Volume 27/Number 24; March 31/April 7, 2014
By Ken Ryan
Investing in a down market. Stepping up advertising while others pull back. Buying out weaker competitors. These were some of the business practices successful flooring dealers employed during and after the down years.
Now that the economy has improved, many of these retailers are reaping the benefits—producing double-digit yearly sales increases and positioning their businesses for further growth. To find out more about these methods of success, FCNews spoke with some of the industry’s fastest-growing retailers about their experiences.
Quality Carpet & Flooring, Akron, Ohio
Bob Gaither, president and owner
Gaither doesn’t take credit for being a successful retailer, even though the numbers prove otherwise. “I haven’t thought of anything that hasn’t been thought of already,” said Gaither, whose Quality Carpet & Flooring grew 12% last year and just concluded its best March ever. “I guess I do a lot of little things better, and the overall cumulative effect is we are doing well.”
Gaither does all the necessary blocking and tackling successful retailers must do. He hires good people who provide excellent customer service and watches his costs. He does not discount on products and sells either high-end carpet and flooring or low-end selections such as rolls
and remnants for apartment dwellers.
Two years ago, Gaither joined Angie’s List, a U.S.-based website containing crowd-sourced reviews of local businesses. Many consumers go to the site to find highly rated service companies. Befitting for Quality Carpet & Flooring’s reputation in the Akron area, Gaither said he gets at least one job a week generated through referrals on Angie’s List.
Gaither also noted that his business has grown and prospered because he is a member of the FCA Network. “In order to sell right you have to buy right, and the negotiating power FCA has to get the right products, the private-label agreements, etc., has helped tremendously. Plus, they’ve helped me with merchandising and product samples.”
3 Kings Carpets Plus, Fort Wayne, Ind.
Jeremy Winges, co-owner
Winges, a third-generation owner, took over the business that his grandparents founded in January 2005. “It didn’t take long for us to see that we had to make changes as the recession started,” he said.
One adjustment was diversifying offerings in non-flooring areas such as granite/quartz countertops and Dyson vacuums. 3 Kings Carpets Plus also started a carpet cleaning division and offered bathroom and kitchen remodels. And, even when things were tight, the retailer increased advertising and networked as much as possible.
“Networking has been probably the best thing we have done to grow our business,” Winges said. “Todd [Jeremy’s uncle and partner] and I get out and meet people and shake a lot of hands.”
In the last two years, 3 Kings sought new business from realtors; it hired its first outside salesman who calls strictly on builders. “We don’t sit back and wait for the business; we are going out and getting it,” Winges said. “From 2012 to 2013 our volume increased 20%; from 2013 to 2014 we increased another 27%.”
Picketfence Design Flooring, America, San Diego
Dan Taylor, owner
Taylor has lived and worked in the trend-leading Southern California market long enough to know there are runs and then there are corrections. He sensed a significant downturn was coming and took the necessary steps to position his business.
“If you just study history, you knew that new homes were running on fumes, that 18-24 months had passed where we should have been in a correction,” he said.
Before the economic tsunami hit, Taylor diversified his product and market portfolio so that no one particular area would be adversely affected. “Our diversified strategy really paid dividends and we came out stronger on the other end,” he said. “The recession was good for us. It was gnarly and scary to go through, but it made us better.”
Picketfence gained significant market share during the recession and beyond. It opened a second location in Carlsbad three years ago and has seen business grow 220% in the last four years, including 47% last year.
“We were able to get a lot of great people during the downturn and were able to walk into a lot of open doors for business,” Taylor noted. “We got a much bigger piece of the pie.”
Carpetland USA, Davenport, Iowa
Eric Langan, president and owner
Dealers can have great products and programs, but Langan said without great people representing your business, success is not guaranteed. “Our people are our greatest asset and No. 1 point of differentiation against the competition. When you have an excellent staff and provide them with the resources to succeed, you are positioning yourself for growth.”
Since 2010, Carpetland USA’s business has grown 25%, including double digits in 2011-12 and 2012-13. The chain opened its ninth location in Waterloo, Iowa, last year.
During its 42 years in business, Langan said Carpetland USA has gained considerable brand recognition in its markets. And yet, it continues to reinforce that image through consistent advertising and marketing. “The advertising leads customers into our stores where they are greeted with fashionable, consumer-friendly showroom floors to browse. We feel that our showroom floors also set us apart from our competition.”
Langan said his management team produces two different budgets each year. “A budget that they ‘will do’ and another that they strive to do,” he noted. “We’re budgeting for moderate growth of 4% to 6% for 2014. We have an aggressive goal of 11% to hit another benchmark within our company. We have had a slower start to the year due to the winter, but we anticipate business picking up substantially this spring.”
Carpeteria, Santa Clarita, Calif.
Barry White, owner
By any measure, 2013 was a great year for Carpeteria. The company increased sales by $1.2 million—25%—and added a second location in Valencia, Calif. “The market is pretty hot out here,” White said.
White makes it a point to be known in his community. “I get involved with the Chamber of Commerce; I go to every event, every golf tournament. I give away a lot of stuff, but it comes back tenfold.”
