Armstrong Flooring: Prospects look brighter under AHF

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Armstrong Flooring
AHF Products has invested more than $35 million in the Lancaster plant, originally owned by Armstrong Flooring.

Mountville, Pa.—What a difference a year makes. When AHF Products finalized its purchase of certain assets of the Armstrong Flooring brand last year, there were some question marks about what the company would look like moving forward. Would the “new” Armstrong Flooring retain its storied cachet and position in the market as a standalone brand under the AHF Products portfolio? What would its manufacturing base look like after staff reductions and some plant closures leading up to the sale? More importantly, would the distribution community embrace and re-engage with Armstrong following several years of change and disruption?

All these questions and more were answered when Floor Covering News met up with the AHF Products executive management team, employees and manufacturing staff during a recent visit to its headquarters here.

When AHF Products swooped in to purchase select Armstrong Flooring assets and intellectual property last summer, it not only saw an opportunity to expand its growing brand/product portfolio, but also to explore opportunities for improvement for the business it was acquiring.

“In Armstrong we saw the strongest distributor network in the country that was being underutilized,” Brian Carson, president and CEO of AHF Products, told Floor Covering News. “They are among the strongest, most well-capitalized distributors. And for a whole variety of reasons, they were completely underutilized. In terms of brand recognition, with Armstrong we now have two of the three best brands in the industry; Bruce and Armstrong are at the top. America was built on these brands; we grew up on these brands. And in the residential space and in the commercial space, the Armstrong brand means a heck of a lot.”

AHF Products—which ironically was spun off from Armstrong Flooring when it divested its wood business back in 2018—also saw an opportunity to leverage Armstrong’s manufacturing footprint and expertise. “There was actually a lot of money invested in these factories,” Carson stated, citing Armstrong’s resilient plant in nearby Lancaster as well as its VCT production facility in Kankakee, Ill. “I’ve been in many factories around the world, and I’ve built a lot of factories; this is world-class equipment.”

Aside from those high-tech manufacturing investments, AHF Products also recognized the “human capital,” the experienced workforce that comprises its production staff. One of the first objectives for AHF right out of the gate when it acquired Armstrong was to demonstrate its appreciation for the folks who toiled day and night at the factories—even during times when the future may have looked a little uncertain.

“In the past, we had a workforce that—to be fair—probably had more than a fair amount of losing seasons over the last six to seven years,” Carson noted. “It was the same thing that we saw when [American Industrial Products] bought the wood division of Armstrong—the precursor to AHF. Prior to that purchase, the wood business had a few losing seasons as well, but there was this fire in the folks who worked there. They wanted to win. When I went into the resilient plants and had crew meetings with the folks and management before we bought Armstrong, we viewed it as a fresh start.”

Of course, it didn’t hurt that Carson worked in some of those same factories decades ago. That experience gave him the right perspective he needed to change the culture. “I’ve been out of manufacturing a long time, but I worked in the Lancaster plant 35 years ago and in the Kankakee plant 30 years ago. There are people in that plant who are still there today. They are the most experienced vinyl makers in the country. So the talent was there. The question is, could we harness the mindset, and would they approach it with a winning attitude? We knew the brands were good, we knew the machinery was good and we knew we had a workforce that was ready to put itself back on the horse. The objective for us was to tap into that energy and feed it.”

For employees like Patrick Nolan, current plant manager at the Lancaster facility and himself a 20-plus-year veteran of the company, the change in ownership has been for the better. “It’s like a totally different company today,” he told Floor Covering News during a tour of the facility. “The workers are engaged, they share their ideas knowing management and ownership takes them seriously, and they have a tremendous sense of pride in the products they make day in and day out.”

While AHF and its current owner, Paceline Equity Partners, sought to invest further in the business and elevate the company culture at Armstrong, it was also looking for ways to get closer to the end customer—those who distribute, sell and specify Armstrong-branded flooring. “It’s safe to say that we’re a much more outward- looking business,” Carson stated. “At AHF, we always view the market through the eyes of our customers. We don’t sell directly to consumers; we sell to flooring distributors, floor covering retailers and commercial flooring contractors. So, the question is always, If they’re not buying from us, why is that? We know they’re buying something.”

That shift in mindset to focus more intently on those core customers, according to Carson, forced the company to continue to find ways to add value for them. “As a leader, you have to look at things through the eyes of the customers and ask yourself why they make certain decisions? Our main objective is to look for ways that we can provide better solutions for our customers so they can make more money with our products. Sometimes that’s a new innovation; sometimes it’s a private-label program; sometimes it’s better brand segmentation to protect margins across customers. Sometimes it’s making significant investments—like we’re doing now—to provide lower prices and better value for our customers.”

Sometimes, too, it’s just a matter of listening to the customer. “Sometimes it’s as simple as going out to the customers and asking them why they buy from somebody else and not from us. Because just by virtue of asking them you’re telling the customer that you care about their business. So for us it’s about how we become a more important part of their business.”

Part of that strategy in rebuilding the Armstrong brand entails empowering employees to make decisions that benefit the customer. It worked for AHF Products when it launched five years ago, according to Carson, and he said he’s confident it will drive the Armstrong business moving forward. “At AHF, we connected the employees more to the customers. Guys like Chris King [VP of sales and marketing] and Fred Reitz [VP of commercial] spend a lot of time in the field learning about our customers’ businesses; they’re flooring guys who know the industry. Sometimes we come up with ideas that are grand slams, and some ideas don’t work out. But I’d say we have a pretty good batting average so far.”

Lessons learned

“Our main objective is to look for ways that we can provide better solutions for our customers so they can make more money with our products.” – Brian Carson

AHF Products plans to leverage lessons the company learned when it revived storied brands such as Hartco and Robbins, and then applying those lessons to the revitalization of Armstrong. “One of our strategies is to segment the channel by brand so we can add more customers—that’s really what we’ve been doing from the beginning with AHF,” said Jennifer Zimmerman, chief commercial officer. “We had wood in Bruce and we had wood in Armstrong, but we only had one year to use the Armstrong name, so we converted all of the Armstrong wood products to Hartco. We use our brands to segment the channels.”

King, who was part of the AHF Products team during its relaunch, concurred. In much the same way that the resuscitation of the Hartco and Robbins wood brands helped distributors and retailers fill voids in the marketplace, so, too, will Armstrong Flooring-branded products help customers address their product needs. “Giving our distributors the ability to have brands in certain markets where they aren’t dual or triple distribution so they have the ability to make a little bit more money has created a renewed focus for us,” he explained. “As a result, we’ve essentially doubled our distributor network from when we started five years ago.”

Indeed, distributors are integral to the success of the Armstrong brand moving forward. As Reitz explained: “My grandfather built his career selling Armstrong at one of our distributors, and my father built his career managing the inventory of Armstrong products. Now I run Armstrong’s commercial business, so I’m really a testament to building brands across several generations.”

More importantly, it represents the continuation of a strong legacy. “If you think about how many dealers, distributors and contractors built their livelihood on the Armstrong brand—that was in danger of disappearing,” Carson stated. “Thankfully, it did not disappear. We’ve discovered there’s an affinity AHF Products and what we’re doing to support retailers with brands they can build their businesses on.”

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Aug. 14/21, 2023

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