year, though
not at the rapid pace of previous years.
Import sales were up 11.1 percent to $702.3
million and up 12.2 percent in square foot
sales to 371.4 million.
Goodwin at Armstrong explained that
an increase in costs and decrease in available
materials has had a negative impact on
import sales.
While imports remain a viable part of the
wood market, industry executives have noted a
renewed interest in Made in America products.
“There is a growing passion amongst
consumers, encouraged by today’s media,
of made in the U.S.A. We’ve been talking
with distributors and retailers about the
amount of working capital that they have
to tie up in imported goods, causing long
lead times. We encouraged them to look at
products, like those offered by Shaw, that
can be serviced immediately and don’t
have to tie up so much working capital and
inventory,” said Kevin Thompson, hardwood
category manager at Shaw. FCW
less expensive product. The days of putting
2,000 square feet of hardwood in the home
are gone because it’s the difference between
qualifying for a mortgage and not qualifying
for a mortgage. On the remodel side, it is still
a little weak but there are spurts of growth.
Remodel is critical because wood floors are
what people aspire to but sit back on until
equity in the home grows,” he explained.
Milton Goodwin, vice president product
management, wood, at Armstrong, agreed
saying that any growth in sales is dependent
on new home construction and as that
improves so will hardwood sales.
But, Finkell also pointed to overcapacity
as another issue facing the industry “The
laws of supply and demand cause prices to
go down,” he said.
Even given the challenges facing the
hardwood sector, Jim Gould, president of
the Floor Covering Institute, pointed out
that this category is one of the few product
segments that is seeing growth. “There
is a combination of factors attributing
to hardwood market growth. There is an
improvement with the wood floor itself,
the consumer wants a natural product,”
Gould said. “Hardwood is holding its own
or gaining market share against other categories,
which is what is most important.”
Philip Key, vice president of sales and marketing
at CFS, said he believes that hardwood
options are more expansive today than they
were before the recession, benefiting the consumer
and encouraging growth.
“Smart companies really looked at their
product offering and enhanced it, so today’s
homeowners who are ready to purchase a
hardwood floor have great options to choose
from that they didn’t necessarily have before
the recession,” he said.
In fact, Mullican Flooring has upped
its product offering considerably, according
to Mullican president Neil Poland.
He said that while expansions in product
offerings are an advantage , there needs to
be a growth in consumer confidence when
it comes to spending.
“We are manufacturing 100 percent
more styles and colors (SKUS) versus 2007
therefore it is very challenging to control
production costs, sampling costs and marketing
expenses. Overall the diversification
To make the best
flooring, we employ
the best technology.
Our eyes.
With decades of experience, our wood flooring experts
have the most highly trained eyes in the industry. Because
of them, only the finest quality boards make it into a Mirage
box. And your showroom. Our commitment to perfection is
what keeps you voting us #1 in quality year after year.
MIRAGE PREFINISHED HARDWOOD FLOORS

Chart 10
Hardwood purchases by end-use market
(Total: $1,824.3 million)
0.20%
Hardwood flooring market exports value and volume
(in millions)
180
150
120
90
60
30
0
10.5%
Chart 11
$137.8
8.8%
62.9
4.1%
58.9%
17.5%
$142.7
64.5
Market sales
$102.7
Residential builder
$319.3 million
Residential replacement
$1,075.0 million
Manufactured housing
$3.1 million
Commercial new construction
$191.6 million
Commercial replacement
$160.5 million
Transportation
$74.8 million
2007 2008 2009 2010 2011
48.3
Square feet
$130.7(R)
56.8(R)
Source: Catalina Research
$136.9
59.1
R=Revised
Source: Catalina Research
Chart 12
Hardwood flooring market average value
per square foot
$3.00
$2.50
$2.00
$1.50
$0.0
Chart 13
Hardwood flooring market imports value and volume
(in millions)
800
700
600
500
400
300
200
100
0
$313.6(R)
$2.21 $2.23(R)
2007 2008 2009 2010 2011
R=Revised Source: Catalina Research
152.2
$572.8(R)
258.3
$1.87(R) $1.98(R) $1.99
$489.9(R)
282.4
2007 2008 2009 2010 2011
Market sales Square feet
R=Revised
Source: Catalina Research
$632.0(R)
330.9(R)
July 23/30, 2012
$702.3
371.4

July 23/30, 2012 Wood 15
Perspective
Top industry executives Dan Natkin, director
of wood and laminate business, Mannington
Mills; Jim Gould, president of the Floor Covering
Institute; Michael Martin, CEO of the National
Wood Flooring Association (NWFA); Don
Finkell, CEO, Anderson Hardwood Floors; Harry
Bogner, senior vice president of hardwood, Unilin
Flooring; Milton Goodwin, vice president product
management, wood Armstrong; Kevin Thompson,
hardwood category manager at Shaw; and Neil
Poland, president, Mullican Flooring, talk about
the state of the hardwood industry and where
the areas of opportunity can be found.
Poland: The greatest challenge for us as a
manufacturer is the increasing demand for variety
from consumers, builders and interior designers.
What are the bright spots in the
hardwood industry?
Natkin: There are early signs that new home
construction is slightly on the rise; big builders
are slightly bullish but still fragile.
Gould: I think the brightest spots in hardwood
fl ooring have been the improvements in
product quality and installation methods.
Eliminating formaldehyde and reducing VOCs is
also being addressed.
Martin: A bright spot in the industry is that
we’re seeing the fi rst real gains that we’ve seen
in the past fi ve years.
Finkell: We’re starting to see some markets
(mid-Atlantic, south-west, mid-west) experience
improvement. Another bright spot is we have
historically low mortgage rates (down to less
than 5 percent.)
Bogner: Consumers are continuing to demand
products with a strong price/value relationship.
Our company’s leading-edge manufacturing
technologies will continue to enable our Mohawk
and Columbia brands to offer stunning products
at a competitive price.
Thompson: I think we’re in a very conservative
growth mode. I have seen a couple of industry
projections that show a very gradual, modest
increase, maybe 5 percent or less over the next
three to fi ve years.
Poland: One bright spot is the increased demand
for maple, hickory, and, in general, species other
than oak. A second bright spot is handsculpted
and other surface textures are experiencing
signifi cant growth within the wood segment.
What was the biggest challenge for
hardwood sales growth over the past year?
Natkin: Price is at an all-time low for hardwood,
raw material is an infl ationary profi t. There isn’t
the ability to leverage a price increase because
of excess capacity and increased competition.
Gould: The biggest challenge to sales growth is
the economy. Wood flooring is considered a longterm
investment and when the economy is not
stable or people are not secure in their jobs, they
don’t want to make that long term investment.
Commoditization is an industry challenge, not
necessarily a challenge limited to hardwood.
Martin: Raw material shortages. Since lumber
prices were so low, many forest owners chose
not to harvest, so that led to raw material
shortages. In addition, Lacey affected imports,
which have dropped in recent years.
TOMORROW ’ S SUCCESS
begins today.
Finkell: The rest of this year will continue to be
diffi cult but we expect to see improvement
next year. I think, to me, it’s still all about
foreclosures. One positive we’re seeing is
foreclosures getting processed, so I think until
they work through the foreclosures and get
those incredibly cheap houses out of market,
I don’t see how housing can recover.
Bogner: In response to the economic turbulence
of the past few years, those consumers who
were worried by the unfamiliar economic dip,
many times, continued during 2011, to simply
purchase the cheapest fl ooring they could fi nd,
just to get something on the fl oor.
