Earlier this year, industry veteran Drew Hash was named president of Southwind — adding CEO to his business card in May. This is Hash’s second stint at the helm of a flooring manufacturer, having served as president of Zickgraf Hardwood until its purchase by Shaw in 2008.
Hash brings a wealth of experience to Southwind, having managed sales at Armstrong in the early 2000s as well as sitting atop Shaw’s hard surface category management for 15 years. Hash is now charged with leading Southwind into new categories and channels.
Hash recently sat down with Floor Covering News publisher, Steven Feldman, for an overarching interview about where Southwind is today and where he hopes it’s going.
What’s the best thing about Southwind?
The first thing I recognized when I got here was that we had an incredible culture. I didn’t know what to expect. I’ve worked for small companies, and I’ve worked for large companies, so you never know coming in what to expect as it pertains to the culture of an organization. I learned very quickly we have a lot of people here that are very loyal and believe in this company. The business started almost 30 years ago and we’re so fortunate that a lot of the original team members are still here because they believe in Southwind and this is their home.
What was the first challenge you encountered?
Southwind has long needed to refresh its product offering in both hard and soft surface. We were early adapters to the vinyl business; the only problem was we took our foot off the gas. With ownership and leadership changes we’ve basically had four years without many new products. We have made this a priority and will be launching products in many hard and soft surface categories at Surfaces 2024.
What have you identified as a significant opportunity?
We’ve never been in the single- or multi-family builder space. I’ve just brought somebody in to head that business for us, and we’ll start building a team around him. That’ll be a very different animal for us, with different products and different service models than what we’re accustomed to. Right now, we are talking to companies who are in this space and making sure we understand their requirements before we start.
You’ve been on the road meeting with retailers. What have they told you?
Retailers say they love doing business with us. It’s like the old Dalton feel. They know our customer service agents personally. If something needs to be rushed, it gets out. It feels like it was 30 years ago. But they have also told me our products are a little dated and need to be refreshed.
They’ve also told me they love our delivered freight model on palletized goods. I came from a culture where we had surcharges on freight, surcharges on fuel and had delivery fees. Southwind last year, at its own expense, didn’t have surcharges or multiple price increases. The beauty of delivered pricing on hard surfaces, and it’s been reinforced in my travels, is that it’s hard for retailers to price their floors when they don’t know about all these added charges. When the retailer buys from Southwind, if we say $2 a square foot, that’s our total price delivered to their store. They can price the floor accordingly and know what their margins will be. That’s a big deal.
And I’ve also learned their RSAs’ love our Windfall Rewards incentive program. We believe it’s the most lucrative RSA incentive program in the industry.
Based on this feedback we’re going to really hammer down on those things that are resonating with either the RSA or store owner that are truly different than what some others in our space are doing. And we’ll do the same in new products as well. When you see us in 2024, we’re going to try to do some things that are a little different and add value.
You did launch a new carpet line at Surfaces, correct?
We launched a new carpet program—six new styles. We are just really beginning to see the samples hit the street in mass and the feedback so far has been extremely positive.
What do you manufacture? What do you source?
Our sweet spot to manufacture is more of what I’d call middle-tier products. We’re also one of the few that’s still in the olefin berber business. As we move forward and evaluate make vs. buy, if there is value making the product we absolutely will. The reality is over the long haul, for us to remain competitive will require a significant manufacturing investment—which will be hard to justify in a market that continues to contract.
You mentioned Windfall Rewards. Is that for carpet or vinyl?
It’s for all Southwind products. It was launched in the middle of last year. It’s a point system with all kinds of travel awards, merchandise and gift cards. We believe it’s the most lucrative program in the industry for RSAs. Unlike a lot of competitive programs that are rewarded on the price of the product from the mill, our program is based on the price they charge their customer. It’s a different way of coming at it. In only a short amount of time we have 5,300 RSAs signed up and participating.
Have sales increased since you started that program?
Absolutely. We see a major difference in growth for those participating vs those that are not.
What do you think retailers don’t know about Southwind? What would you tell them that you don’t think they know?
I think there’s a lot they don’t know because we’re not one of the largest suppliers in the business, but what we want them to know is that they’ve got a friend in the business, they’ve got someone here that’s going to work with and for them, whether it’s our credit department, shipping department, order entry or salespeople in the field. We want to help them be successful.
