Executive forecast: Wood manufacturers see light at end of tunnel

Home Inside FCNews Executive forecast: Wood manufacturers see light at end of tunnel

By Melissa McGuire

Volume 27/number 15; December 3/10, 2012

Within the wood segment, executives are hopeful but guarded as they head into 2013, as they see a faint glimmer of light at the end of the tunnel.

A slight uptick in building and purchasing coupled with investments in new product and initiatives have executives not fooling themselves with the thought of robust growth, but rather seem content with a mild, if not sluggish, recovery.

Luc Robitaille

Vice president of marketing, Boa-Franc/Mirage

Growth will come mainly from two sectors. Commercial should still be strong with projects that were put on hold coming back to the forefront. The second will be the resurgence in the builder sector where we have already seen an uptick.

We expect the public’s growing preference for local products and domestic species, which make North American manufacturers like ourselves more attractive. We see this trend gaining traction and growing in the next few years.

Opportunities can be found with the builder market picking up coupled with consumer preferences still leaning toward hard surface, especially wood.

The biggest challenge for wood continues to be maintaining market share in the overall industry as people have moved from wood to less expensive alternatives.

Another challenge
we will face is the poten
tial rising costs in raw materials. We will eventually have to contend with
this. The economy will
remain an uncertainty even though we seem to be on more stable ground recently.

We think the economy should head in the right direction but at a very slow pace. There will be no huge increases, rather a steady and moderate pace. Consumer sentiment also needs to rise to a higher level.

In addition, we see the market continue to polarize itself even more into two segments—high- and low-end—with the middle fading away.

For Mirage, we are coming out with some very exciting things in 2013; many introductions are to be expected with a complete new collection called Imagine. It will be a textured line-up of products that perfectly suits today’s tastes.

We are also introducing an array of trendy stains that are in-line with the most recent fashion colors. And, we are expanding our very successful White Oak and Hickory line for even more choices and colors. 2013 will simply be a great year for Mirage and our sales network.

Bill Schollmeyer

CEO, Johnson Hardwood

We’re forecasting a very respectable increase in units and dollars. If the price increases by the large mills hold, the industry will see close to a 6% increase in dollars regardless of volume growth. But the real question is volume, and I estimate low single digit increases.

Johnson Hardwood has been aggressively growing in the key markets with which we’re focusing, and the growth is primarily driven by new products. We’ve been able to turn over much of our product line during the last 12 months so the styles, colors and species continue to be attractive and of value to our customers. And most importantly, we have an incredibly dedicated team at Johnson that is instrumental to our growth.

Our biggest single challenge will still be the sluggish recovery of the economy, and that directly affects new construction, remodeling and the overall consumer confidence needed to make a big ticket purchase, like hardwood flooring.

Product differentiation while maintaining affordability is the main opportunity in wood. It’s easy to design attractive floors, but maintaining affordability is not as easy. The manufacturer that can develop innovative/attractive products, price them within reason and merchandise them effectively will see positive growth.

We are capitalizing on the trend toward wider and longer boards, multi-width packaging, and both brown and white-washed looks.

A return to and growth in exotics are also likely as dealers and consumers are educated. Many want a “true” exotic product, not just a domestic species that is labeled as an exotic.

Our initiatives for 2013 include focusing on our direct markets as well as our key distributors. We plan to aggressively grow our private label, sourced business for distributors and key retailers.

Jamie Clingan

Senior vice president of sales and marketing, Q.E.P.

We see considerable growth for Harris Wood in 2013 as we continue to expand our distribution footprint into regions that were not previously supported. Our expectation is to see the sales growth for Harris Wood out pace that of the industry. The potential stability in the economy will allow our current distributors to invest more aggressively in the merchandising of Harris flooring which is crucial to the growth of our business.

Over the past couple of years, we have worked to streamline our offering and increase the value we provide for our customers. We look to continue moving our offering toward the needs of our customers and then create marketing programs around those changes. In particular, we look to increase opportunities and programs for our distributors that aid in movement of the Harris flooring lines.

We will continue to expand our wood flooring
category with aligned products that are beneficial to our customers and can be serviced by Harris distributors. The launching of Harris Cork in 2012 is an example of providing our customers with additional products that fit well with our Harris Engineered flooring lineup.

We plan to continue our awareness of customers’ needs and demands. Ups and downs in the economy affect our company as much as a retailer. We will stick to our American roots and beliefs—it has worked since 1898 so we must be doing something right.

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