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Getting better with age - Rfloorcovering news THE 30TH ANNIVERSARY ISSUE - Congoleum.com
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N E W S PA P E R

                   volume 31/number 3 I www.floorcoveringnews.net I the industry’s preferred publication I July 18/25, 2016 I $2.00

                             THE 30 TH ANNIVERSARY ISSUE

                    Getting
                   better
                   with age
Getting better with age - Rfloorcovering news THE 30TH ANNIVERSARY ISSUE - Congoleum.com
14 I July 18/25, 2016                                                                                                                                                                             fcnews

                   30 (x2) acquisitions & mergers
 YEAR COMPANY                     DIVISION                       ACQUISITION/MERGER
 1986   Burlington                Masland Carpet                 Formation of largest carpet mill with $651 million in annual sales.

 1987   Shaw Industries           West Point Pepperell           Began wave of purchasing activity; consolidated the industry; created first billion-dollar mill;
                                  carpet and rug division        gave Shaw Cabin Crafts and Stratton brands.

 1988   Beaulieu of America       Conquest Carpet Mills          Enabled company to get into the polypropylene business in a big way through downstream integration.
        Armstrong                 American Olean                 Expanded ceramic tile business.

 1989   Shaw Industries           Armstrong’s carpet division    Gained Evans & Black brand; added 5% market share, resulting in 20% stake in soft surface, 3 times the size of nearest competitor.

 1990   Beaulieu of America       Coronet Carpets                Largest acquisition in the carpet business to date; gave company Canadian presence.
        Domco                     Azrock                         Domco expanded distributor network in U.S.; Azrock increased international presence.
        Queen Carpet              Patcraft Mills                 Put mill squarely into the commercial market.

 1992   Shaw Industries           Salem Carpet Mills             Boosted Shaw’s domestic carpet share to approximately 31%.
        Congoleum                 Amtico                         Synergies via merger included joint promotion of both lines and sharing of showroom space.
        Royalty Carpet Mills      PacifiCrest Mills              Put Royalty in the design/specification market.

 1993   Mohawk                    Horizon Industries             Became eighth-largest mill with $630 million in sales.
        Mohawk                    Fieldcrest Cannon              Acquired Karastan and Bigelow brands; positioned company as second largest mill with sales of more than $830 million.
        Dixie Group               Carriage Industries            Acquired industry’s largest supplier to the manufactured housing business.
        Dixie Group               Masland Carpets                Added $50 million in sales; gave company foothold in higher-end residential business.
        Interface                 Prince Street, Bentley Mills   Enhanced leading position in commercial arena; diversified product mix.
        Mohawk                    Aladdin Mills                  Highest amount—$450 million—paid for carpet mill; merger gives Lorberbaum family 42% of Mohawk’s outstanding common stock

 1994   Domco                     Nafco                          $97 million purchase bolstered luxury vinyl tile portfolio.
        Queen Carpet              Tuftex                         Purchase of $14 million California mill boosted Queen’s annual sales to $565 million.
        Western FCA               AFA                            Formed World Floor Covering Association, brought Chris Davis into the industry.

 1995   Mohawk                    Galaxy Carpet Mills            $200 million purchase enhanced position at mid-level price points.
        Dal-Tile                  American Olean                 Merger brought together largest tile manufacturers in U.S., creating estimated capacity of nearly 450 million square feet.

 1996   Mohawk                    Diamond Rug & Carpet           $60 million transaction added lower-priced residential carpet to the mix.
        Tarkett                   Domco                          Merger created second-largest hard surface manufacturer in North America with $500 million in sales.

