February 18/25, 2019: Volume 34, Issue 19
Invest heavily in state-of-the-art manufacturing innovations, bring creativity and excitement to a category under siege from competing hard surface segments and leverage the strongest brand portfolio in the hardwood flooring category. Those key objectives are high on the list of goals that industry veteran Brian Carson plans to implement as the newly appointed CEO of AHF Products—the spinoff company created when American Industrial Partners (AIP) purchased the wood business from Armstrong Flooring last year (FCNews, Nov. 12/19, 2018).
Carson, who brings more than 28 years of experience in the flooring space—including the last seven as president of Mohawk Flooring North America and a total of 16 years in operational leadership roles with Armstrong World Industries—plans to launch a record number of new products while undertaking a series of initiatives to streamline operations. All of this in the inaugural year of a standalone company.
FCNews publisher Steven Feldman and Reginald Tucker, managing editor, recently sat down with Carson to hear more specifics on his strategies. Following are excerpts of that discussion.What are some of the things that intrigued you about the position of CEO, AHF Products?
For one, it’s an industry I know. Heck, I used to run these plants. But more importantly, it’s a business that I think can be dramatically improved. Fifty years ago, people wanted wood floors; 20 years ago, people wanted wood floors; and today, they still want wood. It’s the investment that increases the value of the home. So why would anybody settle for less when they could have the real deal? Many companies have focused on these other ‘wood-look’ products, which I believe created a leadership vacuum in the wood category. What does AIP bring to the table?
We’re now owned by AIP, a private equity firm. These guys are fantastic operators who also have deep knowledge of the hardwood business. They own several other hardwood companies—not necessarily hardwood flooring—including timber companies. AIP also owns the old Armstrong cabinet business, which has experienced phenomenal growth. I think this is a fantastic group to be partnered with. It was a match made in heaven. What’s the first thing you plan to turn your attention to right off the bat?
I’m a big believer that if you’re not moving forward to create more value for your customers, then you’re moving backwards. We have a great team here with a lot of ideas and innovations. Now, it’s about how do we get the flywheel turning faster. There are some incredible ideas in this business on how to make things better, and there are some innovations that have been sitting on the shelf possibly for too long. In our inaugural year as a standalone company, we are pursuing a transformation of AHF Products. We plan to launch a record number of new products and operational initiatives.
So mission No. 1 is to execute on the ideas that we already have and then put our minds to work on what are the next innovations that we’re going to bring out into the market. We’re all rolling up our sleeves and getting down in the trenches. I think we can really grow this thing and help our channel partners make a whole lot of money and provide solutions to their customers. That’s not only distributors but our retailers as well. We want them to feel a high level of excitement, a level of commitment.How are you going to help your channel partners make money?
I think we can bring leadership and innovation back to this category, and we can breathe some marketing excitement back into hardwood. We can do some things in the area of channel segmentation and brand segmentation so all our channel partners can make money. Have you put together an executive leadership team?
I’ve been extraordinarily impressed with the team that I have here. Mike Bell, formerly chief transition officer and now COO; Chris King, vice president of sales; Wendy Booker, vice president of marketing and product development; and Jeff Steed, CFO. While Jeff is new to hardwood flooring, he has spent a large part of his career in the hardwood industry. He’s going to make us all smarter. How do you plan on handling distribution of the various brands? Will there be a stratification according to channel?
With AHF Products’ portfolio of brands (Bruce, Capella, HomerWood, Armstrong, etc.) along with our manufacturing capabilities, we can again be the leaders in the wood category. I think there’s a lot of opportunity here. We are going to adopt a brand hierarchy strategy. Obviously Bruce has tremendous equity and is really a workhorse brand, but we also need to have a strategy that helps trade up the consumer. HomerWood is going to play a role in that strategy, but I also see a real opportunity to help segment the channels as well. We’re very fortunate in that we have an arsenal of brands that no one else has out there. We will obviously support those brands by highlighting innovations to help differentiate the channels so all our channel partners can increase their profitability using our products. So, in short, the brand marketing strategy will cut across all channels?
Yes. That’s retailers, distributors, builders and even national accounts. They are all essential to growing our business. Our job is to get the best innovations with the best marketing into these channels and let them have a lot of success and have a lot of fun with it. What will become of the Armstrong ‘hardwood’ flooring brand?
We’ll go through the orderly transition out of the Armstrong brand and then we’ll move on. We expect that to happen within the next couple of years. What’s your forecast for the market short term vs. long term, and how do you see AHF Products growing in relation to that?
Over the last two to three months we have seen some slacking in the overall market for all products. For almost 10 years we have seen pretty steady growth. Housing starts have slowed, but I don’t see a bubble in the market. I see the market continuing to grow. We may see a pause in that growth, but I see the markets as being relatively healthy. Our job at AHF Products is to outperform the market. Obviously we can’t control what goes up or down, but what we can control is how we perform in the market. And I think with the right products merchandised in the right way in the hands of the right channel partners, there is tremendous potential for our business regardless of what the overall market is doing. How do you foresee your ideal product mix relative to what you make domestically vs. what you import?
In that regard, what’s most important is providing products that add value, whether it’s unique styling or performance features. There is a role for sourcing, but there’s also tremendous value in improving existing manufacturing capabilities. Our primary goal is to innovate. Are you currently happy with your factories, or is that something you’re going to look at carefully?
My job is to not be happy with the level of innovation because the second we become content is the second we start moving backwards. (Just look at what happened to companies like Blackberry.) In fact, just last week we approved some significant investments in the company, and we are going to invest in our manufacturing plants. I want to see better products coming out of our factories and we’re going to spend money to do that. We’re also going to invest more in our marketing and styling. Our job is to provide better tools to our channel partners. You need to have a healthy dissatisfaction and impatience with the status quo in order to be successful.