By Reginald Tucker The skyrocketing popularity of SPC/rigid core continues to lure new players to the game—from those that manufacture other flooring products to pure startups. Each comes with their own unique story or product iteration. Lions Floor is no exception.
Lions Floor, based in Santa Fe Springs, Calif., was founded in 2017 after parent company Lions Investment and Trading saw an opportunity within the floor covering industry. “We realized there was a category of flooring product called SPC that had just taken off in the market,” said Jerry Guo, president of Lions Floor. “WPC at the time was still popular, so our initial product launch was a WPC. But we saw SPC had a benefit to the market because of the cost efficiency.”
Lions Floor did not enter the market with guns blazing. Rather, it dipped its feet in the water one toe at a time. It began with a regional approach, strictly servicing the Southern California area. “We started by focusing on the local Los Angeles market, and it generated $10 million in sales in the year 2019,” Guo told FCNews. “We did not rush into the out-of-state market in the beginning. Rather, we wanted to further penetrate our local area. Plus, we wanted to make sure we had enough inventory for our customers’ needs.” The success was also attributed to offering what Guo called “the most competitive pricing in the market” along with on-trend colors within its collections.
When Lions Floor was finally ready to expand beyond the Southern California market, it chose to exhibit at Surfaces 2020. “We had built some solid collections,” Guo said. Slowly, the company expanded into Arizona, Nevada and Washington state. It also has some business in Texas, Utah and New Jersey. The result: Lions Floor doubled its business from $10 million to $21 million—all in the midst of a pandemic. Lions Floor now plans to open warehouses throughout the country to service its customers.
While Lions Floor will not be the least expensive supplier in town, it won’t be too far off, so its business partners can make some money. “Back in 2018, when the tariff started, importers were raising prices,” Guo recalled. “We actually lowered our prices. When SPC first launched, many companies were pricing it at a very high margin. Therefore, we knew we could be competitive in pricing, because we had a sense that the price of SPC would eventually go down and the profit margin would shrink. So, our first approach was to lower our price to our partners.”
Like so many importers of SPC, Lions Floor does not own any of the factories where its products are made. However, unlike many others, Lions Floor sees this as a competitive advantage. “We are from China, we understand the manufacturing community,” Guo explained. “Basically, 90% of the manufacturing comes from one town. We saw there was a low barrier to entry with SPC. Because others could also import their own products into the U.S. from China, it was extremely important for us to build a solid relationship with a top volume producer in the town.”
While 80% of the business is in SPC, Lions Floor also sells laminate, and the company said it has plans to be in the hardwood segment of the flooring business in the future. “Hardwood is one of the most long-lasting products in the floor covering industry,” Guo said. “We want to be in that market to further establish ourselves in the industry. We want our business partners to feel secure, and to build lasting partnerships. Therefore, we need to have long-lasting product selections in our inventory, and not just ride the trend of SPC.”
A winning formula
Lions Floor aims to achieve success and greater market penetration by focusing on three essential elements: customer service, product quality and inventory. Guo explained the formula in more detail:
- Customer service. “Our customer service team is always there to address clients’ needs immediately and to the degree where they feel satisfied.”
- Product quality. There are plenty of choices in the market for similar colors and styles. Lions Floor seeks to leverage product quality to its advantage. “Our products have undergone testing in U.S.-based laboratories,” Guo said. “Everything is specified and built to industry standards. As a result, we had very limited claims over the past three years—in 2020, our claim rate was less than 0.5%.”
- Inventory. As an importer with extensive warehousing capabilities, Lions Floor works to ensure it has ample supply to satisfy customers’ needs. “We have 53 colors in our product selection, and we made sure all are trendy,” Guo said. “We have demanding customers, and we respond by preparing our inventory at least 50% more than our immediate sales. The customer can be assured that most of the colors will be in stock and available whenever they need it. This approach also prepares us for future growth.”
Lions Floor’s warehousing capacity continues to grow. Its initial starting point was a 20,000-square-foot warehouse in the City of Industry for the first few years. Projecting increased demand and growth in the industry, the company moved to its current warehouse in Santa Fe Springs. “This warehouse is 33,000 square feet, and it has served the company well in the past year,” Guo said. “But in anticipation of the upcoming growth, we are in the process of acquiring another warehouse—this one spanning 52,000 square feet—in a prime location in Paramount. We expect the purchase to be completed as early as April 2021.”
The biggest challenge impacting Lions Floor’s growth is the longer lead time given the current issues with containers and delays at the major ports. “Every single year, before the Chinese New Year, we face difficulty with shipping,” Guo said. “But this year, it is extremely bad for the freight companies as they struggled to push their vessels out the port. As a result, there are constant postponements. This is due to the lack of labor in China to haul the containers to the seaport during the holiday. Right here in the U.S., every vessel that comes to Long Beach has two weeks or more of lead time to get offloaded. This is also due to the lack of labor, but it is because of the pandemic. The vessels are just parked on the ocean.”
With the arrival of spring, Guo said he expects demand for containers will only be higher—and along with it shipping costs. “We used to pay $2,000 for ocean freight, plus land drayage,” he explained. “Right now, we’re paying $5,500 to $6,000 for a 20-foot container. And next month, there will be another increase taking place. It seems like a roller coaster that never comes down.”
(For more, see the March 15/22, 2021 print edition of FCNews.)