Distribution: Despite threats from LVT/WPC, segment hold its own

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November 6/13, 2017: Volume 32, Issue 11

By Ken Ryan

 

Prior to the explosive growth of LVT/WPC, hardwood was the hot product in the hard surface flooring segment. In fact, 2012 and 2013 saw some of the largest increases in the wood category, with double-digit gains each year.

Since then wood has continued to grow, albeit at a declining rate. Some observers surmise that this slow growth, which in many ways mirrors the overall flooring industry over the past five years, is the new normal. “I think wood growth is going to level off for the industry in the low single digits going forward,” said Torrey Jaeckle, vice president of Jaeckle Distributors, Madison, Wis. “What we are seeing is the wood jobs we are getting are larger average sizes, which has a positive impact on growth. The average order size (in square feet) is up 15% from several years ago. Wider widths and scraped product continue to show steady gains, and while you can get those same looks in a number of different product categories now (LVT, ceramic, laminate), real wood still remains an aspirational product for many consumers and will continue to do so. I think what we are seeing is the designs of other products have become so good now some consumers are becoming more willing to give up the real thing for the wear, maintenance and other benefits these other products offer.”

Another leading distributor suggested wood flooring “will never be back to where it was.” His view is the pace of new home builds is down 60% from its peak in 2007 and will be hard-pressed to match the pre-recession levels anytime soon given the shortage of skilled labor that is impacting construction. “The peak of home building is when wood really shined,” he said. “New homes drive building flooring contractors. I don’t know that the builder market will have exuberant growth but I expect it to climb in the low- to mid-single digits.”

Based on the percentage of business distributors still do with hardwood, they are clearly still bullish on the category. Many of the top 20 have wood portfolios in the 25%-35% range; some are lower; a few much higher. Scores of consumers still want genuine wood, not something that merely replicates it. “What we are noticing is wood styling trends seem to be changing quickly. It’s imperative for us to work with our suppliers to provide the latest and greatest looks,” said Chip Moxley, president of Tingle Flooring, Lees Summit, Mo.

Several wholesalers said they have seen a significant shift toward engineered wood vs. solid, and others have seen a steady increase in their unfinished wood business as well.

For Galleher, William M. Bird, Belknap White, All Tile and others, wood remains a constant. It is the largest segment for each of these wholesalers. In its New England market, Belknap White executives says customers remain passionate about solid wood, whereas in its southern area more engineered is being sold.

Laminate
For most top 20 distributors, laminate represents well south of 10% of their product mix, with several saying it is now 5% or less. “Laminate is taking a severe dive,” one prominent West Coast distributor told FCNews.

Blame it on the success of LVT/WPC, which has eroded virtually every other category. But while some have given up on laminate, there are those who are encouraged by new developments, in particular some of the new water-resistant offerings.

Mannington’s Spill Shield, for example, was cited as a product that offers true differentiated advantages. “Laminate has surprisingly held its own because it has been embraced by the builder channel,” said Jeff Striegel, president of Elias Wilf, Owings Mills, Md. “[The 12-mil format] has made them more comfortable. You can get the wood visuals at a fraction of the cost. It is a much more durable floor from the time it goes in to the time the homeowner takes over [occupancy of the home].”

Distributors who have not abandoned the category have picked up share from those who have. For Herregan Distributors, Eagan, Minn., laminate is still 10% of its business.  “Laminate is showing some positive trends because of stronger moisture warranties,” said Pat Thies, vice president of sales and marketing.

 

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