California-based Republic Floor, manufacturer of a host of resilient, hardwood and laminate flooring products, continues to expand both its product portfolio and geographical reach through acquisitions. Its latest purchase—that of renowned distributor Hughes Western, based in Salt Lake City—adds not only a private-label carpet brand but also extends Republic’s coverage into Utah, Wyoming and Montana.
“Hughes Western has been a Republic Floor distributor for the past three years,” said Rotem Eylor, CEO of Republic. “It is the largest distributor by volume in its market
and it has relationships with retailers, designers and builders. We estimate they service upwards of 600 retailers. But it’s not only the largest distributor in its market, it’s also the best quality distributor in the area. It was either going in and distributing products on our own or buy the best distributor. So, we bought the best.”
While the purchase price of the deal was not disclosed (a Dunn & Bradstreet report put Hughes & Western’s revenues at just above $14.2 million), Republic Floor said it hopes to more than double the distributor’s business in terms of both sales volume and size. Republic also stands to benefit from the perspective of having a larger footprint.
“The acquisition gives us access to other markets,” Eylor explained, citing plans to open two more distribution centers—one in Boise, Idaho, and another in Colorado—in the near future. “Hughes Western already has distribution centers in Denver, and Idaho is a major market for the company. This is just a natural extension or development for Hughes Western. There’s a lot of potential for both companies expanding in that market.”
With respect to the day-to-day management of Hughes Western, Republic Floor said it plans to maintain the status quo. The logic? If it’s not broken, don’t fix it. “We do not plan on making any changes over there; we’re keeping everybody in their current positions,” Eylor stated. “One of the main reasons I bought the company is the people. Hughes Western is an amazing company when it comes to things like management.”
What will change, however, is the extent to which Republic Floor products will be represented in Hughes Western’s overall portfolio. “We plan to upgrade the distributor’s offering in the sense that we will be bringing more SKUs, more colors and varieties for them to take to market,” Eylor explained. “Up to now, Hughes Western had about 50 colors of Republic Floor out of 300. There’s a lot of room for expansion there.”
The acquisition will also require some adjustment on the part of Republic Floor. “We are a manufacturer/distributor—but not a distributor in the classic sense of the word; distributors handle other brands,” Eylor explained. “Hughes Western carries carpet, and we don’t normally work with carpet. They have their own private label. That’s another challenge we face—to learn new markets and new products and think how we’re going to utilize them throughout the locations.”
Another major benefit of acquiring Hughes Western—and perhaps the driving force behind purchasing the distributor in the first place—is it will help put Republic in a much better position to service members of the National Floorcovering Alliance (NFA). Last year, NFA elevated Republic Floor’s status with the group to “core” vendor—up from specialty vendor.
“A big part of our decision to go nationwide was because of NFA,” Eylor revealed. “As we grow, we will be everywhere in the U.S. locally so we can better service those accounts. That’s what we’re doing by taking over Hughes Western. The company is like a glove to a hand—it fits exactly with what we were trying to do.”