by Steve Feldman
I know what you’re thinking. How can FCNews in its right mind peg the laminate market for 2009 at over $1 billion ($1.073 billion to be exact). Truth be told, it could be higher.
How can the industry believe the total laminate market is 20% smaller than actuality? It may begin with the stats services to which everyone seems to subscribe. From what I’ve seen and heard, they peg the market somewhere between $840 million and $950 million. These numbers may come from government numbers, public company annual reports, etc. Often, laminate flooring manufacturers underestimate the market because they believe their share is higher than the reality. But possibly the biggest reason for underestimating is a lack of in-depth knowledge in three major, significant areas: big boxes, price clubs and imports.
With this said, FCNews is confident our $1.073 billion and 932 million-square-foot estimate is the most accurate number out there. Here’s why. One word: methodology. Rather than rely on the same data everyone looks at, we took it to the next level. We spoke to every major laminate flooring producer in the U.S. and discussed 2009 sales. In every case, our contact agreed to share confidential data on the condition it would go no further than that particular conversation. After 16 years in this industry, it is that mutual trust that has resulted in these estimates. Estimates that prove the industry is larger than you may have been led to believe; estimates that reveal the market did not shrink as much as you think.
What you may not know:
- Laminate flooring did shrink considerably at specialty retail. As much as 20%.
- More laminate is sold at price clubs than you would ever imagine. In terms of manufacturer dollars, you’re talking between $130 million and $150 million, or between 10% and 15% of the industry.
- Companies like Clarion and Faus, whose business is almost exclusively private label or OEM, is around $100 million, give or take. Faus manufactures the DuPont brand for Home Depot. Big business. Clarion makes product for Tarkett, Lowe’s and others. (More in 2010).
- We often lose sight of imports. Lumber Liquidators last year did about $545 million. The annual report says laminate accounted for 18% of that, or $98 million at retail. Even if they were making a 100% margin, that’s $50 million. Then there’s Home Legends, which supplies Home Depot to the tune of $30 million to $40 million. And there are companies like BKR bringing in private-label lines for distributors and large retailers.
- While Shaw and Mohawk may have lost some home center business, almost all of it was picked up by Kronotex and Pergo.
- Speaking of Kronotex and Pergo, you’d be amazed how much business they are doing. Combined, they probably represent more than 40% of the laminate sold in this country. Very little of it is specialty retail, which is why many people can’t get a handle on the scope of their businesses.
- Because of channel shifts, the average square-foot price of laminate in 2009 probably dropped a dime to about $1.15.
So there it is. And now, you must excuse me while I run something through my shredder.