By Ken Ryan
Luxury vinyl tile (LVT) continues to be the runaway success story of the flooring industry. LVT is such a big hit, in fact, some distributors consider it a category unto its own rather than a leading segment of resilient.
Indeed, as the flooring industry slowly recovers from the deepest trough many veterans can ever recall, distributors continue to add a greater percentage of LVT to their resilient mix. For example, resilient now makes up 65% of Cain & Bultman’s business, up from 60% two years ago. The Jacksonville, Fla.-based distributor has realized healthy double-digit gains thanks to LVT and sheet vinyl products like Armstrong’s StrataMax.
Others have followed suit. “We significantly adjusted [LVT] to our merchandising,” said Bob Link, president, Herregan Distributors, Eagan, Minn. “This year we added a new four-sided bevel, scraped visual from Brandywine called Durham Plank to our Hill Country Innovations LVT line. There is also a new scraped and heavy textured click product from Lodgi International called Tahoe. “We want our dealers to have the LVT solution no matter the job requirement. We have the No. 1 selling LVT in the market in Manning-ton Adura. LVT is a major category of resilient for us.”
Growth prospects
Several distributors said while sheet vinyl sales have leveled off in some areas, LVT’s growth has continued unabated due to the slowness in the commercial sector—especially new commercial projects. There is more upside to LVT with the advances in technology, performance and print fidelity that have produced realistic looking products that provide excellent life-cycle value for consumers. Moreover, LVT’s ease of installation and format choice (loose lay or click) are market differentiators as well.
“Property management continues to show upside for the resilient category, and while the larger commercial jobs are somewhat cyclical, particularly regionally, there remains commercial resilient business to be had,” said Scott Rozmus, president, FlorStar Sales, Romeoville, Ill. “Furthermore, many resilient products offer tremendous value to residential remodelers. Obviously, any positive news on the new, single-family home front would be an additional boost. I believe there are continuing opportunities for both LVT and sheet. Certainly, customers are going to demand the best looks and value; as long as we can provide that, the market share is out there.”
Link said Herregan has experienced double-digit increases in both residential and commercial LVT over the last two years. “We feel with the improvements in style and installation techniques there will be continued growth in the category.”
Bruce Zwicker, CEO, J.J. Haines, Glen Burnie, Md., the industry’s largest distributor, noted LVT takes share from laminate, vinyl sheet and “somewhat from tile.”
Likewise, CMH Space Flooring’s resilient business is up 10% this year, driven by LVT and fiberglass sheet. According to Hoy Lanning, CEO, the double-digit increase was realized even before the company added a new sales area in the Northeast that was previously covered by Bayard Sales. In May, CMH acquired Bayard, which served territories in Delaware, Pennsylvania, New Jersey, Virginia, New York City and Washington, D.C.
While the LVT market has flourished, and distributors expect further growth throughout 2013, they are concerned that with so many manufacturers getting into the business, prices will be forced downward, which will eventually stunt profit growth.
“There is no doubt that margins will come down as more people enter the marketplace,” Link said, echoing the sentiment of others.
But for the foreseeable future at least, Link said distributors would continue to ride the gravy train that is LVT. “Our residential and commercial LVT sales continue to grow at a record pace,” he noted.
John Anderson, vice president of sales and marketing at BPI, Memphis, Tenn., sees the ride for LVT lasting another two years or so. “At some point the market will get saturated to where no one can make money selling [LVT], but first I see another couple years of growth.”