Goodwin: The biggest challenge continues
to be a decline in total volume due to the
decline in the housing industry. There are a
lot of players vying for a smaller pie. That puts
pressure on pricing.
Thompson: Continued slow growth in new
home construction — that has been the biggest
challenge. Also, economic uncertainty. Gasoline
prices have come down, but I think all the
key indicators from an economic standpoint
continue to affect all of fl oor covering and with
hardwood being the largest ticket item of all
fl oor covering options, it makes it the one that
may have suffered the most.
Mohawk understands the demands of your business. We offer all the tools
you need to differentiate your store, increase your traffic, and grow your
sales. As the most recognized flooring brand in the industry, you can count
on Mohawk to help you succeed...today.
MohawkFlooring.com/retailers
CARPET | HARDWOOD | LAMINATE | TILE | AREA RUGS

16
Tile & Stone
Tile & stone inch ahead
By Tanja Kern
2011 tile and stone numbers showed that
the U.S. really is seeing the “beginning of the
end” of the recession.
Ceramic tile dollar sales increased by 6
percent to $2.21 billion, while square foot
sales rose by 4.5 percent to 2.08 billion — the
highest rate for any flooring material. Stone
sales were up 0.2 percent to $1.06 billion —
and square foot sales nudged up 0.57 percent
to 261.5 million square feet.
“It was not a great year, but we have already
hit bottom, and we are a little bit ahead of
before,” said Donato Grosser, consultant to
the tile industry and owner of D. Grosser &
Associates, Ltd.
As the overall economy recovered in 2011,
manufacturers felt confident enough to pass
along rising material, energy and transportation
costs to consumers, but price competitiveness
actually improved for ceramic tile
because the sector experienced only moderate
raw material cost increases.
The average square foot price stayed steady
in 2011 — up just a penny. According to
Catalina Research, average square foot selling
prices stood at $1.06 per square foot in 2011
with the category gaining market share — 12.4
percent of total U.S. floor covering dollar sales.
As the struggling housing market shows
signs of improvement, there has been a reversal
in the six-year trend in smaller home sizes,
according to the American Institute of Architects.
This is the case for custom and luxury
homes, as well as for additions to existing
homes. A preference for outdoor living, especially
blended indoor/outdoor living, continues
to increase. These consumer preferences
are opening more doors for natural stone and
high quality porcelain tiles.
Segment breakdown
The current administration’s recent housing
scorecard shows signs of burgeoning
stability in the housing market, with home
equity numbers rising 7.4 percent between
the fourth quarter of 2011 and the first quarter
of 2012. The scorecard, which is compiled
by the U.S. Department of Housing and
Urban Development, the Obama administration
and Treasury, noted that home equity
rose $457.1 billion in the first quarter of 2012.
Catalina Research market segment analysis
showed that homeowners are investing in
their homes with 41 percent of ceramic tile
sales going to residential replacement in 2011.
“Last year was better commercially and we
are seeing some movement in hospitality,
multi-family housing and retail,” said Lori
Kirk-Rolley, senior marketing director for
Dal-Tile. “I think that there is a lot of pent up
demand and we are seeing a lot of that on our
national accounts, on the retail side and with
large retailers.”
Non-residential construction accounted
for 25 percent of the tile market. The commercial
contract market held 19 percent of
the tile market.
“The commercial market is where we
are seeing the growth for Florida Tile,” said
Florida Tile marketing director Sean Cilona.
“The hospitality and healthcare segments are
doing pretty well and those smaller commercial
jobs — those types where people are
installing tile as a replacement floor coverings
are also doing well.”
Gianni Mattioli, president of Marazzi USA,
added, “We are already established in the
residential remodeling market and business
is picking up, but the commercial markets are
where we have made a lot of key investments
in people, marketing and technology.”
Import/Export
Although imports still comprise the majority
of U.S. consumption, due to the U.S. dollar
losing value to the Euro, import market penetration
has fallen in each of the last five years.
In 2011, imports accounted for 69.2 percent of
U.S. ceramic tile consumption — the lowest it
has been since 1998, according to Eric Astrachan,
executive director of the Tile Council of
North America (TCNA). “As you can see, we
are moving in the right direction,” he said.
There are six Italian-owned tile plants in the
United States — Marazzi USA with three locations,
Florim USA, Iris-Stonepeak and Florida
Tile. According to Ceramics of Italy, the Italian
tile association, those plants make up 50 percent
of U.S. ceramic tile production. “These companies
invested in the United State due mainly to
weaknesses in the dollar,” Grosser said.
2011 key points
Sales remained on the rise as consumers
continue to turn to hard surface flooring.
Ceramic tile value increased by 6.3 percent
to $2.21 billion, while volume rose
by 4.5 percent to $2.08 billion.
While imports still comprise the majority
of U.S. consumption and sales of imports
continue to grow (by 3.8 percent in 2011,
according to Catalina) the TCNA said that
imported product’s market share in comparison
to domestically made tile declined
over the last five years to 69.2 percent.
Look ahead
Despite the lingering effects of an overbuilt
housing market, the continued difficulty
to obtain financing for real estate projects,
budget shortfalls and the anxiety surrounding
the prolonged European debt crisis, there
are signs that the U.S. design and construction
industry will be improving and with it,
along with tile and stone industry.
Improved price competitiveness and
consumers’ overall rising preference for hard
surface flooring has already helped ceramic
tile experience some of the strongest industry
gains in the first half of 2012.
Ceramic tile sales (shipments minus exports
plus imports) are estimated to increase by 6.5
percent in square feet and 7.7 percent in dollars
in the first half of 2012 over the previous year,
according to Catalina’s second quarter report
for 2012. This could push ceramic tile square
foot sales to account for 12.3 percent of total
U.S. floor coverings square foot sales in the first
half, and 12.7 percent on a dollar basis. FCW
Chart 14
Ceramic tile market value and volume
(in billions)
3.5
3.0
2.5
2.0
1.5
1.0
$2.83 (R)
2.66
$2.51 (R)
2.26
$1.91 (R)
2007 2008 2009 2010 2011
1.85 (R)
$2.08 (R)
1.99
$2.21
2.08
Chart 16
Stone market value and volume
(in millions)
2,000
1,500
1,000
500
0
$1,689
436.4
$1,408
351.6
$1,079
2007 2008 2009 2010 2011
270.8
$1,062
260.0
$1,064
261.5
Chart 15
Market sales
Square feet
Ceramic tile imports value and volume
(in millions)
3,000
Source: Catalina Research R=Revised
Market sales Square feet
Chart 17
Ceramic tile export value and volume
(in millions)
80
Source: Catalina Research
2,500
2,000
1,500
1,000
500
$ 2,084 (R)
2,176
$1,721 (R)
1,684
$1,203 (R)
1,332
$1,276 (R)
1,393
$1,325
1,409
66
52
38
24
$52.3
56.6
$56.2
61.3
$50.3
55.6
$50.3
50.8(R)
$52.5
53.7
0
2007 2008 2009 2010 2011
10
2007 2008 2009 2010 2011
Market sales
Volume
Source: Catalina Research R=Revised
Market sales
Volume
Source: Catalina Research

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18
Tile & Stone
July 23/30, 2012
Perspective
Sean Cilona, marketing director for Florida
Tile; Gianni Mattioli, president of Marazzi
USA; Lindsey Waldrep, VP of Marketing
for Crossville; Granitifi andre & Iris Group
President and CEO Graziano Verdi; and Lori
Kirk-Rolley, senior marketing director for Dal-
Tile discuss today’s market conditions.