 1998   Mohawk                    World Carpets                  Acquisition of $430 million company put Mohawk at $2.5 billion in sales.
        Mohawk                    Image Industries               Put company in recycled polyester fiber business, turning plastic bottles into yarn used to manufacture carpet.
        Shaw Industries           Queen Carpet                   Added $800 million in sales and four brands to its portfolio: Queen, Tuftex, Patcraft and Designweave.
        Armstrong                 Triangle Pacific               Diversified Armstrong’s product portfolio; became No. 1 hardwood flooring producer, adding well-recognized Bruce brand.
        Armstrong                 DLW                            Regained position of world’s top resilient flooring producer with acquisition of German linoleum tile and sheet company.
        Beaulieu of America       Columbus Mills                 Added credibility to Beaulieu Commercial within the A&D community; eventually folded into Coronet.
        Beaulieu of America       Marglen Industries             Gave company entrée into the recycled polyester carpet business.
        Beaulieu of America       Peerless Carpet                Gave company a dominant position in the Canadian carpet market.
        Dixie Group               Multitex Corp.                 Globaltex division had major presence in the big boxes; added $85 million in sales.

 1999   Collins & Aikman          Monterey, Crossley             Combination of three carpet mills resulted in eventual formation of Tandus, one of the leading commercial manufacturers.

 2000   Hanley-Wood               Surfaces                       World Floor Covering Association secures its financial future via $40 million sale, plus 25-year annual annuity.
        Berkshire Hathaway        Shaw Industries                Allowed Shaw to focus on long-term goals rather than month-to-month.
        Beaulieu                  LDBrinkman                     Purchase of industry’s largest distributor put mill in the hard surface business.
        Dixie Group               Fabrica                        Enhanced position at the upper end of the market.
        Mohawk                    Durkan Patterned Carpets       Purchase of $110 million company put it squarely in the hospitality sector.
        Carpet Co-op of America   Flooring America               Company is renamed CCA Global Partners; became dominant retail group with roughly 2,000 stores under its umbrella.

 2001   Mohawk                    Dal-Tile                       Vaulted to the top spot among U.S. flooring manufacturers after $1.63 billion purchase.

 2003   Mohawk                    Lees Carpet                    Acquisition of $250 million commercial broadloom and tile mill broadened contract business.

 2005   Mohawk                    Unilin                         Company gains domestic manufacturing via new, state-of-the-art facility in North Carolina as well as licensing rights to
                                                                 Uniclic locking system and Quick•Step brand.
        Shaw Industries           Synthetic Industries           Purchase of backing manufacturer continued push to be 100% vertically integrated and having total control of its own products.
        Shaw Industries           Honeywell’s fiber division     Gained Anso and Zeftron brands; acquired 50% stake in Evergreen Nylon Recycling facility (eventually acquiring full ownership).

 2006   Mohawk                    Propex                         Purchase of secondary backing plant, coupled with 2005 purchase of Wayn-Tex, fulfills most product mix requirements.
        Tarkett                   Johnsonite                     Gained more commercial market leverage as well as access to Johnsonite’s extensive product portfolio, including rubber flooring.

 2007   Shaw Industries           Anderson Hardwood Floors       Positioned Shaw among top three hardwood suppliers, gaining a line with hallmarks of innovation, styling and quality.
        Mohawk                    Columbia                       Acquisition of key supplier, which included four plants, enabled company to manufacture wood rather than just market and sell it.

 2009   Mohawk                    Wear-Dated                     Gained one of top three consumer fiber brands, which carries 63% aided recall awareness among target audience.

 2011   DreamWeaver               Catalina                       Alliance combines brand recognition of Catalina’s Stainmaster products with value inherent in Dream Weaver’s PET.

 2012   Mannington                Amtico                         Acquisition expands Mannington’s global market reach as well as the scope of its domestic manufacturing capabilities.
        Tarkett                   Tandus                         Purchase puts Tarkett into the commercial carpet business in North America and Asia Pacific.
        Mohawk                    Pergo                          Largest flooring manufacturer adds most recognized laminate flooring brand in U.S. and Europe to its portfolio for $150 million.

 2013   Mohawk                    Marazzi                        $1.5 billion acquisition gives Mohawk total annual tile revenues of $2.75 billion, making it the world leader in the category.

 2014   Haines                    CMH Space                      Purchase gives flooring’s No. 1 distributor annual sales of more than $500 million.
        All Tile                  Carpet Cushion & Supplies      Acquisition vaults All-Tile to fourth-largest distributor with combined sales of $150 million; allows distributor to provide
                                                                 for below the floor.
        Dixie Group               Atlas                          Adds high-end manufacturer to commercial carpet portfolio that includes Masland Contract.

