Maxim Group changes identity, adds new e-company

Home Channel News, Feb 7, 2000 by Monica Toriello

Kennesaw, Ga.-based flooring company renamed Flooring America in January

Changes abound at the company once known as the Maxim Group. The Kennesaw, Ga.-based company has a new name, a new chairman and a new business. On Jan. 1, the Maxim name gave way to a new moniker for the chain of floor-covering stores. Flooring America Inc. debuted at the New York Stock Exchange under the symbol FRA, replacing MXG. Last month, 150 of the group's more than 1,000 CarpetMax stores held grand re-opening festivities as they adopted the Flooring America name. The rollout will continue over the coming months until the CarpetMax name is phased out entirely.

The rechristening occurred just days before the company's chairman, Ron McSwain, stepped down. McSwain, owner of 11-unit McSwain Carpets in Cincinnati, resigned as chairman and director to pursue "other business commitments," he said in a statement. McSwain's replacement is David Nichols, former chairman and CEO of Mercantile Stores. Nichols was unavailable to be interviewed at press time.

Nichols will not be involved directly in the third major change in Flooring America since the beginning of the year: the formation of a new company that isn't confined to selling flooring. Flooring America has formed a separate e-tailing company called everythingdecor.com, which will begin selling home decor products over the Internet later this month. The Web stare, located at www.everythingdecor.com, will offer flooring, wallcoverings, window treatments, paint, high-end appliances and electronics, lighting, furniture and art. Everythingdecor.com will also refer customers to participating retailers in their neighborhoods, if they prefer to touch and feel products before making a purchase.

Flooring America execs Tom Leahey and Paul Trau have been named CEO and president, respectively, of everythingdecor.com. Leahey, formerly Flooring America's executive vp-finance, said the new company currently employs about 60 people, including outside consultants.

Trau told NHCN that, as of mid-January, even without the help of an advertising campaign, everythingdecor.com had signed partnerships with four buying and marketing groups representing upward of 4,500 independent specialty dealers whose stores will become part of the everythingdecor network. He declined to identify the groups.

Everythingdecor's business model, Trau said, is one that will benefit traditional retailers in several ways. Retailers who join the everythingdecor network will become part of a revenue sharing plan. Each time a customer makes a purchase online, everythingdecor.com will pay a 5 percent commission to the retailer whose store is located closest to the customer's residence. Merchandise purchased online will be shipped directly from manufacturers.

Another way for retailers to profit from the site is by referring customers to it. Retailers who refer first-time customers to the Web site get a 3 percent commission every time that customer makes a purchase within the network.

"A flooring dealer, for example, who refers a customer to our Web site will profit from that customer's purchases of furniture, lighting and other products, even if that particular dealer doesn't even carry those types of products," Trau explained. Of course, revenue sharing goes both ways: everythingdecor gets a 15 percent commission on all "referred sales." That means if a customer visits the Web site and is referred to a local dealer, everythingdecor will get 15 percent of that customer's gross purchases from the dealer.

The mechanisms for tracking customer referrals and purchases could include redeemable coupons and discounts. Everythingdecor.com plans to offer incentives to encourage repeat purchases through the network, such as frequent flyer miles for dollars spent on the network or credits for future purchases.

Joining the everythingdecor.com network, at least for now, is free. Detailed information about becoming an affiliate is posted on its Web site. Affiliated retailers will display window and door decals to identify themselves as members of the everythingdecor.com network.

The company also plans to cater to what Trau called "the in-home market." Design consultants and installers may go to customers' homes for measurement, inspection or other "high-touch services."

"We're going to be very service intensive," Trau said. "We won't be a company that simply does product delivery." Trau said everythingdecor.com is currently in negotiations with a number of home services companies. Dealers whose stores have design consultants can also provide their services if they so choose.

Trau said the company is likely to look toward the venture capital arena to help fund the new initiative. He emphasized that Flooring America would not provide the financial support for everythingdecor.com.

"It costs a significant amount of money to build a strong brand," Trau said, "and we're determined to do that with Everythingdecor." The site will compete with other home decor sites like HomePoint.com, which has also partnered with brick-and-mortar retailers, and pure-play e-tailers like Living.com and Good-Home.com.