Deal leverages strengths, broadens opportunities
By Ken Ryan
Haines and Belknap-White Group, the No. 1- and 3-ranked flooring distributors in annual revenue with a combined $700 million in 2017 sales, announced the formation of a partnership intended to improve the strategic effectiveness of both organizations.
As part of this arrangement, each company will hold a seat on the other’s board of directors, and Belknap will hold limited shares in Haines by virtue of an equity investment in Haines, the industry’s top distributor with 2017 revenue at $490 million (FCNews, Nov. 6/13). The investment will help the Glen Burnie, Md.-based wholesaler reduce debt and continue to invest in new business initiatives. “It is a real win for us,” Michael Barrett, president and CEO of Haines, told FCNews.
Barrett emphasized the Belknap-White investment should in no way be misconstrued. “We didn’t need the money; we saw it as a way to start a collaboration process that allows us to do things at a quicker pace than we could have done on our own. We’ve done a lot of benchmarking and best practices with [Belknap-White] in the past. Through this alliance we are taking benchmarking and best practices to a new level.”
The two distributors, members of the Bravo Services Group, will continue to operate as they do today with no change in the leadership structure at either organization.
Ray Mancini, CEO of Mansfield, Mass.-based Belknap-White, said his company is excited to be working with the Haines team in “creating a flooring platform from Maine to Florida that differentiates us from our competitors while working together to help our customers be more successful.”
Specifically, Barrett said the partnership will help both companies in the areas of logistics and global sourcing. “This official relationship will allow us to work very directly with Belknap-White and opens doors in helping us build a strong distribution business. In some areas, they might be able to help us, and they can learn from us as well. It is really a two-way opportunity.”
Employees from Belknap-White will be invited to spend time with their counterparts at Haines to learn how their internal operation works. Conversely, Haines will send some of its key staff to work alongside Belknap-White employees in areas of strategic importance. “My approach is I don’t have all the answers,” Barrett explained. “They do things on the sales and marketing side that we think we can learn from.”
The distributors formed a six-person steering committee with three members on each side. The idea is to collaborate on ways to make each stronger in their respective markets at a time of consolidation within the distribution industry. “The number of distributors is going to shrink in the industry over time,” Barrett stated. “Having a partner like Belknap helps us become stronger.”
One aim of this partnership is to create added value for its vendor partners. Both Haines and Belknap-White are long-term Armstrong distributors. Earlier this year, they were recipients of the Thomas Armstrong Award, which recognizes wholesalers that exemplify integrity, a resilience of spirit and a deep dedication to their customers.
Don Maier, president and CEO of Armstrong Flooring, hailed both companies as exceptional distribution leaders. “Their collective financial strength has allowed them each to invest in their business, build exceptional sales capabilities and deliver world-class service,” he told FCNews. “We believe their partnership should encourage even higher levels of business excellence.”
Maier said he does not believe the alliance will have any negative impact on Armstrong, noting, “Solid, long-standing relationships with our distribution partners, in every geographic region, allow us to continue our legacy of excellence…We believe the investment and collaboration between these two phenomenal distributors should lead to good results, both for them and Armstrong Flooring.”