Laminate: Hope for lagging sector

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By Ken Ryan

The laminate category has been on a steady decline since 2007, hurt by eroding prices that have stifled profit potential at the low end and the popularity of luxury vinyl tile (LVT) products. While there remains a vibrant market for higher-end laminate, especially 12mil offerings, the middle and bottom have eroded significantly, distributors say.

Bob Eady, senior vice president of sales and marketing, T&L Distributing, Houston, said in the Southwestern U.S., laminate will continue to lose share to LVT in 2013. “Keep in mind our market is 85% slab construction, and that greatly affects the products sold and installed by the dealers. Retailers believe they must compete with the big box stores and Lumber Liquidators on a more frequent basis and, thus, ignore the category to some extent. In my opinion, if dealers sell the better laminates and do not try to compete at the low end, they can do very well in laminate.

“Also, there is still a stigmatism toward the sound of laminate, regardless of the underlayment. LVT can be cleaned more traditionally with water without damage and I think the visuals and textures being created in LVT are great.”

Cain & Bultman, Jacksonville, Fla., competes in higher-end laminate but has thrown in the towel on lower-end goods. “You can’t make any money at 79 cents, 89 cents,” said Buddy Faircloth, president. “We can’t compete with someone importing [laminate] from China. We’re focused on a better, best strategy; we’ve traded up in the category.”


Better, best

Indeed, the evolution of these 12mil products gives flooring dealers a “better, best” marketing strategy that allows them to demonstrate sound absorption qualities and solid feel underfoot that exceeds other laminate floors. “[As a result of 12mil] the pendulum has swung back to the independent flooring dealers as opposed to the home centers when we were talking about 8mil products,” said Jeff Striegel, president, Elias Wilf Corp., Owings Mills, Md. “It gives dealers something to sell.”

Striegel noted that the key for distributors in laminate is to align themselves with the top lines. “We happen to have two of the top five in Mannington and Quick•Step,” he said. “Those companies continue to be innovative in product and style—they are highly desirable from a retailer’s perspective.”

Aggressive marketing, promotions and cutting-edge products have allowed some retailers to grow their laminate business in 2012 after almost no positive movement in 2011 and a decline in 2010.

Value proposition

In the value-oriented market that exists today, laminate flooring remains one of the best buys out there, according to Jeff Garber, vice president of sales and marketing, Ohio Valley Flooring, Cincinnati. “In a value market these products have been given more attention. Of course, you need great styling and great pricing to compete.”

The term “value” is also going through a market transformation, Garber noted, as flooring consumers want more than just inexpensive goods. “Customers don’t want low end, they want value. We have worked with our quality suppliers to increase their marketing programs to emphasize the features and benefits that define high quality as value. Our retail customers must understand the message and be able to sell these benefits to the consumer. Our retail customers are better sellers today than they were a few years ago.”

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