What trends are driving growth today?
Cilona: Stone is an expensive, higher-end product,
but we’re defi nitely seeing demand for natural
stone, like our PietraArt, Stone is a product that
has a long lifespan and the versatility is endless.
Mattioli: We continue to focus on new products,
new technology and new sizes. We have invested
highly in the inkjet and high-defi nition technology.
The wood look also seems to be very popular.
Verde: We’re convinced that the green economy
is important not only due to the ethical value of
environmental awareness and construction of
an eco-sustainable world in today’s society but
also because of the economic opportunities
and new business potential it has to offer.
Granitifi andre uses natural elements to recreate
some of the world’s best-known marbles
without the consequences for the environment
that come with extracting quarried marble.
Kirk-Rolley: While we’re seeing our growth
being driven on the residential remodeling
side, we are seeing a pickup in business in new
home construction and commercial projects.
Waldrep: We’ve always been strong in the
architectural market and our new launch Laminam
by Crossville is a full line of lean profile, large
format porcelain products through an exclusive
distribution agreement with Italian manufacturer
Laminam, a division of Systems Group. .
Chart 18
Ceramic tile average value
per square foot
$1.15
$1.10
$1.05
$1.06
$1.14
$1.05
$1.06
$0.0
$1.03
2007 2008 2009 2010 2011
Source: Catalina Research
Chart 19
Ceramic tile by
end-use market
($2.21 billion) 0.2%
19%
14.6%
25.1%
40.7%
Chart 20
$4.12
0.4%
Residential builders: $323 million
Residential replacement: $899 million
Manufactured housing: $9 million
Commercial new construction: $555 million
Commercial replacement: $420 million
Transportation: $4 million
Source: Catalina Research
Stone average value per
square foot
$4.00
$4.00
$4.08
$3.98
$4.07
$3.85
$3.87
$0.0
2007 2008 2009 2010 2011
Source: Catalina Research

July 23/30, 2012
Laminate
19
Flatline: 2011 highs, lows
By Raymond Pina
The U.S. laminate floor wholesale market
essentially remained flat in 2011, growing
just 0.13 percent in value due to rising prices
while declining 0.82 percent in volume,
according to Catalina Research.
The category’s wholesale value and average
square foot pricing stopped declining, and
domestic products overtook imports for the
first time since 2008. But sales volume was
dominated by the home center channel and
continues to decline due to pressure from
vinyl and engineered wood flooring. What’s
more, this trend is continuing through 2012,
according to Stuart Hirschhorn, director of
research, Catalina Research.
Chart 21
Laminate purchases by
end-use market
(Total: $894.2 million)
Chart 22
Laminate flooring market value and volume
(in millions)
1,400
1,200
1,000
800
600
400
200
7.5%
$1,275.6(R)
12.2%
Residential replacement
$718.0 million
Residential builders
$67.1 million
Commercial replacement
$109.1 million
1,160.2(R)
$1,047(R)
80.3%
Source: Catalina Research
1,038.9(R)
$901(R)
Market sales
“Overall demand for laminate flooring
has leveled off,” Hirschhorn said. “The
gains of domestic shipments were offset by
declines in imports last year. We do see an
estimated 1.5 percent increase in the first
half of 2012 but that will keep the category
well within the 950 million to 960 million
square foot range.”
Catalina estimated the 2011 U.S. laminate
floor wholesale market at 949.8 million square
feet and $894.2 million with an average square
foot price increase of 1.1 percent to 94 cents.
Domestic rising
While Catalina reports an aggressive
13.8 percent increase in sales volume for
domestically-made laminate product in
2011, overall category growth was stalled by
a 13 percent decline in imported product,
according to Hirschhorn.
“It’s been like a rollercoaster where
imports will out-pace domestics one year and
then it flip flops the next — though there’s
definitely a shift towards sourcing domestic
2011 key points
Laminate sales remain virtually flat in
2011, growing 0.13 percent in value and
declining 0.82 percent in volume.
Average square foot pricing rose 1.1
percent in 2011, though pricing was off
14.5 percent from 2007 and 53 percent
from 1997.
Domestic suppliers account for 51.2
percent of U.S. square footage sales, a
leading position not enjoyed since 2008.
Laminate has lost 9.1 percent of market
share since 2007.
912
$893(R)
2007 2008 2009 2010 2011
Square feet
957.7(R)
$894.2
949.8
Source: Catalina Research
R=Revised
Chart 23
Laminate flooring imports value and volume
(in millions)
600
500
400
300
200
100
0
$589.7(R)
550.0
$453.2(R)
461.9
Market sales
products to offset rising import prices and
increasing transportation costs,” he said.
As a result, Hirschhorn said U.S. laminate
floor manufactured shipments now account
for 51.2 percent of U.S. sales volume.
“There’s a paradigm shift from outsourcing
to insourcing happening in flooring,
especially in laminate flooring,” said Tony
Sturrus, president and CEO of Shippenville,
Pa.-based Clarion Industries. “This rapid
shift is primarily being driven by the shrinking
cost advantage China has versus the U.S.
Labor is a relatively small component of the
highly automated laminate manufacturing
process so that Chinese advantage has little
impact. China’s manufacturing costs are
going up and they’ve devalued their currency
but it’s not sustainable.”
The home centers, pricing pressure
Though domestic suppliers are taking
share, it hasn’t had an impact on average
square foot pricing because an estimated
60 percent of product is sold at low-cost
mass merchants such as Home Depot,
Lowe’s and Lumber Liquidators, according
to Catalina Research. While average square
foot pricing increased by 1.1 percent last
year due to increased raw material and
transportation costs, it remained down
14.5 percent from 2007 and a whopping 53
percent from 1997.
Catalina Research estimates laminate
floor sales represent 5.0 percent of the
industry’s total 2011 value, a 2 percent
decline from 2010 and a 9.1 percent
decrease from 2007.
However, laminate suppliers focused on
the specialty retail market said that average
pricing is increasing as dealers turn to better
quality goods.
“The better dealers have learned it’s not
worth the effort to try and compete against
home centers on pricing,” said Dan Natkin,
director of wood and laminate business,
Mannington. “They may have one or two
products at an attractive opening price
$461.9(R)
486.0(R)
$476.2(R)
Square feet
522.7(R)
$419.2
2007 2008 2009 2010 2011
Chart 24
454.8
Source: Catalina Research
R=Revised
Laminate flooring average
value per square foot
$1.20
$1.00
$0.80
$0.60
$0.40
$0.20
$0.0
$1.10
$1.01
$0.99
$0.93(R)
$0.94
2007 2008 2009 2010 2011
Source: Catalina Research
R=Revised
point, but their emphasis, and what their
customers are increasingly buying, are
thicker products with better quality and
overall design.”
Fred Giuggio, vice president of sales and
marketing at Kronotex USA, said average
price points are increasing in both the specialty
retail Formica brand business as well
as in private label business at Home Depot
and Lowe’s.
“The shift to domestic product has
increased quality and we’re seeing a subsequent
uptick in sales price,” he said.
Armstrong raised its laminate floor pricing
5 percent last month, but currently other
leading suppliers haven’t followed suit.
An increase in price wo n’t stick, said
David Carballo, vice president of sales, Faus.
“We just had a product line review at Home
Depot and these guys are putting a lot of
pressure on price,” he said. “Lumber Liquidators
is advertising price like crazy.” FCW

20
Resilient
July 23/30, 2012
Vinyl sales hit record high
By Raymond Pina
Sales of vinyl sheet and tile flooring hit a record
high wholesale value of $2.11 billion in the
U.S. last year, according to Catalina Research.
