So I’ve had a little time now to digest the hiring of Michel Vermette by America’s Floor Source to basically run the company. At first I was a little perplexed as to why a retailer would tap a manufacturing executive and why a manufacturing executive would be attracted to retail. Then I came out of the ether and it started to make a whole lot of sense.
First of all, Vermette has to find the opportunity refreshing. Over the last 20 years, everywhere he’s been he’s been charged with turning something around. OK, I’ll say it: fixing someone else’s mess. And he’s had a pretty good track record. He played a key role in righting the ship at Dal-Tile nearly 20 years ago and integrating it into the Mohawk family. Then, to make sure he didn’t get bored, he was tasked with turning around Mohawk Commercial. Today it is a powerhouse; a little more than a decade ago it was not. Most recently it was Armstrong, but not even Sully Sullenberger could have landed that plane on any runway, let alone the Hudson River, especially once COVID-19 created supply chain nightmares.
This time around, he doesn’t have to fix anything. Sure, there are some needed tweaks. But this is a well-capitalized company that is positioned to only grow. I wouldn’t be surprised if it goes public one day. Or someone like 31st Street Capital shows up on the doorstep in a Brinks truck.
America’s Floor Source wants to acquire companies—$20 million and up is preferred. Go big or go home. Well, Vermette knows how to go big; after all, he was involved in the due diligence, eventual acquisition and integration of Unilin by Mohawk. You have to figure if he helped integrate a $2.8 billion purchase, he can do $20 million in between ordering vintage wine bottles for his wine cellar.
As for America’s Floor Source, a company that is doing $200 million needs to source internationally. Do it wrong and you stand to lose boatloads of money. Vermette helps there.
But before anything, Vermette was talking about the opportunity that exists within the current infrastructure. America’s Floor Source does retail, builder, multi-family, commercial and wholesale in five cities: Columbus and Cincinnati, Ohio; Louisville and Lexington, Ky.; and Indianapolis. But he told me the company was not coming close to maximizing the opportunity with those five channels in those five cities. He thinks there is another $100 million on the table just with that.
But here’s the fun part: Vermette knows what America’s Floor Source should be paying for products because he was on the other side. He already has seen that the retailer is in many instances not getting the best deals for certain items, because he knows what he was selling those products for to other retailers. So if you’re a manufacturer or supplier, I’d invest in a pencil sharpener. As he said to me the other day: “I’m going to make sure a company of our size gets treated as we should.”
Strap in, kids.
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While I’m thinking of it, time is running out to vote for Floor Covering News’ annual Award of Excellence. The deadline is April 7, so there are only weeks remaining before the votes are tabulated.
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