MARCO ISLAND, FLA.—Though the commercial market continues to plod through the recession as its residential counterpart starts the recovery process, optimism was in the air at the annual meeting of the Starnet Worldwide Commercial Flooring Partnership.
While most admit a light will not come, unfortunately, until 2011/2012, they feel as if the segment has pretty much bottomed out and this year may even be better than 2009.
Under the theme, “The Power of Partnership,” all but six of Starnet’s 172 members were in attendance, and this feeling of hope resonated throughout the membership as well as a packed room of vendor partners who confirmed projects that had been put on hold are starting to free up.
The basic sentiment was, “If we can hold on over the summer, the fall is starting to look decent. And, if we can get through this year, things are looking up in the long run.”
David Meberg of Consolidated Carpet in New York/New Jersey, admitted to “being more optimistic than I was six months ago. The volume of activity is starting to pick up, though the projects are not as big as they were a few years ago.”
Jim Creamer and Gerry Swift of Potomac Floor Covering in Dulles, Va., noted, “We’re seeing a surge of activity; projects that were on hold are coming forward. Unfortunately, margins continue to get squeezed. We’re seeing historic lows.”
Another negative they, like many, pointed out: “We’re seeing a lot more jobs requiring bonding. In fact, we’ve seen more of this in the last 12 months that we have the previous 24 years.”
The main culprit for both low margins and being forced to post bonds has to do with the amount of companies jumping into the commercial sector when their residential business tanked.
While this has eased to some extent as the residential market rebounds, members continued to note they are bidding against eight to 10 companies whereas in the past it would have been three or four.
Though business continues to be tough, Randy Weis of RD Weis Cos. and Starnet’s chairman, said as a whole, the group has outperformed the rest of the industry during this down time and that the membership has taken market share.
As for his own business, “We exceeded expectations in the first quarter and the second quarter is looking promising.” A main reason for this, he noted, has to do with the company expanding its services to help offset the product erosion.
Already big in maintenance, “which is not volatile like other parts of the business,” the company has begun to offer specialized niche services, such as viral sanitation. “New clients are hard to obtain in this economic environment so you need to find ways to provide more value to your existing customers.”
Concerning the group’s overall success Weis attributes some of it to the partnership Starnet’s members and its vendors have formed over the years. It goes beyond the day-to-day business, Weis explained, referring to the convention’s trade show being moved to the morning as opposed to late in the day in order to help create more traffic and energy. “We do everything possible to stage our vendors in the best possible light. And most felt like this concept was a home run.”
Indeed, exhibitors conveyed their support for the new format, saying the traffic and energy were the best they had seen. Gilles de Beaumont and his team at Tarkett/Azrock had nothing but praise saying, “We saw more people in the first hour than we saw all last year—it’s been phenomenal.”
Mannington’s Tom Davis concurred, saying staging the tradeshow right after breakfast “was a fantastic move.”
As for business, the company’s Alex Jauregui, noted, “Most expect this year to be flat, though many see education as doing better.” The one thing he noted was, like the residential recession that preceded it, business conditions vary by region. “California and Florida are very tough, but some places in the heartland are doing better. Also, other areas were so low, things can only go up.”
At the Mohawk exhibit, which was showcasing the mill’s partnership with Starnet through an exclusive collection of broadloom and carpet tile, Al Kabus, president of The Mohawk Group, said the commercial division worked with Starnet to come up with the Bigelow branded products.
While the collection is “pretty universal” he noted, having a binder that has both the Starnet and Mohawk names on it “allows them a way to differentiate themselves. Everyone is looking for ways to have what the other guy has. With this, that won’t happen.”
Anthony Minite, president of Bentley Prince Street, which unveiled a number of carpet products and accessories to the members, including a patent-pending, walk-on protector developed with Velcro, and the first solution dyed Wilton, said the reason for doing this at Starnet is, “these are the best in the business. They not only provide, good, honest feedback, when it comes to products like the Wilton that require installation expertise, there is no better company than a Starnet member.”
In the end, Jeanne Matson, Starnet’s CEO, felt both the members and suppliers “are in good shape.” Like Weis, she noted, “Starnet is tracking better than the industry base and as long as we continue to emphasize professionalism and quality, I think we’ll be in great shape when the market really turns for the better.”