Though total 2011 vinyl floor sales grew 5.8
percent in value and 3.2 percent in volume,
it is the ongoing 15 percent growth in higher
priced luxury vinyl tile (LVT) and fiberglass
sheet flooring that has pushed the segment to
record heights.
Gains in up-market LVT and fiberglass
volume forced 2011 average vinyl floor pricing
up 2.9 percent over 2010. The category’s average
square foot price has jumped a remarkable
22 percent since 2007.
“New innovative products, many incorporating
locking systems for the first time, stimulated
demand and led to vinyl taking share from
every other category,” said Stuart Hirschhorn,
director of research, Catalina Research. “What’s
more, commercial, especially replacement
commercial, faired better during the recession
than the residential sector and vinyl has a huge
concentration of that commercial business.
2011 key points
Vinyl sheet and fl oor tile sales hit record
high with category sales increasing 5.8 percent
in value and 3.2 percent in volume.
Average square foot pricing for vinyl increased
2.9 percent this year over last year
and increased 22 percent from 2007.
Vinyl imports decreased 6.2 percent in
2011 as suppliers increase domestic
production of LVT and fiberglass sheet.
Other resilient flooring — which includes
cork, other plastics, rubber and linoleum —
increased in sales value by 4.2 percent but
decreased 2.5 percent in volume in 2011.
Average square foot pricing has increased
43.7 percent since 2007.
Chart 25
Resilient purchases by end-use market
(Total: $2,396.3 million)
0.6%
0.1%
Vinyl floors also had the highest increases in
pricing due to record oil and raw material costs
but they still remained competitive and highly
desirable, if not more so.”
Sales of commercial vinyl composition
tiles (VCT) also grew an estimated 3.3 percent
in volume to 1.01 billion square feet,
according to Hirschhorn.
Leading executives, who have reported double-digit
increases in their LVT and fiberglass
businesses over the past three years, agreed with
Catalina Research’s overall category growth
rates, but remain hesitant to declare 2011 a
record year.
“Having the category up 5 percent sounds
about right, but I don’t think anyone would
paint 2011 as a historically positive year,” noted
Allen Cubell, vice president, residential product
management, Armstrong Floor Products.
While LVT, fiberglass and VCT continue
to grow, Catalina Research estimates traditional
felt-backed vinyl sheet sales declined
7 percent to 907 million square feet in
2011, with volumes evenly split between the
residential and commercial markets. What’s
more, the report highlights that fiberglass
volumes, accounting for 195 million square
feet of sales in 2011, is trending to reach traditional
felt numbers by 2015.
“We see 2011 fiberglass sales at 184 million
square feet; so we’re in the same ballpark,”
said David Sheehan, vice president of
residential resilient business, Mannington.
“Residentially, we see vinyl sheet at 462 million
square feet. Sheet vinyl was up until 2010
when fiberglass sales started kicking in and
we think fiberglass now represents about 40
percent of residential sheet.”
Similarly, Catalina Research estimates
2011 LVT sales volume at 785 million square
feet. But some companies that focus primarily
on high end branded product said the
number is higher than their own estimates.
“You’d have to think a lot of that number
includes peel-and-stick tiles where the defini-
Chart 26
Vinyl sheet and floor tile market value and volume
(in billions)
3.5
3.0
2.5
2.0
1.5
1.0
0.5
0
$1.93(R)
3.27
$2.11(R)
3.25
tion of LVT kind of runs amuck,” explained
Cubell. “Lowe’s and Menards do bring in a lot
of cheap tile from Asia. If Catalina is looking
at those imported cash-and-carry tiles, then
I can understand how it gets to its number.”
Hirschhorn added, “There was a large
jump in peel-and-stick tile sales at home centers
where laminate would have traditionally
been used. There was also a record number
of new suppliers entering the LVT market.”
Imports decline, domestics grows
Despite a large number of suppliers, distributors
and retailers expanding into the vinyl
Chart 27
$1.82(R)
2.78
2007 2008 2009 2010 2011
Market sales Square feet
R=Revised
Vinyl sheet and floor tile imports value and volume
(in millions)
1600
1400
1200
1000
800
650
400
200
0
Chart 28
$605.8
1,503.7
$687.6
1,481.8
$613.8
1,247.4
$2.00(R)
$728.8
2.86
1,335.2
$2.11
$764.4
2007 2008 2009 2010 2011
2.95
1,251.8
Market sales Square feet R=Revised
Source: Catalina Research
Vinyl sheet and floor tile exports value and volume
(in millions)
400
market with imported LVT in 2011, Catalina
Research has category imports declining 6.2
percent for the year — mostly due to a shift
towards increased domestic production.
“It makes sense that vinyl imports were
down last year with both IVC US and Armstrong
making fiberglass here in the states,”
said Cubell. “We shut down a tile and VCT
plant in Montreal, Canada which brought our
imported tiles way down. And we shut our
fiberglass plant in England so our imported
fiberglass went to zero. And those import
numbers are only going to keep decreasing as
Continued on page 22
11.6%
31.2%
Commercial new construction
$747.5 million
Residential replacement
$743.5 million
Commercial replacement
$611.1 million
350
300
250
200
301.2
331.7
310.5
377.6
363.3
25.5%
Residential builders
$278.0 million
Manufactured housing
$13.8 million
150
100
50
$138.0
$160.9
$141.6
$163.8
$176.8
31.0%
Transportation equipment
$2.4 million
Source: Catalina Research
0
2007 2008 2009 2010 2011
Market sales Square feet
Source: Catalina Research

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22
Resilient
July 23/30, 2012
Perspective
What led to vinyl’s record year? Industry
executives Russell Rogg, CEO, Metrofl or;
Keith Lacagnata, vice president of sales and
marketing, FreeFit; Pat Buckley, vice president of
product management, Congoleum; Jonathan
Train, vice president of product development,
EarthWerks; and Allen Cubell, vice president,
residential product management, Armstrong
put it into perspective.
What fueled vinyl flooring’s rapid increase
in sales and market share in 2011?
Rogg: There is no doubt that the advent
of click LVT (luxury vinyl tile) has only
increased the amount of share the category
is taking from laminate fl ooring residentially
and commercially. Laminate has some
drawbacks. Using click LVT has become a
natural next step for folks who were familiar
with installing laminate.
Lacagnata: When you combine the tremendous
gains of LVT and fi berglass sheet, you begin
to understand how these products are
encroaching upon the entire industry. Without
Chart 29
Other resilient flooring* market value and volume
(in millions)
400
350
300
250
200
150
100
50
0
Chart 30
Resilient floor covering sales by volume
(Total square feet: 3.20 billion)
1.8%
0.4%
24.6%
$282.5
2007 2008 2009 2010 2011
6.1%
352.9
5.4%
$279.8
28.4%%
330.8
Market sales
$263.5
33.3%
question they are taking share from every
category, but particularly laminate. Gains that
would have gone to laminate got siphoned off
to LVT last year.
Buckley: Category price increases were
a big factor. When you combine that with
double-digit growth in LVT and sheet you
get impressive increases in category value.
LVT is by no means inexpensive, selling on
average for $3 or $4 per square foot. That
translates into $36 to $40 per square yard.
Catalina’s number might be a little high but
not too far off.