 2015   Mohawk                    IVC                            $1.9 billion purchase of fastest growing manufacturer of LVT in Europe positions Mohawk to meet rapidly growing U.S. market.
        Lexmark                   Northwest Carpets              Strengthens Lexmark’s position in the hospitality market.
Getting better with age - Rfloorcovering news THE 30TH ANNIVERSARY ISSUE - Congoleum.com
30 I July 18/25, 2016                                                                                                                                              fcnews

 January                                                                                                                                      the               stories
 Mannington Mills acquires
 Linwood Manufacturing
 Co., putting it into the
 hardwood flooring and
                                1986
 veneering product
 businesses. The new
 division will operate under
 the Mannington Wood
 Floors moniker.
                                February
                                Felt-backed vinyl flooring
                                and vinyl asbestos floor
                                                                  How Stainmaster became
   After Joe Maffett
   resigns as president of
   World Carpets, John
   Shaheen is named to
                                tile are among several
                                products that will be
                                affected by the EPA’s plan
                                                                  the industry’s No. 1 brand
                                to phase out asbestos.
   succeed him.                                                                                                                               rolling all across America on the
                                  Congoleum and Tarkett            By Tom McAndrews, former president, DuPont Flooring Division
                                  celebrate their                                                                                             same day in early September. As
                                                                         here is the story of            out the U.S. The group included      the trucks were cruising, a press
                                  100-year anniversaries.

