By Steven Feldman
Novalis remains on track to take rigid core production stateside in the third quarter. Novalis will be one of only a handful of manufacturers with domestic rigid core capability by 2021. However, unlike most others, it has been doing this for 30-plus years—only on the other side of the world.
The difference between Novalis and the other manufacturers is knowledge and experience, according to Steve Ehrlich, vice president of sales and marketing. “Novalis has a history dating back to 1984 and has always been at the forefront of innovation,” he told FCNews. “We will have the most up-to-date and state-of-the-art SPC factory run by the most experienced company in the U.S.”
It’s no secret that companies have tried to manufacturer LVT, SPC or WPC domestically, but a year or two later they’re still sourcing. Why? “It goes back to experience,” Ehrlich explained. “We’re an LVT manufacturer; we’re not a carpet manufacturer. We’re not a wood manufacturer. So, we haven’t added on these businesses to our portfolio like a lot of other companies who have with LVT. We are specialists. We have 30-plus years of LVT experience and the foremost LVT experts in the world working for Novalis. Others may have tried to add luxury vinyl capability now that the category is booming, but they had no expertise in doing this. It was a ground-up thing for them. We’re not doing something new; we’re just doing what we do best somewhere else in the world.”
There are obviously many advantages to manufacturing domestically, especially now as tensions escalate with China. But the key for Novalis will be innovation. “Everything we are going to do here will be new and innovative,” Ehrlich said. “We will be making new products and finding new technologies to build on existing products here. So, it’s the next evolution for us.”
Ehrlich noted that products coming out of this facility will not cannibalize anything Novalis is doing in China. He also shared that manufacturing domestically does not necessarily mean higher prices despite the higher labor costs. “There’s a lot that goes into the production process,” he explained. “You have the raw materials, you have the finishing materials and then you have the logistics. When we balance all of the variables, we feel that we’re going to be really competitive.”
Specialty retailers benefit from that innovation possibly more than they may realize, according to Novalis. When a company doesn’t innovate, they must rely on price as a competitive advantage. This can commoditize a category. With the innovative products slated to come out of the Dalton facility, retailers will be able to offer something different and maintain margins, Ehrlich noted.
Novalis said it does not play at the lower end of the market. “We’re never going to be an opening price-point player—that’s not our niche,” Ehrlich explained. “We produce high-end products and are usually priced at the mid to upper end of the retail spectrum.”
Differentiation is a hallmark for Novalis, something the company said sets it apart from the competition, particularly in terms of technology. A prime example, Ehrlich noted, is its Nova Shield coating, a patented coating exclusive to Novalis.
“Marketing from other manufacturers has sent the message to customers that they need a 20-mil wear layer, and a 12-mil wear layer is no longer sufficient,” he said. “But what the consumer doesn’t realize is no one walks on the wear layer anymore. It is the coating that is really what’s important. We’ve tested our coating in all possible environments, and we perform at, or better than, any other coating on the market.”
Specialty retail remains strong
Novalis was trending up significantly at specialty retail through the end of March. “We got off to a fast start,” Ehrlich said. “People were excited about our new product launches that were introduced at Surfaces and the expansion of our Maybree collection premium offering, a 20-mil rigid core SPC.”
According to Nate Hohenstein, director of strategic accounts, this was only a continuation of the success Novalis had in the fourth quarter of 2019. “We finished 2019 very strong,” he said. “Our team placed 1,000 displays at specialty retail in 2019. A brand-new display and brand-new concept we call the Flooring Design Center houses all of our residential products. Getting that on the street meant that we started to see the dividends pay inQ1.”
Driving that growth was the Serenbe collection, which consists of 12 tiles and 12 planks that are available in either rigid core or glue down for a total of 48 SKUs. “That is by far our No. 1 selling line,” Hohenstein said.
Despite the industry slowdown in late March and April due to COVID-19, Novalis is still trending up for the year. “We’ve had weeks of spikes; we’ve been down and then we’ll spike back up to a normal run rate every other week,” Hohenstein explained. “But we’re back at the run rate that we were seeing for the first three months of the year.”