Train: Sheet vinyl increased slightly in total
volume due to an improved economy and
increase in value as more people continued
to move toward fi ber products. I also think
that price increases added to total value. For
LVT, my guess is that the value increased at
least 10 percent last year. And LVT continues
to gain market share from other categories
Cubell: The growth of LVT in general tends to
be at higher average unit values. Raw materials
have been going up. Freight has been going up.
There are a number of factors going on, all
driving the average square foot value up.
280.1
$270.1
250.2
Square feet
Source: Catalina Research
*Other resilient flooring includes cork, other plastics, rubber and linoleum
VCT/Linoleum
1,064.0 million
Vinyl sheet
907.0 million
LVT
785.0 million
Fiberglass backed
195.0 million
Rubber
57.0 million
Cork
12.0 million
$281.5
244.0
Other plastic and flooring materials
175.0 million
Source: Catalina Research
Chart 31
Other resilient flooring* imports value and volume
(in millions)
Chart 32
Other resilient flooring* exports value and volume
(in millions)
Chart 33
Other resilient flooring* average
value per square foot
$1.20
$1.05
$0.90
$0.75
$0.60
$0.45
$0.30
$0.15
$0.0
240
210
180
150
120
90
60
30
0
100.0
87.5
75.0
62.5
50.0
37.5
25.0
12.5
0
$0.80
$106.1
$27.6
2007 2008 2009 2010 2011
$0.85
196.7
51.4
$0.94
$43.3
Market sales
1.08
91.2
1.15
2007 2008 2009 2010 2011
*Other resilient flooring includes cork, other plastics, rubber and linoleum
Record high
Continued from page 20
$107.6
230.3
2007 2008 2009 2010 2011
Market sales Square feet
Other resilient Includes imports of flooring made of other plastics, cork, linoleum, rubber and other materials.
Mannington shifts more of its LVT production
to its new Amtico facility in Georgia.”
Amtico, Armstrong, Centiva, Congoleum,
Mannington and Tarkett all supply the LVT
market with domestic made product.
“Most of our products are made in the U.S.A.
and have always been so,” said Pat Buckley, vice
president of product management, Congoleum.
“Our most popular products — DuraCeramic,
DuraPlank II and AirStep — are all made here
and increasing in popularity.”
Other resilient flooring
Sales of cork, rubber, linoleum and floors
$95.4
$34.3
227.7
70.9
Square feet
$109.6
$40.9
213.5
76.7
$117.2
$40.4
74.7
161.9
*Other resilient flooring exports include flooring made of other plastics, linoleum, rubber and other materials
Chart 34
Vinyl sheet and floor tile average
value per square foot
$0.8
$0.7
$0.6
$0.5
$0.4
$0.3
$0.2
$0.1
$0.0
$0.59(R)
$0.65(R)
$0.65(R)
$0.70(R)
$0.72
2007 2008 2009 2010 2011
Source: Catalina Research
made of “other plastics” increased 4.2 percent
in value last year, mostly due to price
increases tied to higher raw materials costs,
while sales volumes declined 2.5 percent,
according to Catalina Research.
“When the economy gets back to normal this
segment will get back to where it was before,”
said Ivan Stoler, president, Allstate Rubber.
Valued at $281.5 million dollars in 2011,
this “other” category is near its 2007 record
sales level of $282.5 million dollars, but
down some 30.9 percent in volume during
the same period. Currently, the category
accounts for less than 2 percent of industry
sales. But, the segment has experienced the
industry’s highest price increases with 2011
average square foot pricing up 6.5 percent
over 2010. FCW

July 23/30, 2012
23
Mohawk releases third sustainability report
[Calhoun, Ga.] Mohawk Industries, Inc.,
based here, has released its third annual
sustainability report this year. While adhering
to the Global Reporting Initiative (GRI)
standard, in place since their first report, the
company entrusted FIRA, an independent
firm headquartered in The Netherlands, as
the report assurance provider.
“We are dedicated to integrity and open
communication with all of our stakeholders,
which is why we have always used an
independent auditor to verify the accuracy of
information before we release the report,” said
Jenny Cross, director of global sustainability at
Mohawk. “Using GRI standards to report the
progress we’ve made in our sustainable practices
ensures that our organization is measuring
and documenting its practices in a manner
consistent with global best practices.”
Mohawk stressed the importance of
understanding that sustainability is more
than just environmental initiatives — people,
the planet and profit are the pillars. “If we
don’t keep our people healthy and smart, our
business will not be sustainable,” said Cross.
During 2011, for example, Mohawk
expanded Healthy Mohawk, one of its most
successful wellness programs to date. (The
basis of the program was to combine telephonic
specialty nurse management and
on-site Healthy Life Centers [HLC] to the
most densely populated employment centers.)
Two new HLCs have been set up in the
Dallas area for Dal-Tile employees.
From 2010 to 2011, Mohawk saw a 7 percent
increase in preventative care, a 9 percent
decrease in radiology and scans, and a 50 percent
decrease in diabetes-related hospital stays.
In four Georgia HLC locations, exercise and
nutrition classes are now offered.
New initiatives to sustain the planet
include adding an on-site fueling station for
its vehicles reducing the amount of miles its
trucks must drive to and from an off-site location
by 39,000 miles a year. “Typically at our
distribution station we would go fill up, but
your vehicle can only be so heavy. We would
have to go back again and put the rest of the
product on. No w, we can do it on-site and
take the mileage out,” said Cross.
Mohawk is continuously working towards
their goal of becoming 25 percent more water
and energy efficient by 2020. It has changed
its dying process for carpet, and now uses the
continuous dye method which uses less water.
Though the company experienced a 4.8 percent
increase in water usage in from 2010-2011 due
to the state of the market and their product mix
changing slightly, “[Mohawk] expects the spike
to work its way out in the coming years,” predicted
Cross. “We appear to be on track to meet
our goals.” Over the last six years, Mohawk has
reduced water usage by 1.13 billion gallons.
— Taryn Baum
FloorForce partners with Fabulous Floors
[Boca Raton, Fla.] FloorForce has
announced a marketing partnership with
Fabulous Floors Magazine. Fabulous Floors,
the first consumer magazine devoted solely to
flooring styles, will provide a widget for Floor-
Force retailers to put on their websites, which
opens a digital version of Fabulous Floors
Magazine, exclusive to FloorForce customers.
The digital magazine will provide consumers
with ideas and inspiration on flooring products
while ensuring that manufacturers have a direct
line to consumers. For retailers, the added sticky
content provides not only added value for their
customers but ensures that they remain on their
site longer — encouraging them to purchase
products or visit the store.
“The Fabulous Floors widget is just another
great example of the value that FloorForce
brings to the flooring retailer, the manufacturer
and to the consumer,” said John Weller,
marketing director for FloorForce. “We have
also launched a bi-monthly newsletter for our
retailers called CloudBurst, and a blog site
named Floorboard that is plum full of content
that our retailers can use to populate content
onto their own social media networks. Both
of these were developed to further our one
and only goal of helping the flooring retailer
accelerate sales through technology.”
Added Fabulous Floors publisher Margo
Locust, “Floor Force websites currently reach
more than 36,000 consumers searching for
flooring per week and this number is growing
all the time — having this exposure for our
informative content is wonderful.” FCW
Trade associations partner with UPenn
[Philadelphia] Commencing in January
2013, the University of Pennsylvania will
begin a partnership program with the Association
of Rug Care Specialists (ARCS), National
Wood Flooring Association (NWFA), North
American Association of Floor Covering
Distributors (NAFCD) and the World Floor
Covering Association (WFCA) to provide
participants with an opportunity to study the
essentials of business management and to
develop new skills and strategies needed to
grow their businesses.
