BOCA RATON, FLA.—Harris Wood, one of the oldest brands in the hard- wood flooring industry, has undergone a series of reincarnations over the past two decades. The brand has gone from Harris to Harris Tarkett to Tarkett Wood to Arborcraft and now back to Harris Wood with the recent purchase by public company Q.E.P. Co. (QEP.PK). While hardwood may be new to QEP, the company has a stellar reputation with its best-in-class tools and sundries brands. FCNews associate publisher and editorial director Steven Feldman recently sat down with Len Gould, president of QEP, to discuss the past, present and future.
What can you tell me about QEP?
QEP is the world’s largest manufacturer and supplier of flooring installation tools, adhesives and flooring-related products targeted at the professional installer as well as the do-it-yourselfer. It was founded in 1979 by my father, Lewis. It took two-and-a-half years to get out of the family garage and hire one person, but today we have more than 600 employees in 33 locations around the world. Some of our brands have been around since the early 1930s (Roberts). Many flooring installers grew up using our tools. And that’s not strictly a U.S. phenomenon —it’s a global statement.
What are the company’s strengths, competitive advantages?
Our strengths would be threefold: First, obviously, would be our brands, which are best-in-class across the board. They include Roberts carpet, vinyl and wood adhesives and tools; QEP ceramic and stone installation tools; Capitol USA specialty adhesives; and the Brutus professional line of tile, porcelain and stone tools. We are also one of the premier sup- pliers of underlayment for laminate and engineered flooring.
Second would be our service, which is unmatched in our niche. We can ship any combination of up to 1,000 different items from multiple warehouses (over 1 million square feet) to a customer the next day, sometimes the same day. Our fill rates are 99.97%.
When you talk about differentiation, you can talk about standing behind your product and backing up our warranty. We are a large company with a small company feel.
Third is our people. Everyone will tell you their people are their defining advantage. The difference at QEP is it’s true. I’m a big believer that you can teach people how to do anything, but you can’t teach people to care. Our people truly do care, and that passion truly makes a difference — when you are taking care of a customer, when you are picking up an order, even when you are laying a trade show booth.
You purchased Harris Wood in February 2010. What attracted you to the brand, and why when the wood market was tanking?
First, it was an opportunity. And business like life is a series of opportunities. We wanted to raise the importance of QEP in the industry, and it was time to participate. And unlike carpet, which is dominated by a few giants, or ceramic, which is filled with hundreds or thousands of sup- pliers, we felt we could find our way in the wood business.
We found a company with phenomenal people and a fantastic infrastructure. It only lacked one thing: volume. It’s a 112-year-old brand name that is completely vertically integrated. We see a hole in the market right now, and we feel there is an opportunity to do right by our customer base with a made in America, best-in-class offering. There is also the “one-stop shop” concept since we offer tools, adhesives and underlayment as well. Businesses are shrinking. They are looking for “simple.” Adding wood flooring to our portfolio was a natural.
What are the strengths of Harris Wood?
First would be a 112-year-old brand, an American icon, one that obviously has withstood the test of time. Second would be the quality of the finished product, which is based on the people and facilities manufacturing our floors. Our access and utilization of innovation, whether that be in technique, or something as simple as our nano-technology based FinishLoc system, developed in conjunction with a leading global chemical company that enhances performance. We also have some innovative, fashion-forward visuals, which have been introduced since the acquisition. There is also a lot of strength in the Made in the USA aspect of our manufacturing that has tremendous mass appeal.
Talk a little about the Harris product line.
Harris offers a full line of premium, engineered and solid hardwood flooring. The cores for our engineered product are American hardwoods, not MDF or HDF, and our scrapes, stains and finishes are truly unique in an overcrowded marketplace of me-toos. All species are American hardwoods such as oak, maple, hickory, walnut and cherry.
Is there an environmental story?
QEP has a long tradition of treating corporate responsibility seriously. This is not a new topic to us, even if the wood business is. Our factories incorporate only VOC- and formaldehyde-free finishes; we exceed the requirements of the CARB 93120 standards which reduce air pollution caused by chemicals; we reduce gas emissions by sourcing 100% of our domestic species from forests within 500 miles of our plant; we are certified by the International Forest Stewardship Council to utilize FSC-certified wood and we utilize 100% of the tree; even the sawdust is used as fuel and heat for our factory.
They say Harris Wood has me a home center brand. True?
False. The Harris name is not active in any home centers and is a brand exclusively for distribution and independent dealers. I think it’s easier for certain people to use that argument because they see the QEP and Roberts brands at home centers. But those brands represent the best in flooring tools, period. And just like the absolute best in other tool categories, you’re going to find them in widespread distribution and the home centers.
We are, however, manufacturing product for a number of channels, including home centers, which does constitute the majority of our business right now. What we bought was a broken business, and the way you fix a broken business is with volume. It’s easiest to start with a large player.
Surfaces. Are you exhibiting?
Yes. At the end of the day, it’s important to show our distributor base that our commitment is deeper than words. Our booth number is S5723.
Speaking of your distributor base, is the country completely covered right now?
The Harris distribution needs to be rebuilt. We have some very good partners
in certain areas, but we need more. We have CMH, NRF, Southern Wholesale, Master- craft, Swiff-Train, Bolick, Gilford and others. We do have the entire continent covered on the tools and sundries side with some of that segment’s top wholesalers, and it is not beyond the realm for some of those distributors to take on the Harris line.
What kind of margin opportunities are there for distributors and retailers?
This is a work in progress, The margin model we offer is healthy. What makes it attractive for the distributor and ultimately for the retailer is that it is something different. Some of the larger players will be less flexible because they choose not to, and some of the smaller players will be less flexible with their margin models because they can’t afford to. But from a long-term perspective, we feel we have the ability to make it profitable for all involved. That’s the definition of a true partnership.
What are your plans for the brand? Which changes do you plan to enact?
Long term, it’s to re-establish the Harris brand, not so much to make it what it once was, but more importantly to make it what it should be. There have been too many years of neglect for one reason or another in the way the brand was handled. Ultimately, what we have is a diamond that needs polishing. Short term, it’s about finding the right partnerships that work for all parties involved. There has to be conversation beyond only price. Each marketplace is unique and will bring its own challenges and opportunities.
Any forecasts for 2011?
My personal view is that at some point the economy will heal, and when that happens the tremendous inventory of homes and commercial real estate on the market right now will begin to move. At that point, it’s only natural to assume that amongst the many products that will be needed, flooring will be right there at the top. So I am very bullish long term. For 2011, I would see good companies expanding market share in a non-expanding market.
If I gave you 30 seconds in a room with every flooring retailer, what would you tell them?
Give us a chance. There are a lot of people who are unhappy for one reason or
another with their current suppliers. It may be they sell everybody, they may sell around distribution and go direct, and it may be a lack of loyalty. There is a reason we enjoy the spectacular reputation we do on the tools and sundries side. And even though hardwood flooring may be a new business for us, we have been a long-time member of the flooring industry.
We can make a difference in your business.