Carpet: Beaulieu back on track under new leadership

September 21, 2015

September 14/21; Volume 30/Number 7

Goal-oriented company on growth trajectory throughout North America

By Steven Feldman

Dalton—It wasn’t too long ago that Beaulieu owned the distinction of being the industry’s first and only privately held $1 billion carpet mill. But while recession and strategic restructuring may have knocked the company off that perch, it is not only still a viable mill but primed to start growing the business once again.

Under the leadership of Karel Vercruyssen, president and CEO, who took over for Ralph Boe after the latter’s 13-year run; and former Armstrong executive Kevin Biedermann, executive vice president of sales, Beaulieu has a message for floor covering retailers. “We are in it to win it in the retail business in a very meaningful way,” Biedermann recently told FCNews in an exclusive interview. “We are not closing down, and we are not selling. We are here to grow. We have products that will roll out this fall, and we have a variety of things in development.”

As such, Biedermann said retailers will see one of the company’s largest lineup of introductions at Surfaces. “It’s all about style and design. We have done extraordinarily well with the independent retail channel, and that’s where we are putting much of our focus. We want to grow with them in a significant way.”

Beaulieu has always prided itself as an alternative to the two carpet mill behemoths, and that remains a constant. “We can do things differently from Shaw and Mohawk that have a place in the market,” said Vercruyssen, largely credited for the turnaround of Beaulieu Canada.

“As consolidation continues, we don’t have ambition to be the largest flooring company,” Biedermann noted. “The ambition is to bring value to the retailer and provide another option.”

Among other things, Beaulieu is in the process of repositioning its sales and marketing. “We brought on Kevin to build a top-class sales force,” Vercruyssen said. “On the marketing side there are many things in the works. We are rebranding the organization somewhat. This fall, retailers will start to see what we have been working on behind the scenes and put us in the position where we want to be.” This includes new products, new merchandising systems and new retail programs that will be rolled out in 2016.

One thing that will soon become apparent is a transition from carpet mill to flooring company, which was one of Vercruyssen’s key strategic decisions at Beaulieu Canada. In fact, he noted that Beaulieu Canada today is 50% larger than its low point in 2007.

“If you look at the product assortment Beaulieu Canada offers, you will see what we want to accomplish,” he said. “Beaulieu Canada diversified into wood, laminate, LVT, COREtec and sheet vinyl—everything except ceramic. We have become more important to our dealers in Canada, and that is what we are going to do in the U.S. In Canada we have a strong aligned program called Your HomeStyle, where the biggest and best dealers aligned with us can have all products. Our sales and marketing team is working diligently on how it can become a North American program.”

Biedermann added this is only progression and not a reinvention of Beaulieu. “This is a great company with great capabilities. I am learning this company isn’t toe-dipped in carpet. We make all types of yarns in a meaningful way. That lineage and heritage is huge.”

In illustration, the company remains strong across all constructions, from nylon to PET to polypropylene. “We are too large as a carpet company to be specialized in one segment,” Vercruyssen said. “We have nylon assets all the way to convert caprolactam into nylon chips. We also…gave a strong push to filament polyester and position it in a big way. We are also strong in polypropylene.”

The one area that Beaulieu has abandoned is the nylon builder business. “Low-end nylon is not a segment where we have a lot of ambitions.”


Financially sound

Beaulieu remains a 100% family-owned business run by a professional board appointed by the family. “There is simply more structure in place than traditional family businesses would have,” Vercruyssen said.

While persistent rumors paint a company in financial hardship, Vercruyssen was quick to dismiss them. “The company is stable. The rumors out there are unfounded. Because Beaulieu is a privately held company we don’t disclose financials, so people speculate because they don’t know any better.”

Biedermann added that the company is not highly leveraged. “Growing a business takes enormous amounts of capital. We are a family business. When 100% of your equity is family equity, and you are not highly leveraged, you can’t always grow as fast as you would like. But companies that are more leveraged will have a tougher time. We know what we are today. The idea is to explore what we could be.”

Where does Beaulieu see its strengths? Vercruyssen and Biedermann outlined a few key points:

  1. North American reach, touching all retailers in Canada and the U.S. with regional distribution centers.
  2. Strong brands like Magic Fresh, Bliss and Everstrand.
  3. Family business.
  4. Technical expertise around carpet and a good understanding of retail, style, design and the consumer.

At the end of the day, Biedermann said the goal for Beaulieu is simple: to be a responsible company that is relevant with its retail customers. “Relevant means offering a broad assortment of hard and soft surfaces—products [retailers] want, that they can get behind and sell, be confident in and make money with. Products that have differentiated features and benefits. We won’t be the cheapest out there, but we will be the best value for the consumer.”

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