Are you happy with the merchandising on the street?
Yes, we love the size or footprint but we are changing the visual and branding slightly. We’re modernizing it.
How many dealers does Southwind do business with? How many racks are on the street?
We have 4,400 active accounts and approximately 2,600 displaying dealers.
What does Drew Hash bring to Southwind? How are you going to make this company better?
We’ve all seen people who have come from outside our industry and land at companies without a deep love for our industry. This is not a transaction for me. Floor covering is my career. What I hope I bring to Southwind is real passion for customers. Nothing brings me more excitement than being with customers and listening to what they need to be successful. From their feedback how do we then develop those products, programs and systems.
Is your strength on the product side? Marketing?
Product has been my most recent responsibility but during my time at Armstrong I was responsible for sales and I was also fortunate to be responsible for Zickgraf Hardwood, which was a solid wood flooring manufacturer.
How does that expansive experience and knowledge translate into profitability for the retailer?
We must find ways to have our retailers make more money by purchasing from Southwind. Whether it’s delivered pricing, whether it’s unique products and programs, or the distribution of the product itself where they have an advantage in their market. Our daily focus must be waking up and supporting the independent flooring retailer.
Are you in laminate right now?
We are in the laminate business right now, but we are completely revamping it. In 2024 we’ll have a very competitive, well-styled offering. I’m really excited about what we are working on in laminate.
You’re the third-largest supplier of WPC, correct?
We love WPC. In fact, you’ll see in January a lot of new introductions in WPC.
Talk about your commitment to WPC.
Clearly, from a performance perspective, when you compare WPC to SPC, you have a product category that performs much better. Southwind was an early adapter in WPC. Unfortunately, as suppliers moved from China to avoid tariffs, due to the manufacturing process they first began to produce SPC. This made WPC less competitive. Now we have suppliers moving WPC from China making it much more competitive with SPC.
But when you talk about performance, when you talk about being softer underfoot, when you talk about warmer, when you talk about quieter, WPC is the superior product. In addition, flooring contractors would much rather install WPC because it’s so much more flexible.
As an industry we must be careful not to value-engineer rigid products to the point they don’t perform. Unfortunately, our industry likes to take really good products and value-engineer them to the point where they get a bad name. Carpet is a great example of this; builders forced manufacturers to value- engineer carpet to a point where it doesn’t meet most people’s expectations. We have all heard or seen a consumer buying their first house that has carpet throughout and after a year or so of living on it they need it replaced. Do you think they’re going to replace it with more carpet? Sadly, we’re starting to see some of that with SPC, where the first impression is not what we want for this product to continue to survive and thrive.
Have you been having a problem with your products being held up at the ports?
We have not been impacted. Our compliance team has had the opportunity—that others have not—to work with our vendors on making sure they have good traceability. To me, this is Lacey Act 2.0. The difference is how the government has implemented this. With Lacey we had clear timelines for compliance. This is a similar process but implemented very differently.
Let’s talk a little about your entrée into the wood business.
We will be launching our first style in January. It will be all engineered, initially starting with a 9/16-inch program, 3mm sawn face, white oak. We’ll crawl before we walk because we’ve got to get our sales team up to speed selling hardwood. It’s a much more technical sale versus click vinyl and carpet.
How many people do you have on the streets?
We have 53 territory managers and DVPs.
You mentioned your delivery program as a competitive advantage.
When containers got to $16,000 to $20,000 last year, a lot of folks introduced freight surcharges on palletized goods. There have always been industry fuel surcharges and then traditionally you have some type of delivery fee, $80 to $125. When Southwind prices palletized products, that’s the price. There are no additional line items on your invoice that says, “Fuel, freight, delivery.” That’s a big competitive advantage for us and something we’re going to really stress hard.
What’s on the horizon? What’s some of the goals and objectives for you guys?
We’re not trying to be the biggest by any means, but when people say Southwind, we want something to come to mind like, “These folks really care about my business. They really want me to be successful. They listen.” Ultimately, we want to be known for having innovative, well-styled products that are competitive and serviced on time. If we do all that, there’ll be a spot for us.
Do you have aspirations of getting into any of the buying groups?
We’re part of the Alliance Flooring Group today. And we’re a specialty vendor to the NFA. We want to participate where we bring the most value. And if it’s only a small part of a group, so be it.