Distribution: Wholesalers reap rewards of the red-hot LVT/WPC categories

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

By Ken Ryan

 

Most would agree that year-over-year growth among flooring distributors isn’t what it once was, especially in relation to pre-2006 recession rates. Today distributors are eking out much smaller gains, around 3%-5%, with those that choose the right product mix enjoying the most success.

“You could be doing all the right things, but if you don’t have the right product it doesn’t matter—you won’t be successful,” said Jeff Striegel, president of Elias Wilf, Owings Mills, Md. “If you have been successful in recent years it means you caught that LVT wave. Products are driving growth these days; categories are driving growth. If you are a distributor that does a lot of sheet vinyl and laminate, he will tell you the world is coming to an end.”

But the flooring distribution world is not coming to an end. In fact, it is growing and the LVT/WPC/rigid core segment has much to do with that movement. Distributors have been retooling their portfolios to make ample room for this still-expanding category.

LVT/WPC/rigid core has infiltrated all segments of the business and taken share from resilient sheet goods, VCT, laminate and other hard surface products. “What has been surprising is how LVT/WPC is taking share even from hardwood flooring,” said Scott Rozmus, CEO of FlorStar Sales, Romeoville, Ill.

Others attest to the shift in demand. Striegel believes you will never make a wood customer a laminate customer, but you can make a wood customer an LVT customer. “It is impacting a wider breadth of products,” he said.

What’s fascinating about the broader LVT category, observers say, is there have been several iterations, from click LVT to WPC to rigid core. LVT was the hot product for a few years, and WPC, while it is still growing—led by USFloors’ COREtec—was the breakout star in 2016. In 2017, rigid core is making significant inroads. “The rigid core product is just getting started,” Striegel said. “The potential for it is staggering.”

It is estimated that Lumber Liquidators, long a bastion for hardwood and laminate, now does approximately 20% of its business in vinyl planks—something that was unheard of five years ago. Denver Hardwood, which at one time was nearly exclusively hardwood flooring, said WPC and rigid core experienced double-digit growth in every facility it manages in 2016. In fact, rigid core is now its strongest segment, led by the company’s Neptune brand.

Many observers like to compare laminate’s growth in the early Pergo days to LVT/WPC’s current rally. However, laminate wasn’t used commercially back then, and until a 12mm version came out it wasn’t used in builder applications, making it almost exclusively a retail residential product.

LVT/WPC/rigid core, meanwhile, crosses all barriers. “It’s huge in commercial, there are no boundaries by channel,” Striegel explained. “WPC is nothing more than LVT with a different core if you really look at it. LVT is still coming out of its embryonic state; maybe now it’s a teenager. There is more change to come.

“If you look at the landscape … LVT gluedown and LVT click, today rigid core is quickly becoming the locking mechanism. We will see a lot of the locking LVT go over to WPC. LVT will become mostly gluedown—it fills a need for durable waterproof flooring. For installations and durability, LVT solved a problem. We will see several generations of this product develop. We will see different cores, gauges, thicknesses. LVT is the most versatile, diverse flooring I have seen in decades, and I am seeing plenty of upside growth in this category.”

Others agree that healthy growth is likely to continue, just not at the astronomical levels seen in the last three years. Some say they are starting to see pricing pressure on the category, which, if it continues, could certainly put a damper on this runaway success story.

In Wilf’s Mid-Atlantic territory there are 41 LVT lines available. In its heydey laminate peaked at 36 suppliers. “We have hit saturation,” Striegel observed. “Every commercial carpet guy has a line now. You can’t even get distribution for some of the lines. I believe in the next 12-18 months we will see a clear separation from those committed to the category vs. those who are just participating it.”

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