Laminate: Category pushes back against onslaught of LVT

June 17, 2016

June 6/13, 2016; Volume 30, Number 25

By Reginald Tucker

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Much has been made of the rapid rise of luxury vinyl tile (LVT) and the subsequent impact the category has had on competing hard surface flooring segments, namely laminate. Despite LVT’s legitimate advancement, however, many laminate flooring manufacturers and marketers feel there’s no need for alarm.

“While we agree the laminate category is experiencing competition from other categories, we firmly believe laminate is still a very viable flooring option due to characteristics only it can provide the consumer,” said Carr Newton, vice president, resilient and laminate, Shaw Floors. “More specifically, laminate is an excellent product for scratch and fade resistance and offers sustainability benefits.”

Other observers representing manufacturers that play in both the laminate and LVT spaces agree. “Increasingly, consumers are recognizing the benefits of laminate flooring—particularly the scratch resistance and ease of installation,” said Dan Natkin, senior director, residential products, Mannington. “Many consumers also like the environmentally friendly nature of laminate. It’s bio-based and renewable; more than 95% of the content is wood fiber.”

While some industry experts attest to LVT’s encroachment on laminate’s turf—even those executives who represent companies that produce laminate flooring—they say it has not derailed laminate’s forward momentum to the degree that some critics have estimated. “We are continuing to see the impact of vinyl, particularly LVT and now rigid vinyl products taking some of the space that laminate flooring has occupied in the past,” said Roger Farabee, senior vice president of marketing, Mohawk Hard Surfaces, parent of Quick-Step. “But there’s an interesting thing going on: Everyone I’ve talked to in the domestic market saw growth last year, including ourselves. And in many cases it was significant growth.”

Screen Shot 2016-06-17 at 3.13.49 PMLikewise, LVT comes with its own merits. Considered by many as the “rising star” of the resilient show, LVT sales grew by 8.4% in 2014—the most recent period for which official estimates are available—accounting for 27% of resilient flooring’s total volume over the same period. “We are still seeing double-digit growth in LVT,” said John Wu, president and CEO of Novalis Innovative Flooring. “More consumers are realizing what a great product LVT is. Not only is it versatile, but it can be installed anywhere using various methods.”

Other proponents of LVT attest to the product’s allure. “Across all sectors, many designers, consumers and various other end users would never have considered LVT as an option,” said Jonathan Train, president and CEO of EarthWerks (FCNews, April 11/18). “But with so many major flooring companies now offering the product, it has elevated its exposure. People have a better understanding of its values and benefits.”

At the same time, laminate flooring’s performance is nothing to shrug off. While conservative estimates put the category’s growth between 3% and 5% in 2015—for an estimated $1.136 billion in sales and volume shipped at 1.066 billion square feet—some believe those numbers do not accurately reflect what the category actually did last year.

“Internally, we estimate the U.S. laminate flooring market is significantly larger, at around 1.24 billion square feet,” said Derek Welbourn, CEO of Inhaus. “We see the home center/mass merchants as the dominant category in terms of volume; however, they are limited by the selection they carry. High quality and diversity of product mix is still much stronger within the specialty retailer channel.”

It’s this respectable historical performance—as well as its future prospects—that’s driving major manufacturers to invest heavily in the segment, despite the fact that it is considered a “mature” market. Case in point is Swiss Krono (parent company of the American Concepts brand) and its recently announced pledge to invest more than $230 million to support its U.S. operations in the form of a new HDF plant ($215 million) in addition to a new flooring line ($15 million). The expansion will translate into a 30% to 35% increase in its flooring capacity with the number of full-time workers expected to increase from 150 today to approximately 220 full-time employees in two years. Furthermore, this latest pledge comes on top of a $30 million investment the company made several years ago to build a melamine resin paper treatment plant in Barnwell, S.C., which started up in 2014.

“This is essentially going to allow us to move completely upstream in our channels and really control the supply chain in a way that we haven’t been able to before,” said Zeb Portanova, president and CEO of the company’s U.S. operations. “It’s going to make us that much more competitive and pull us closer to our customers in the marketplace.”

Laminate proponents point to this optimism, as well as the category’s staying power, as the primary reasons for the continued support of the segment. “Laminate is an excellent value to the consumer, providing her with unmatched realism and proven durability at an affordable price point,” Shaw’s Newton said. “Laminate will continue [to seize] a share of the flooring market but will also continue being challenged as new products are developed.”

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