By Ken Ryan
Haines, the industry’s leading floor covering distributor, recently welcomed 130 flooring dealers to its seventh annual Southern Summit here. The event drew a record number of retailers, Haines noted.
The event provides southern dealers from the Haines Loyalty Club (HLC) with product specials, product knowledge, business training and peer benchmarking opportunities. “It was our best show ever,” Bruce Zwicker, president and CEO of Haines, told FCNews. “The mood was very upbeat.”
The two-day event, held June 23-24, included a product showcase and breakout discussions run by dealers covering a range of topics, from succession planning to installation to boosting profit margins. “We had four of our top dealers running these panels,” Zwicker said. “It was a very popular segment of the summit.”
Another highlight was an expanded product showcase that featured several vendors new to Haines’ Florida market, including EarthWerks and Mullican, as well as several private-label brands.
During the general session, Zwicker provided an overview on the flooring industry, which he noted has been growing at a subdued pace, with 2016 behaving very similarly to 2015. “We all feel like Bill Murray in ‘Groundhog Day,’ ” he said, referring to the movie that depicts a man reliving the same experience day after day. “Last year the industry saw an air pocket in August and the industry lost altitude for a while. This year, the air pocket came in May. Demand for residential remodel took a hiatus. We were all like, ‘What the heck is happening?’ Then June was better. We are looking at an industry that is growing at about 3%. It is performing better than the GDP, which is good news, and the housing industry is performing better than the GDP.”
Zwicker pointed out that since the recessionary bottom of 2009, the flooring industry’s average growth rate has been about 4%, with one year at 7% and all other years hovering at 4% or less. “It has been extremely tepid. Last year the outlook was for three more good years. This year I said we can expect probably two good years, maybe a third good year.”
Haines reports that many of its HLC dealers are clearly outperforming the overall market—in some cases with yearly double-digit percentage increases—by taking share from competitors. In a competitive environment like today, Zwicker surmised that it is all the more reason to be aligned with Haines and its bevy of programs and rebates that can help dealers succeed. Scores are heeding the call. HLC started in earnest in 2007 with a handful of dealers; today there are nearly 600 HLC dealers, including about 130 from Florida. “We keep pushing [HLC dealers] to take full advantage of all the things we offer because not everyone does,” Zwicker explained. “Others do, however; we have some dealers who have 100% Haines products in their showrooms.”
In the past year, Haines has opened up a new warehouse and supplies center in Florida. Its supplies division, which includes equipment and tools, makes up 17% of Haines’ overall business ($500 million), and closer to 20% of Florida’s business. “Last year was the first year we had the supplies business and it is growing like gangbusters. It is a high-margin business.”
During 2016, Haines rolled out a new customer service program it calls Voice of the Customer. Piloted in 2015, Voice of the Customer shares qualitative and quantitative feedback gleaned from every customer transaction. If there is question regarding claims, for example, a notification is sent immediately to that department. “It is a real fast response rate system,” Zwicker said, noting that Nordstrom and some others have used similar programs to improve customer service.
Zwicker also addressed the new management structure at Haines that was implemented earlier this year. Twenty-five individuals were elevated to director level and empowered to make decisions promptly. “It is very energizing and motivating. We have created a more nimble group. Fewer executives make things run smoother. They can develop faster this way. These are vice presidents in the making.”