He served as master of ceremonies at some 30 civic-oriented events during the course of the year, in which he uses them as opportunities to talk about Carpeteria and give away products like area rugs.
“It’s a good way to get your name out there,” White said. “Maybe the next time these people are looking for flooring they will think of you. I would encourage all flooring dealers to get involved with their chambers [of commerce].”
Carpet One Floor & Home, Ames, Iowa
Todd Bierl, co-owner
Now with four locations in Iowa (the most recent being Spirit Lake), Bierl’s Carpet One Floor & Home has enjoyed retail sales growth of 55% since 2009. In both 2012 and 2013 the business increased more than 20% over the previous year.
Bierl said being a member of the Carpet One co-op has helped the company become a better retailer. “They bring a lot to the table: training, marketing and industry expertise. Things are changing so fast these days with all the new technology; it really helps having someone to turn to. Whenever a situation comes up where we’re not exactly sure what to do, we ask, ‘What does Carpet One recommend?’ and that usually solves it.”
Hiring marketing manager Mike Melone was also a key move for Carpet One Floor & Home. “He helped us streamline our advertising across our four markets and helped us get a lot more bang for our buck,” Bierl said. “The timing on this was very good because [Melone] has helped us stay ahead of the curve on new advertising options like social media, mobile, etc. Plus, having him on board freed up some of my time and allowed [co-owner] Randy [Bierl] and I, as owners, to step back and focus more on growing the business.”
Flooring America, Decatur, Ill.
Roger Pope, president and owner
Since 2005, thousands of specialty flooring retailers went out of business, sunk by the Great Recession. During that time, Pope opened five stores, in some cases taking over struggling enterprises. “The downturn made me a better retailer,” he said. “It forced me to look at every avenue. There are great opportunities in a down economy. You can buy real estate cheaper and building materials cheaper.”
In 2013, Pope’s business increased 20%. And growing through acquisition is just one factor in the retailer’s success. Pope said he embraced Flooring America’s Visions merchandising concept, designed to ease the shopping experience. By his estimate, the Visions makeover produced a sales increase of $500,000 in 2013, including a $200,000 increase in gross profit for one store.
Pope also invested heavily in LVT, which grew 50% last year. “Our sales with Armstrong and Mannington have skyrocketed,” he noted.
Abbey Carpet & Floor, Anniston, Ala.
Ted Gregerson, president and owner
Gregerson said he does not diversify his product assortment just for the sake of diversifying—there has to be a clear and compelling reason. He seized that opportunity last year when he replaced his space-consuming area rug section with tile, and then added granite countertops and backsplashes. For customers shopping for kitchen tile, it proved to be an easy add-on sale as most shoppers did not even seek a second estimate.
After several years of small growth, Gregerson said sales increased nearly 16% in 2013 for his Abbey Carpet Anniston location and Floors to Go stores.
“The two things we don’t quit on are advertising and inventory,” he explained. “We probably are spending more on advertising than ever before. We have been successful with direct mail the last 18 months and pay-per-clicks. We view advertising as an investment.”
Gregerson is not cutting back on inventory, either. These days, his stores are stocking more LVT than ever before, while soft carpet is another strong area. “We had a really good year with soft fibers. When people want carpet these days they want really soft carpet.”
Through March 2014, the Anniston store is up 25% over the same period last year; Gregerson’s Floors to Go operation is up 10.3%.
Westbay Floor Source, Westlake, Ohio
Eddie Towles, co-owner
After his business grew 13% in 2012, Towles made a bold move in anticipation of improving economic conditions: He hired two new salespeople and four additional installation crews.
The investment led to a 25% increase in sales in 2013. “To grow 25% on top of a 13% increase was a nice surprise,” he said.
Staff wasn’t the only area in which Towles expanded; in January 2012, he expanded his now 10,000-square-foot showroom by one third. “When we saw the market trending back up we decided to remodel the entire showroom. You have to be prepared for busier times. Plus, people want you to keep up with the times.”
Westbay Floor Source carries flooring across all categories, and 60% of the business is now custom installations. “We don’t want to limit our assortment; we want to keep all doors open,” Towles said. “LVT is a huge growing segment of our business and we plan to give it more space in our showroom and cut back in other areas.”
The Flooring Gallery, Louisville, Ky.
Nick Freadreacea, president
According to Freadreacea, double-digit sales growth in The Flooring Gallery was due to reducing the number of retail locations from six to five. “I was very happy with one less store and the overhead reduction that came with closing a location.”
Freadreacea cited several factors that contributed to the retailer’s success in 2013, including higher consumer confidence. Retail traffic and sales stayed strong throughout the fall selling season as opposed to the yearend drop off of the past several years. Builder business also helped The Flooring Gallery’s expansion, as it had its biggest growth in new construction since 2007. “Land is being developed again and rates are very attractive,” Freadreacea said.
Furthermore, The Flooring Gallery kept advertising consistent all through the recession “so consumers did not forget about us when the economy turned.”
The Flooring Gallery grew in all hard surface categories in 2013, with explosive growth of LVT delivering new revenue streams.
Freadreacea has also seen the return of the customer who prefers professional installation. “A lot of people have had a bad experience with the box stores on either DIY or poor installation, and now they want to shop with someone that can do it all for them.”