“The partnership is an incredible opportunity
for trade association members to develop
their management skills and learn strategies for
growing their business at one of the country’s
most respected academic institutions,” said Jim
Walters, immediate past chairman of WFCA.
“We have been interested in small businesses
for a while — we have the Pennsylvania
Small Business Development Center
housed on our campus and we got them
involved in the idea of creating a program to
support trade association members in growing
their businesses,” said Rita McGlone,
executive director of training and consulting
services at the University. “The common
theme throughout the program will be to utilize
each other by working as peers in small
groups towards a particular goal.”
The program will run anywhere from 9-12
weeks, a length that will be determined once
the curriculum has been finalized. It will
combine traditional face-to-face classes with
online courses to minimize time spent away
from businesses.
While not a credit-granting program,
partakers will obtain a certificate from the
University upon completion. “They will
be able to receive actual skills to take back
to their businesses and implement them
in real time to be able to see the return of
their dollars quickly,” said Ken Adams,
president and CEO of ABC Oriental Rug
and Carpet Cleaning and a member of the
ARCS board of directors.
The University is looking for 25 to 40
participants, qualified by being a member
of at least one of the associations and by
being either a business owner or in a position
of management in the industry. “Our
members were surveyed to see who would
be interested, and we provided those
results to UPenn. After speaking with the
other associations, it was decided that there
was enough interest to move forward,” said
Anita Howard, senior director of communications
and events, NWFA.
“Most of the businesses in our industry
are run by generations of families, and now
we have a younger core of people coming
in. The economy and business environment
has totally changed — we knew a course that
taught management skills wo uld be something
that would be great for us,” said Adams.
The partnership will maximize the
resources available at the University,
including the Center for Organizational
Dynamics, Department of Economics, and
the Wharton Small Business Development
Center. Potential courses include Marketing
for Success, Financial Management,
Family Business Planning and Succession
Issues, and Negotiating Skills. FCW
Shaw’s Epic
Continued from page 3
Shaw’s Kathy Young, director of marketing,
said the company is thrilled that De
Giulio chose Epic for this year’s kitchen.
“It’s always a pleasure to work with the
kitchen designer to choose a Shaw floor that
brings his or her dream kitchen to life, and
Epic has provided such a strong foundation
for this year’s stunning Kitchen of the Year,”
said Young. “Top kitchen designer Mick
De Giulio has merged the beauty and hand
detailing of our Epic hardwood with such a
fun and dynamic chevron design to create a
truly fashion-forward style statement in this
fabulous kitchen. The result is a truly inspiring
project for home enthusiasts.”
Shaw is employing a number of marketing
initiatives in order to tout its featured
Epic hardwood flooring on the consumer
level. Through social media outlets such as
Facebook, Pinterest and its ShawFloors.com
website, the company is showcasing photos,
insightful descriptions and special insider previews
of the kitchen.
According to Christina Honkonen, marketing,
communications specialist at Shaw,
“This creative content empowers Shaw consumers
with rich interior design and flooring
inspiration. With new style ideas around
every corner, from the chevron design created
with our Epic hardwood in the butler’s
pantry to creative tabletop displays that
provided finishing touches.”
Shaw also created a marketing kiosk with
two tailored promotionals that encouraged
visitors to ask the company specific questions
relating to flooring installation, design ideas
and flooring maintenance. Each Kitchen of the
Year visitor could register to win a $1,000 floor
giveaway, and a 10-percent off discount was
made available to everyone.
“Our outreach this year was designed to
spark real and insightful dialog with our customers
that will ultimately lead to a visit with
their nearest Shaw retailer,” added Honkonen.
Other featured brands in the kitchen
included KraftMaid cabinetry, Whirlpool
appliances and Kohler faucets.
— Mallory Cruise

Marketplace
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Randy Me ritt
By Kimberly Gavin
ple realize,” he said.
s a ds value
By Janet Herlihy
itself. “We create value by sharing knowledge
that helps our customers make more money
— be it bath rugs retailers, designers in commercial
o retailers in a depre sed residential
market. It drives our i novation and helps
people partner with us long term,” he a ded.
“If we don’t kno what the consumer
wants, we can’t deliver it,” a ded Gary
Johnston, senior marketing manager. “If we
don’t know how she shops, we can’t help our
retailers deliver the right experience.”
Flooring sho pers today fa l right in line
with census age groups, the research shows:
26 percent are betw en 25 and 34; 26 percent
are betw en 35 and 4; 26 percent are betw en
45 and 54; and 2 percent are between 5 and
65 years of age, respectively.
party to further validate the report.
Most are colleg educated — 32 percent have
Introducing Dr. Erich Joachimsthaler, an
an undergraduate degr e, 29 percent have some [Las Vegas] Mohawk’s 20 1 Fiber Satisfaction
Study put SmartStrand to the test keting and branding and founder of Vivaldi
expert and author on busine strategies, mar-
co lege and 18 percent have a post-graduate
degr e. The majority also work full time (45 with consumers and the result showed that Partners, Tom Lape, president of Mohawk’s
SmartStrand buyers were significantly more residential and commercial carpet busine s,
satisfied than nylon buyers. The study results said, “We went outside the industry to s e if
were revealed at Surfaces.
SmartStrand rea ly stands up to its claims.”
cording to the report, buyers noted Joachimsthaler was contracted to make
wit how easy Smart-
sure the research could pa s the rigor of
p e review and presented his findings at a
on here. He confirmed the research
0, 0 consumers and
ple,
ance to
19
By Amy Joyce Rush
iodical
expanding internationa ly.”
Continued on page 6
By Kimberly Gavin
of brands.
officer for Invista.
Brian Carson
fiber does both.”
John Turner, Jr.
Invista’s TruSoft
loor Covering W ekly a nounces th entries in its third annual Gr en-
Step Awards — a program that recognizes the industry’s path in environmental
sustainability and responsibility. Th entries now go to a
distinguished panel of judges who wi l selec this year’s recipients.
“This industry has b en, and continues to be, a leader in the gr en movement,”
said FCW’s executiv editor Kim Gavin. “From i novative produc to
proce ses and practices that are second to none, the floor covering industry
continues to make great strides in it sustainability efforts and provide lead-
A l ok a the 20 1 entries for Gr enStep begins on page 4. The judges’
ership to other industries.”
takes place in Dalton, Ga.
Continued on page 17
By Janet Herlihy
After nine years of Carpet America Recovery
Effort (CARE) leadership, combined with support
from a l segments of the industry, carpet
reclamation/recycling is back on its way to
becoming common practice in the U.S.
FCW Insider
o dical
Continued on page 4
Some recycling centers were forced out of
business while others stockpiled post consumer
(PC) carpet, hoping for a time when
Continued on page 18
Continued on page 19
al
By Janet Herlihy
Continued on page 14
great Surfaces
26
The Last Word
Finally, the real numbers
This is the 20th year that Floor
Covering Weekly delivers its
Annual Statistical Report
of the size and scope of the flooring
industry. Twenty years ago, we were
the only ones to bring accurate, vetted
data to the industry at large — the only others who had
access to this kind of information were large companies,
mostly manufacturers, who had to pay for it. Today, you
have access to some of the exact same data they do.
Back then, no one could say with any accuracy — outside
of their own small world and product segment — the size
or scope of the market. Certainly, there was no consensus
as each manufacturer had its own point of view. Too often,
those manufacturer’s views were colored by their own limitations
— the market segments they served, even down to
the actual products they made, and, of course, their own
competitive issues.
