Flooring - market information - Brief Article - Industry Overview - Statistical Data Included

Home Channel News, May 21, 2001

Depending on who one talks to, Home Depot is either the first or the second largest flooring retailer in the United States. So its competitors may have been breaking out the aspirin last July when the Atlanta-based dealer opened a stand-alone, 45,000-square foot outlet called The Floor Store that offers 15,000 skus of carpeting and various other flooring surfaces, as well as installation.

Their headaches may have been premature, though, because Depot's management seems less interested in rolling out this concept than in seeing how it works in a market like Dallas-Fort Worth, where the chain has 33 warehouse home centers and three Expo Design Centers.

Flooring dealers and suppliers have come to expect a certain amount of sustained volatility within their sector, which early last year saw financier Warren Buffett acquire an 83-percent stake in Shaw Industries, the country's largest carpet manufacturer. Mohawk Industries, the second-largest carpet mill in the United States named Congoleum as its new national distributor for vinyl products in September.

Armstrong World Industries, the industry's leading supplier of vinyl flooring, was pushed into Chapter 11 in December when asbestos litigation forced its parent company, Armstrong Holdings, to file for bankruptcy protection. (Triangle Pacific, an Armstrong subsidiary that includes its hardwood flooring division, was excluded from the bankruptcy filing). Armstrong's reorganization plan has had no visible effect on any of its flooring business units, judging from the Lancaster, Pa.-based company's sprawling booth at Surfaces 2001, the flooring industry's largest trade show held in January.

"Our business did not drop off in any significant way," flooring products president and CEO Marc Olivie told NHCN. In fact, the bankruptcy plan freed up cash for the company to reinvest in new product development and manufacturing, he said. (Olivie left Armstrong on April 30, 2001 to head the global plumbing division at American Standard.)

New trends emerge

Laminates reigned last year at Surfaces, with many manufacturers jumping onto the bandwagon built by Pergo. Glueless floor systems emerged as the hottest product as DIYers embraced the simpler method of installing a new floor. Several new product releases gave consumers the choice between laminate boards that click, snap, or slide together. Meanwhile, flooring manufacturers pushed each other around in court with patent-infringement lawsuits over the interlocking mechanisms.

At Covering 2000, the premier flooring trade show for tile and stone exhibitors, very large tiles (16 by 16-inch, and even some in the 22-inch range) and very small mosaic tiles were everywhere. Dal-Tile, the largest supplier of ceramic tile in the United States, experienced a record year with $952.2 million in sales, a 12 percent hike over its 1999 sales. Its net income grew 36.6 percent. Dal-Tile attributed its success to an increase in residential sales of its new products.

Last year ended somewhat surprisingly for the beleagnered Flooring America, which undewent several corporate management changes and slumped into Chapter 11 before international franchiser Carpet Co-op of America (now called CCA Global Partners) came to the rescue, acquiring Flooring America's operations $13.25 million.

Flooring: 5.61%

% of total Top 500 sales

Top 500 sales: $6.72 billion