Mannington enters residential carpet via Phenix acquisition

Home Inside FCNews Mannington enters residential carpet via Phenix acquisition

Nov. 25/Dec. 2, 2019: Volume 35, Issue 11

By Ken Ryan

 

Mannington chairman Keith Campbell, left, and CEO Russell Grizzle cite synergies in the purchase of Phenix.

Mannington Mills’ recent acquisition of Phenix Flooring and Pharr Fibers and Yarns from Pharr USA represents more than the marriage of two similar companies with similar cultures. It also marks Mannington’s entry into the residential carpet arena.

“This acquisition is just a good fit all around,” Russell Grizzle, president and CEO of Mannington, told FCNews. “It adds to the diversity and breadth of Mannington’s residential product offering and gives us a strong entry into residential carpet, which is the largest segment of the flooring industry.” Adding Pharr Fibers and Yarns as well as Phenix Flooring to its portfolio gives Mannington one of the strongest market positions in both residential and commercial hard and soft surface. According to Grizzle, the plan is to sell and market under both the Mannington and Phenix brands.

Mark Clayton, president of Phenix Flooring, told FCNews that his company had been looking to scale its business for some time. In Mannington, he found the ideal partner. “We feel we are very complementary to Mannington—there is no duplication in what we do vs. what they do,” he explained. “There are strengths from each business that can be leveraged by the other. We have a really good team here at Phenix, and I think Mannington recognizes that and appreciates that. This is a great match.”

Executives from both Mannington and Pharr Yarns spoke often about the synergies and common traits these legacy companies share.

“This acquisition made sense in every way,” said Keith Campbell, chairman of Mannington. “Both Phenix and Mannington have a focus on the customer, multi-generational family ownership, a group of talented, dedicated associates and a commitment to a set of core values that drives everything we do.”

News of the deal drew universal praise from its business partners. Flooring retailers and distributors told FCNews they believe the move allows Mannington to diversify its product lines at a time of ongoing industry consolidation. “It makes sense in today’s market for major manufacturers like Mannington to be involved in all product categories,” said Sam O’Krent, CEO/owner of San Antonio-based O’Krent’s Abbey Flooring Center, whose company has been doing business with Mannington for decades. “We are already supporting Phenix, and we feel the Mannington purchase will only be advantageous to us and the retail industry. We are very excited about this announcement.”

Seizing a market opportunity through a smart acquisition like this one was vintage Mannington, according to Jeff Striegel, president of Owings Mills, Md.-based distributor Elias Wilf. “There are going to be strategic opportunities for diversification and better product alignments out there—and in this case, Mannington wasn’t going to be a spectator,” he said. “Mannington has an uncanny ability to find companies where they can exploit synergistic capacities and capabilities that fit with their portfolio and which will better position [Mannington] in the market- place. I’m elated for them.”

Striegel said Mannington over the decades has demonstrated an ability to manage brands effectively, regardless of their go-to-market strategy. “I’m never worried that they would acquire a company and then pollute the brand,” he explained. “I have total confidence in the leadership of Mannington.”

Phenix president, Mark Clayton, called the pairing with Mannington “a great match.”

Some flooring dealers said they were initially surprised by the deal but see merit in the move. “Much as manufacturers are in the mode of diversifying, it really makes a lot of sense for Mannington [to make this acquisition] in the evolving flooring world we are involved in,” said Craig Phillips, president, Carpet Country and Barrington Carpet & Flooring Design, Akron, Ohio.

A.J. Boyajian, co-owner of A.J. Rose Carpets & Flooring, with three Massachusetts locations, said he was surprised to see this acquisition in light of the trend of carpet mills getting into hard surfaces—not the other way around. “However, both companies are great to work with, so this merger may end up being great for both,” he explained.

Phenix Flooring and Pharr Fibers and Yarns are headquartered in McAnville, N.C., with operations in North Carolina and Dalton. The two divisions employ approximately 900 people.

Grizzle said no layoffs are planned. No terms were disclosed. The acquisition is expected to close in early 2020.

In a separate but related move, Pharr USA reached an agreement with Coats Group plc (Coats) to purchase Pharr High Performance, yarn supplier for the protective apparel industry.

“As a result of these transactions, each of these Pharr businesses will become part of much larger operations with greater capacity, resources and reach,” said Bill Carstarphen, president and CEO of Pharr USA. “We sought leaders in their industries with proven track records, and who understood and respected what we had built. Coats and Mannington emerged as ideal partners in all regards. We expect these transactions will result in a broad range of future opportunities and growth for our associates.”

Noting the company’s 104-year legacy, Mannington’s Campbell concluded, “We have a long history of commitment to our customers, associates and communities, and today we are so pleased to welcome the Phenix and Pharr associates into the Mannington family.”

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