Today, those same limitations exist. And while conversations
with leading manufacturers and executives is part of
our process for understanding the changes in the market,
guesses about market size — even educated guesses — are
simply insufficient.
Instead, we stick to primary data — quantifiable numbers
that are tracked, updated and revised by the U.S. government
through various agencies. We understand that anecdotal
information is by its very nature inaccurate and incomplete.
By the numbers it looks pretty good
While it does have its place, it is really only through disciplined
research and a thorough and unbiased understanding
of the market that you can get any reliable data.
For our numbers, we turn to Catalina Research, a professional
research organization that is recognized as one of the
industry’s leading sources.
Once we have reliable data, we look to Jonathan Trivers
and his marketWise report to help make further sense of it
all. In marketWise, Trivers gives us a different and unique
view of what the industry looks like from the outside —
where products are sold, the forces driving retail and
changes in the market.
As a result of these efforts, we are able to bring to you
what is unequivocally the industry’s best data and market
analysis. We spend a lot of time, money and effort in getting
this information to you, but as far as we’re concerned,
you deserve no less.
In these times, more than ever, solid information is critical
for our readers and for this industry. The truth is that
nothing less than our very survival depends on it. Armed
with accurate data, key insights about the dramatic changes
happening throughout all channels, combined with a thorough
understanding of the dynamics behind the numbers
and maybe you have a chance. Otherwise, you’d just be
guessing. And when your job, your business and your family’s
future is on the line, guessing is just not good enough.
You deserve better.
— Santiago Montero
FLOOR COVERING WEEKLY
The Industry’s Business News & Information Resource
FCW Editorial and Sales Headquarters
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Editorial (516) 229-3600(516) 227-1342
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Editorial
Santiago Montero Publisher & Editor in Chief smontero@hearst.com
Kimberly Gavin Executive Editorkimgavin@aol.com
Amy Joyce Rush Managing Editorarush@hearst.com
Raymond Pina Senior Editor raypinafcw@yahoo.com
Mallory Cruise mcruise@hearst.com
Janet Herlihy jgherlihy@sbcglobal.net
Tanja Kernkern.tanja@gmail.com
Maya Avrasin m.avrasin@gmail.com
Columnists
Jon Trivers I take the fl oor
Chris Ramey Strategic insights
Kermit Baker Beyond the numbers
Ed Korczak As I see it
Manny Llerna Retailing road map
Marge Redmond Heard on Main Street
Christine Whittemore Flooring the customer
Tom Jennings First things fi rst
Advertising
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Vol. 61 No. 4 A Hearst Busine s Publication February 20/27, 2012 $4
Read on its own, this year’s annual statistical report
isn’t necessarily a shout-it-from-the-rooftops
.excitement fest. But taken against the backdrop of
the past five years, I think it’s pretty darned good.
While the value of U.S. flooring in dollars didn’t escalate
dramatically, sales did climb higher in 2011 than they did
in 2010. Sure it was a mere 2.5 percent, but considering
that change in dollars was negative in 2007, 2008 and 2009,
that’s a positive trend, especially coming on the heels of a
4.1 percent growth in 2010.
But square foot sales actually dropped in 2011 versus the
prior year, but by a very small 1.5 percent. Volume losses in
2007, 2008 and 2009 were in the double digits.
After two years of slipping beneath the $1.00 per square
foot mark, average flooring sales climbed back up to $1.02
per square foot. That’s a good thing, because the recession
we are still climbing out of was characterized by the
unusual escalation in raw materials prices. That left us with
the unusual position of low demand for the product but
high costs to produce and transport.
The ability to get square foot prices up indicates that
there was enough demand in 2011 to pass along raw materials
increases. The statistical report doesn’t measure it, but
manufacturer profitability (and hopefully distributor and
retailer) should have also seen improvements.
I see much of what has been happening over time continuing
to happen. Wall-to-wall carpet loses share to hard surface
Shaw’s Merritt sees improvement in 2012
L
Invista taps into today’s consumer
Invista spends a lot of time and money trying
to stay on top of wha the carpet consuming
public wants and n eds on behalf of its Stainmaster
brand. The latest round of research,
which surveyed 1, 0 fl oring consumers
about their shopping habits, is adaman that
the industry must be clear with its me saging
and recognize that the consumer is ge ting
information in a variety of ways, a cording to
Steve Griffith, chief marketing officer.
“We talk to the consumer every month
to different degr es,” Griffith explained to
FCW. The company conducts verbal phone
surveys, conducts online Internet panels as
we l as hires research firms to speak directly
to the customer. “The n eds of consumers —
especia ly in today’s climate — change more
ik every company in the fl oring busine
s, Shaw Industries has had to change will be contentious. There will probably be lenges, but it was strong through th end of
say this one will be like previous elections, it the commercial busine s. There will be chal-
course through the worst rece sion in more fighting on airwaves than we have s en 20 1 and backlogs are g od. We wi l k ep
modern memory, a period that’s also s en in the past. Everybody is frustrated on both riding that carpet tile horse, it’s rea ly hot.
drasti changes in the carpet industry. Shaw sides of the fence. How that will affect busine
s and titudes I don’t know. But that’s from tile versus broadloom is higher per unit.
And the beautiful thing for us is that revenue
president, Randy Merri t, recently spoke with
FCW Executive Editor Kimberly Gavin about certainly a factor at some level.
ge ting through the rece sion and how the fiber
How has the product mix changed?
shakeup has changed the busine s.
Does commercial hold up in 2012? Me ritt: In a lot of the residential cha nels,
Me ri t: That’s certainly po sible. That said, including multifamily, manufactured housing
What does 2012 look like to you?
the government wi l spend le s money. Institutiona
ly, there is le s money a the public some busine s coming back to the mid-to –
and retail, we’ve s en trading down. There is
Me ri t: We’ve a l said the same thing for the
last thr years, and we’ve b en wrong the sch o level. We wi l s e improving hospitality
busine s. Health care wi l continue to be mi dle gets be ter. As you trade down, you se l
mid-higher end. It’s not luxury, bu the u per
las thr e years. But anytime th economy is
trying to recover, things should gain momentum.
The big question to me is what impact some impact on spending, but I don’t see units but you have le s revenue.
g od. Corporately, the election may have le s per unit, so you se l the same number of
th election wi l have. I don’t think you can any reason why I would be pessimistic about
Continued on page 18
FloorForce’s new website
Continued on page 18
Dr. Erich Joachimsthaler
and Mohawk’s Tom Lape
SmartStrand gets high marks
Vol. 61 No. 1 A Hearst Business Publication January 2-16, 2012 $4
Ru se l Gri zle, incoming CEO, with Tom Davis, retiring CEO at Ma nington
Grizzle takes helm
at Mannington
Invista launches TruSoft
tion and development for Invista, elaborated,
“We’ve tried to build on the softne s and the
Invista is launching the latest in its arsenal of performance origina ly launched with Tacte
se in 20 and Luxure l in 2009. TruSoft is
soft fiber products for the residential carpet
to focus on how to improve ourselves in all market with TruSoft. This nylon 6,6 fiber is the softest Stainmaster available. A the same
areas of our operations, be more efficient, the newest addition to the Stainmaster family time, we want to deliver performance. This
[Salem, N.J.] Russe l Gri zle t ok over as move more product and therefore try to grow
CEO of Ma nington Mi ls on Jan. 1, and regardle s of the state of the industry.”
