Distribution: LVT/WPC on parallel paths to growth

October 31, 2016

October 24/31, 2016: Volume 31, Number 10
By Ken Ryan

screen-shot-2016-10-31-at-3-31-41-pmIf luxury vinyl tile (LVT) was a baseball player it would be Mike Trout, a five-tool performer who can hit for average and power, run the bases, throw and field. In flooring, LVT is that five-component product that can be installed in any number of environments and numbers of ways—glued down, full spread, click, loose lay, and now has WPC as its sidekick.

In a frustratingly slow growth market, LVT/WPC provides distributors with that must-have product that can excite the customer base. “The growth curve of this category is like nothing the industry has ever seen,” said Jeff Striegel, president of Elias Wilf, Owings Mills, Md. “Most new products have a primary usage in a given channel. Laminate zoomed in the retail channel but it never cracked the builder market or commercial sector in a meaningful way because of noise-abatement issues. It went from 0 to $1 billion quick, but laminate was a one-trick pony.”

LVT/WPC is here to stay, experts say. Distributors believe the two products are poised to travel parallel growth paths rather than one product cannibalizing the other. “I don’t know that one is Betamax and the other is VHS,” said Scott Rozmus, president of FlorStar Sales, referring to a videotape format war that blazed during the late 1970s and 1980s. “I don’t know if one wins and the other loses; I think both have legs. WPC is a very hot product, going well in all markets, and LVT is still red hot as well. There is an acceptance that a WPC core LVT is a different category than a dryback traditional core LVT. We see dealers merchandising them separately.”

Where WPC is likely to take share is from laminate and other vinyl products. To keep up with this robust growth, distributors are increasing their overall mix. FlorStar, for example, was 6% LVT/WPC in 2014; it is already into double digits now and growing.

What separates LVT from, say, laminate is channel diversity—multifamily, contract, residential; it’s hitting on all cylinders in every category and it is waterproof.

Pat Theis, vice president of sales and marketing at Herregan, said the paths to success for WPC and LVT are similar but both have inherent traits that can make one more appealing or a better solution than the other.

Where they are similar: Theis said both are waterproof and can go into myriad rooms and applications. Both can reduce subfloor prep.

Where WPC leads LVT: Quality WPC is thicker and therefore has a higher perceived value. Because it’s thicker, a quality WPC can hide subfloor imperfections better than LVT, which means less subfloor prep.

What’s more, WPC is more rigid than LVT, but still has some flex that can make installation easier.

Where LVT leads WPC: LVT comes glue-down, “and there are still a lot of applications where a glue-down is the best or only solution,” Theis explained. “Plank or tile replacement is much easier with a glue-down.”

Herregan has been particularly bullish in LVT/WPC, with more than one-third of its business devoted to the category. While other top 20 distributors are perhaps not as high, they are all in double digits percentage-wise in terms of product mix, with that number expected to rise in 2017.

Some distributors now separate LVT from the rest of the resilient category, such as sheet goods, VCT and rubber.

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