Distribution: Carpet

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Distributors see action in soft surface segment

By Ken Ryan

Oct. 21/28 2013; Volume 27/number 13

CMH Space Flooring, a top flooring distributor, is growing by double digits—primarily on the strength of its hard surfaces business. However, that didn’t prevent the Wadesboro, N.C., wholesaler from expanding into carpet when it had the opportunity.

“The carpet business was new to us in 2012, and each month it gets stronger,” said Hoy Lanning, president and CEO. “Carpet is still 50% of the flooring business; we feel we have a wonderful opportunity to add carpet to our shipments. This way our dealers can get all of their flooring products from one source.”

CMH entered the carpet distribution business after it took over Bayard Sales’ previous territory for Congoleum. “Most of the customers there were buying carpet from Bayard and we saw it as an opportunity for us,” Lanning noted.

Former Bayard executives Don Wohlfarth Sr. and Don Wohlfarth Jr. joined CMH following the acquisition and have helped CMH develop what Lanning calls “a first-class carpet line of the best of the best.”

Seizing an opportunity

Some distributors who are supporters on the hard surface side have no presence in carpet, while others are considering it. Still more see carpet as a natural extension of their business, a chance to offer its dealers a one-stop shop by bundling products and services.

For those distributors who have entered or re-entered the sector, carpet in most instances makes up a small percentage of their business. However, it is a segment that some see as ripe with potential.

Galleher, a hardwood powerhouse in Southern California, added carpet in 2013. While the category represents only 1% of the company’s overall business, it is nevertheless flourishing. “Carpet is half the market, and with the innovations in polyester it has become possible for distributors like us to come in and make it profitable,” said Jeff Hamar, president and CEO.

After the company began selling carpet in June 2013, Galleher generated around $400,000 in September, and the numbers are forecasted to increase exponentially. “We expect to do $10 million in carpet next year,” Hamar noted.

Many flooring distributors are strategic partners to mills such as Mohawk and Shaw, and this relationship helps broaden the reach of manufacturers to put carpet into the hands of more retail customers. “The big carpet guys sell across the U.S., making [retailers] stock and sell colors and styles that are not popular in all regions,” said Jeff Garber, vice president, sales and marketing, Ohio Valley Flooring. “A distributor can tailor a line just to fit its local market.” His company’s carpet business is up more than 20% and represents 20% of its business overall.

“There are no dogs, only winners, in our displays,” he added. “We can also customize our displays to be smaller but full of the right products. Because the mills don’t make all products in the wood and LVT business, they buy from some of the same foreign mills that we do. So, add in the cheaper, local freight, and we can be very competitive.”

In terms of size, Lanning likens the distribution of carpet to that of sheet vinyl. “We have handled a great deal of sheet vinyl for over 22 years, so we’re used to rolls and storage of products that size,” he said. “Our truck delivers products to dealers for a delivery fee. Our customers can combine our carpet with many other products to add value to our delivery charge for that same day.”

J.J. Haines, which serves an area from Pennsylvania to Florida with seven warehouses and headquarters in Glen Burnie, Md., has been involved with carpet for many years through private-label programs and relationships with major carpet suppliers. Starting January 2013, J.J. Haines’ private-label carpet programs were organized under the Chesapeake Carpet Collection, offering new displays and products including polyester, nylon and a few polypropylene styles.

NRF Distributors, which serves upstate New York, parts of Pennsylvania and all of New England, has been in the carpet industry for years. Terry Pomerleau Gray, senior vice president of marketing, estimated carpet and related products make up nearly a quarter of NRF’s overall business.

“Our customers trust us so well that 165 of them have given us keys to their stores, so when the driver comes early, he can unlock the store, put the order inside, leave the bill and lock up when he’s done,” Gray noted. NRF brings in an average of 12 carpet trucks a week and, as such, can offer dealers first-rate service.

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