Retail roundup: Industry cautiously optimistic about Trump presidency

Home Inside FCNews Retail roundup: Industry cautiously optimistic about Trump presidency

November 21/28, 2016: Volume 31, Number 12

By Ken Ryan

Flooring retailers acknowledge that while it is premature to know what a Trump presidency and Republican-controlled Congress will mean for the flooring trade over the next four years, the initial returns point toward a more favorable business climate.

It did not go unnoticed that on Tuesday, Nov. 22, the three U.S. stock indices all broke records, with the Dow Jones Industrial Average closing above 19,000, the S&P 500 closing over 2,200 and the NASDAQ closing over 5,300. All were first-time highs, which may suggest that perhaps President-elect Trump will be good for the economy after all.

While some flooring dealers did not want to speak on the record about the next four years, others provided significant commentary on their hopes and beliefs.

Josh Elder, co-owner of Gainesville CarpetsPlus Colortile in Gainesville, Fla., echoed a sentiment shared by many dealers contacted by FCNews when he said it was “still too early” to say how the election will directly impact business. However, like the others, he found some positive takeaways. “Looking at the way the stock market has reacted is a good sign,” Elder said. “It really depends on the administration Trump brings in, but I am optimistic that the market will continue to rally which will increase consumer confidence and spending. That spending could include housing and that equates to business for us.”

Sam Roberts, owner of Roberts Carpet & Fine Floors in Houston, believes the implications for the flooring industry has to be viewed as a positive. “For any dealer who is largely unhappy with the current business status quo—and retail floor covering has suffered another difficult year in 2016 in many markets–I don’t know what could provoke an expectation of significant change eventuating from a Hillary Clinton administration. Lower taxes, less regulation and pro-growth government policies are all generally good for both small and large business. I would think most dealers would welcome change that might alter current business realities.”

Roberts opined that some possible long-term damage could occur in the event of increased deficits and potential and unforeseeable economic damage that could result from foreign policy decisions and initiatives. “I have no clue as how to factor that into any general prognostication. I think most objections, which largely stems from one’s point of view, to the new administration will largely be on social issues, not economic ones.”

Then again, Roberts noted, “I will be surprised if I am not surprised by something I’m totally missing on this subject.”

Nick Freadreacea, president, The Flooring Gallery in Louisville, has a wish list of what he hopes can be accomplished. “Items that may be good for our industry would be the passage of the Marketplace Fairness Act, which would put brick and mortar stores on equal ground with the Internet sellers; getting some clarity on how subcontractors are viewed by the various governmental departments; repealing the new salary and overtime rules (set to take effect Dec. 1), and maybe even doing something that will reduce health care costs. If he can accomplish any of those items it would be a great step forward for small business.”

Freadreacea said he has already noticed an uptick for small cap stocks, which would indicate this might be good for small businesses—the backbone of the flooring industry.

Casey Dillabaugh, owner of Dillabaugh’s Flooring America in Boise, Idaho,

believes, from a business perspective, the Republican-led legislative branch should equate to progress. As he explained, the rising cost of health care, the various pay requirements and tax rates that can chew up profits in a hurry can make doing business appear frustratingly futile.

“Hopefully, a Republican president and Congress can help with the financial aspect of our business,” he said. “On the other hand, depending on some of the immigration policy that gets enacted, certain states may or may not experience further installer shortage issues. All in all though, I think the pros outweigh the cons for the small to medium, family-owned business.”

FCA Network president Olga Robertson, an astute observer of political events, provided an assessment worthy of a political commentator. “Based on my understanding of President-elect Trump’s outline for the first 100 days, it’s jobs, jobs, jobs and security. He will withdraw from TPP [Trans-Pacific Partnership], which he believes is a jobs killer—although many experts believe it plays into the hands of China by giving them more control over Asia. He will reduce environmental restrictions on production of American energy, which he believes is a jobs killer and will also cut regulations on business. For every new regulation he will eliminate two. He wants to guard against cyber-attacks, examine the Visa program and enact lobbying bans.”

If Trump does even half of what he proposes the first 100 days, Robertson said, it will be good for small business owners who will get some tax relief, and fewer restrictions on new business start-ups and more. “I’m hopeful—but I don’t think it’s likely—that all the Republicans will come together to push through Trump’s agenda, as self-interest will trump the people’s business.”

 

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