A cording to Invista executives, TruSoft Extremely soft fibers are available in the
while he brings with him a d ep respect for the While Gri zle is emphatic tha the company is the softest Stainmaster fiber to date. It also marketplace in bath mats, for example. But the
company’s we l-defined culture, he has a few wi l continue to focus on the core U.S. market offers the performance that consumers have softne s often comes at a price. The powderpuff
f el of a bath mat comes withou the tip
ideas of his own on how to grow the busine s. and that it wi l remain commi ted to U.S. come to expect from the Stainmaster brand,
“Our core values of who we are, are very manufacturing, he s es both global competition
and growth o portunity outside the U.S.
in mainstream residential se tings. TruSoft is
according to Steve Griffith, chief marketing definition and durability nece sary to perform
we l defined — care, do the righ thing, work
hard/play hard, control our own destiny. I “We wan to continue to expand on our T.M. Nuckols, director of product i novadon’t
s e those changing. They were part of the manufacturing base in the U.S. but also have
company for almost 1 0 years,” said Gri zle. international operations in the future. We
A the same time, he is we l aware of the don’t wan to lose sight of our core market,
n ed to organica ly grow and transform but you have to l ok at emerging parts of the
Ma nington acro several key areas including
lean manufacturing, waste elimination growth. So in the next five years or so, I s e us
world that have so much tail wind in terms of
and global expansion.
“We are trying to bring in some of the Gri zle has spent the last 21 months at
newer managemen techniques that you read Ma nington Mi ls as COO preparing to take
about from a l other parts of the world and the CEO position as Tom Davis retires after
other industries,” he said. “It’s a time for us
Preserving the past, positioning for future
Pre-Surfaces issue 2012
F
Carson and Turner reveal
leadership plans
GreenStep 2011
entries are in
[Calhoun, Ga.] Mohawk Industries named Brian Carson president of Mohawk Flooring
Busine s Unit and John “J.T.” Turner, Jr., as president of Dal-Tile begi ning this month.
Carson replaces Frank Peters and Turner fo lows Harold Turk. Here, both Carson and
er share their plans to direct the companies and their brands into 2012 and beyond.
FCW
Vol. 60 No. 7 A Hearst Busine s Publication April 4/11, 20 1 $4
FLOOR COVERING WEEKLY
selections wi l be a nounced thi summer when the a nual awards ceremony
Carpet reclamation and
recycling on road to recovery
The rece sion deal the nascent industry
a blow when markets for recycled carpet
declined along with sales of new carpet.
Murray leads Shaw’s sustainability
Shaw Industries recently ta ped Paul Mu ray, former environmental health and safety and
sustainable busine s practices leader with contract furniture giant Herman Mi ler, to head
up its environmental sustainability efforts. Mu ray, who is Shaw’s vice president of environmental
sustainability and environmental affairs, relocated from Michigan to take on a new
challenge in a car er that spans over 20 years in the sustainability field. FCW executiv editor
GreenStep
on the residential side of the business.
High-end hard surfaces maintain
popularity because the high-end shopper
has returned to the market with
her desire for ceramic tile, stone and
wood intact. Luxury vinyl tile was a
big winner throughout the economic
downturn, and is maintaining momentum. The area rug
market appears to be gaining from the hard surface demand.
The residential market picked up last year, but only about a
point and a half.
The commercial market stayed strong, growing nearly 5
percent over the previous year. Here, the carpet tile business
continues to prosper because it’s an easy product to
work with. Resilient is a solid second with heavy emphasis
on fashion and style.
Builder flooring purchases were down significantly from
what they were in 2007 — the year that market crashed.
Thus far in 2012, housing starts are trending up by double
digits in the first quarter. Existing home sales grew in the first
quarter of 2012. The economy seems to be improving at a
slow but steady rate. Unemployment remains a concern, but
the consuming economy seems to be holding ground.
In all, the 2012 Annual Statistical Report brings good
news. The snapshot shows a challenging year, but better
than the one prior. This year is shaping up to be even better.
Each improvement gains us a little more breathing room.
2.25% CVD imposed
Vol. 61 No. 3 A Hearst Busine s Publication February 6/13, 2012 $4
FLOOR COVERING WEEKLY
The Industry’s Busine s News & Information Resource
SURFACES
POST
Painful cuts last year pave
the way for Beaulieu in 2012
2012
Flexible format brings
new success to show
*For more Surfaces coverage s e pages 10 & 26
according to Ralph Boe, president and CEO.
While Boe characterizes the company as [Las Vegas] While Hanley W od reported Tarkett used this o portunity to launch
The fa l of 2011 was a difficult one for Beaulieu.
Thr e of its senior level executives left he’ sti l oking for a few key executives. 10 percent over 2011, a tend es were torn on strong once again pulled retailers into its
“we l managed going into 2012,” he admits that attendance a this year’s Surfaces was up a new display and selling system and Arm-
the company — James Le slie, COO, and For the time being, operations report to whether 2012 would prove to be be ter than large ba lr om space with a wide range of new
Jeff Meadows, CMO, both left in November, him directly; David Vita oversees sales and last year. But, there did s em to be consensus product and a strong distributor presence.
preceded earlier that year by Patricia Flavin, marketing for a l specified commercial busine
s; and, Steve La d heads hospitality. On of positive things to come.
Beaulieu, the two largest exhibitors, found it
tha the show was a su ce s and a harbinger At the same time, Ma nington and
senior vice president of marketing. While the
company was forced to close down thr e of the residential side, Casey Johnson heads While traffic s emed a bit light at times, rewarding to be on the show fl or. “We have
its plants due to slower than expected sales, direct sales; Kathy Fisher overs es home centers;
Joe Wi liams leads the company’s export on the show fl or but exhibited just outside g od show for us,” said Dan Natkin, director
the inclusion of vendors who chose no to go benefi ted from not scaling back, and it was a
on a more positive note, it was also able to
restructure its $230 mi lion debt.
and distributor busine s; and, Wendy Jaynes in m eting r oms, conference r oms and of Ma nington’s w od and laminate busine
s. Ed Duncan, Ma nington’ senior vice
Today, Beaulieu of America has hit the is now marketing manager for the Bli s brand. ba lr oms created crowds off the main fl or.
ground ru ning, a leaner mor efficient organization
that is ready and determined to uphold another flat year,” Boe said. “Refinancing is back Mohawk, which held its western
“We are going into 2012 prepared for That exhibitor flexibility is what brought president of marketing, a ded, “We
and grow its place in the carpet industry, complete and we have finished our consolida- regional event just outside th exhibit
a ba lr om. Arm
— Kimberly Gavin
Production
Thomas YoungProduction Managertdyoung@hearst.com
Matthew Lippl Production Artistmlippl@hearst.com
Administration
Sherridan Basdeo Advertising Administrator sbasdeo@hearst.com
Carolyn Giroux Audience Development Directorcgiroux@hearst.com
Adriana Marzovilla Financial Manageramarzovilla@hearst.com
George R. Hearst Jr. Chairman
Frank A. Bennack Jr. Vice Chairman
Richard P. Malloch Group Head & President
Steven A. Hobbs Executive VP & Deputy Group Head
Robert D. Wilbanks Group Controller
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*This limited warranty begins on the date of purchase and continues for the life of the carpet. Proration may apply to
lifetime limited warranties. For complete details, see limited warranty brochure available at retail locations or call
1-800-438-7668. © 2012 INVISTA. All Rights Reserved. STAINMASTER® is a registered trademark of INVISTA. C04052