Executive Forecast: Carpet—Mills predict rebound as improving economy takes hold

December 16, 2016

December 5/12, 2016; Volume 31, Number 13         

By Ken Ryan


While 2016 was less than stellar for carpet mills—due in part to the acrimonious Presidential election that some believe hurt consumer spending—executives are looking to bounce back in 2017. Buoyed by an improving economy that many see gaining significant traction, mill executives are forecasting anywhere from a 2%-5% gain, which, if true, would easily eclipse 2016 figures.

Mark Clayton, president, Phenix
screen-shot-2016-12-16-at-9-31-09-amWhat is your projection for category growth next year?
We anticipate the soft surface category will experience modest improvements with a more robust opportunity in the mid-upper ends of the market. There is pent-up demand and we are hopeful that continuing favorable economic indicators will result in a more confident consumer.

What is the “X factor” that will impact business next year?
From a carpet perspective, I think it will be the continued popularity of hard surface and the manufacturers’ ability to create and bring to market soft surface products that are compelling enough to maintain and take back market share. Obviously the state of the economy will also be an “X” factor.

Where do you see opportunities for next year? Challenges?
There will continue to be wonderful opportunities for those who are able to bring unique styling, solutions, simplification and differentiation to the consumer. We will continue to be challenged with the increase in popularity in hard surfaces. Our response is to develop products and programs to support those opportunities and leverage the unique attributes of soft surfaces.

What are some of your biggest initiatives for 2017?
We will introduce several new product platforms at Surfaces 2017. This will represent our most dynamic launch of new programs to date. In addition, we will follow up on our successful 2016 hard surface launches with the introduction of several new products and programs. These products will offer a unique technology to help simplify consumers’ lives.


Steve Hillis, president, Beaulieu Group
screen-shot-2016-12-16-at-9-31-14-amWhat is your projection for category growth next year?
The projection for 2017 overall flooring industry growth is 3%-5%. We feel that we could experience greater growth at Beaulieu because we are investing in new products, new displays and a major focus on marketing and branding.

What is the “X factor” that will impact business next year?
The biggest factor is interest rates. Many owners and developers have been waiting to see what the interest rates do, and many expect to see rates rise in the first quarter of 2017. We feel economic conditions will remain strong and could gain steam if the new administration is able to lower corporate tax rates and keep jobs in America.

Where do you see opportunities for next year? Challenges?
We see opportunities with our hard surface business for the residential and commercial markets as well as growth opportunities in the upper end of residential and corporate markets. The challenges will be maintaining a strong housing increase and stable economic environment. Adding labor in the plants could be a challenge as the flooring industry in North Georgia has low unemployment and the competition for labor is fierce.

What are some of your biggest initiatives for 2017?
Some of our top initiatives at Beaulieu for 2017 are to focus on expanding our residential and commercial product offerings with many stylish and innovative carpet and hard surface products. Updating our brands, investing more in marketing, and training the sales team will be key initiatives.


Doug Jackson, vice president of sales, Tuftex
screen-shot-2016-12-16-at-9-31-20-amWhat is your projection for category growth next year?
In 2016 we gained market share in soft surfaces, staying a few points ahead of the industry. We remain conservatively optimistic and expect to perform similarly in 2017. We have to continue to deliver unique looks to consumers and dealers while offering the best quality and service.

What is the “X factor” that will impact business next year?
The industry continues to innovate and create more flooring options. The consumer is bombarded with options, information and sometimes distraction. The manufacturer who can capture the attention of a consumer who seeks immediate inspiration and needs transparency in all transactions . . . will lead the way in 2017 and beyond.

Where do you see opportunities for next year? Challenges?
The shift from soft surface to hard surface is both an opportunity and a challenge. No soft surface manufacturer can expect the average order to be what is has been these past five to 10 years. Our Signature Collection product mix and especially our newest introductions featuring sophisticated 3-Color Point technology are a timely response to the smaller carpet install but of a higher end product.

What are some of your biggest initiatives for 2017?
We will continue to support the Tuftex Classics collection with fresh updates for 2017. The “heart of Tuftex,” our Signature collection, will be fortified with a strong offering of new Anso Caress textures and level-cut-loop patterns; 2017 will be defined by some of the most innovative yarn blends, constructions and designs ever introduced.


James Lesslie, executive VP – sale, Engineered Floors
screen-shot-2016-12-16-at-9-31-26-amWhat is your projection for category growth next year?
Post-election we have seen positive momentum. We believe that momentum will carry into 2017 for a positive year of growth in the carpet industry. We also recognize that 2%-3% top line growth in 2017 would basically allow the industry to recover to 2015 levels.

What is the “X factor” that will impact business next year?
The biggest “X” factor for the overall economy is our new President. Can he build coalitions in the House and Senate to encourage U.S. manufacturing investment and improve our economy? Specific to carpet, suppliers who bring new innovations in styling, performance and value to the consumer will be rewarded and continue to grow.

Where do you see opportunities for next year? Challenges?
We see a number of opportunities for growth in the year ahead especially in Main Street and modular carpet with the addition of our Pentz Commercial Solutions line. We are also in the process of developing some additional products and features for 2017. As for challenges, they’re no different than any rapidly growing business, and they’re all good…plant expansion, personnel additions, increasing territory, etc.

What are some of your biggest initiatives for 2017?
Engineered Floors has experienced rapid growth over the last six years, and we expect that to continue into 2017 as one of the fastest-growing carpet companies in the world. We have grown to 3,000 employees since our inception in 2010. We see our role as leading the way for growth in carpet, whether it’s in residential, new construction, multi-family or Main Street.

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