                                                                  T      Stainmaster, a story that
                                                                         encompasses the vision,
                                                                  the energy and the courage that
                                                                                                         consultants with experience
                                                                                                         from P&G and BBDO. They had
                                                                                                         spent their year studying every
                                                                                                                                              conference in New York’s Pierre
                                                                                                                                              Hotel gave the flooring media a
                                                                                                                                              confidential preview, followed
 April                                                            propelled those who took mas-          facet of marketing, advertising,     days later by a similar presenta-
 Robert Van                                                       sive risks to make it more than a      promotion (both retail and           tion to all of America’s leading
 Buren is                                                         technical improvement in the           national) and quality assurance.     TV programs and networks
 named                                                            performance of carpet. It is the       They had studied many product        (“The Today Show,” “Good
 president and
 CEO of Azrock.
                                                                  story of how the name came to          features, most “feeding” off the     Morning America,” CNN, etc.)
                                                                  be—a $10,000 “blind” purchase                                               and America’s leading newspa-
   The first NWFA                                                 from a Philadelphia attorney; of                                            pers (New York Times, Wall Street
   convention attracts
   170 attendees.                                                 the men and women who saw                                                   Journal, AP, etc.) and magazines.
                                May                               the chance for a major market                                               The first TV commercial—the
                                Ralph Boe is named                breakthrough with, at the time, a                                           “Ricky Plane” commercial, pro-
                                president of Horizon              readily available chemical to be                                            duced by the “Pepsi Team” at
                                Industries succeeding
                                Peter Spirer,
                                                                  upgraded by DuPont’s labs; to                                               BBDO—aired during the second
                                who remains                       turn a short-term product advan-                                            inning of the American League
                                chairman                          tage into an enduring brand suc-                                            playoffs a week later. This his-
                                and CEO.                          cess. It is the story of researchers                                        toric commercial began a nation-
 June                                                             like Armand Zanato and Bob                                                  al advertising campaign, the size
 Tarkett unveils Lifetime
 Inlaid Flooring, billed as                                       Shellenbarger who, with a                                                   and intensity of which had never
 easier to install than                                           strategic planner on my staff—                                              been seen before in the flooring
 traditional inlaids, hitting                                     Chris Rielly—conceived the first                                            industry—or since.
 the market with a                                                sense of something                                                                             The $10-mil-
 lifetime wear and                                                that would be big-                                                                         lion budget was
 product defect warranty.
                                July                              ger than a product                                                                         quickly increased
   LDBrinkman, the              Burlington Industries             improvement, sig-                                                                          to $20 million as
   nation’s largest flooring    acquires 92% of Masland,          nificant as it was.                                                                        the      telephone
   distributor, sells its       forming the largest carpet
   carpet and floor                                                   In the early fall                                                                      lines at DuPont
                                mill with $651 million in         of 1985, Rielly                                                                            headquarters in
   products operation to        sales. Two months later,
   U.K.-based Crowther          Frank Greenberg
                                                                  brought Zanato to                                                                          Wilmington, Del.,
   for $57 million.             becomes chairman and              the flooring divi-                                                                         went into melt-
                                CEO of Burlington.                sion’s management                                                                          down. Thousands
                                                                  to present his                                                                             of calls were com-
                                                                  awareness of this                                                                          ing from across
                                                                  stain-resist discov-                                                                       the land asking
                                                                  ery for carpets—a                                                                          about DuPont’s
 September                                                        technology previ-                                                                          product break-
 General Felt Industries                                          ously used by the                                                                          through in carpet.
 purchases Color Tile,                                            apparel industry as a dye-resist       established Antron trade name.           Axtell, my chief lieutenant,
 which operates slightly
 under 700 floor covering                                         agent. Unbeknownst to both of          The marriage of the newfound         and my management team
 retail stores throughout                                         the researchers, Zanato and            stain resist and the finding of      consisting of Koepcke, Koch,
 the U.S.                                                         Shellenbarger, but known to            this group proved to be an explo-    McLaughlin, Stucklik, Carna-
                                                                  Rielly, was the existence of a         sive combination.                    vale, Baucom, DeMirjian, Culley,
   An NAFCD survey              October                           confidential six-man marketing             In November, 1985, I gave        Jones, Johnson and Smith assist-
   shows an increasing          The Tile Council of
   number of carpet mills       America launches a
                                                                  team headed by Bruce Koepcke,          the go-ahead to make the mar-        ed by the army of retail special-
   are bypassing                campaign to promote               under the direction of Bob             riage and instructed his team to     ists of TMG, were crisscrossing
   distributors                 American-made tile.               Axtell, that had been studying         proceed as rapidly as possible to    the United States with their
   for contract                                                   the various instruments and            commercialization. Exhaustive        “swizzle stick” POP promotion
   sales.                                                         methods of consumer advertis-          pre-market testing under the         displays and their bundles of co-
                                November                          ing that could stimulate demand        strictest secrecy covenants with     op advertising funds to further
                                Fieldcrest Cannon,                for DuPont’s carpet products; a        four leading carpet mills was ini-   fuel the marketing blitz.
                                parent company of                 project that had a pre-authorized      tiated. These covert mill tests          Within weeks, sales to car-
                                Karastan, agrees to               budget of $10 million if the right     led, six months later, to a          pet mill customers were expo-
                                acquire Bigelow-Sanford.          combination of product and             moment of decision.                  nentially exceeding all forecasts,
                                 General Electric                 opportunity could be found.                The decision was “go!” Eight     and in a truly startling effort,
 December                        sells Coronet
 Monsanto launches Wear-                                              In a truly secret undertaking      more mills were added in the         DuPont’s manufacturing organi-
                                 Industries to CI
 Dated Gold Label stain-         Holdings, headed by
                                                                  that had only six members of my        summer of 1986 based on              zation began building multi-
 resistant carpet.               former World Carpets             senior management fully in the         DuPont’s fiber capacity and          million-dollar        expansions,
   Armstrong enters the          president Joe Maffett.           know, the stain-resist technolo-       anticipated demand. An intricate     working 24/7, breaking all
   ceramic business via the                                       gy was married to the findings of      but massive rollout plan was         records of similar construction
                                Mannington’s new Allusions is
   acquisition of                                                 this covert marketing group,           orchestrated so thousands of         to serve this new demand.
                                billed as offering “dimensional
   Summitville Tiles.
                                layering” designed to create      which had conducted year-long          trucks carrying rolls of the new         The most senior manage-
 FCICA offe
         offers a beginners’    luster and depth.                 consumer test studies through-         certified product would be                        Continued on page 91
 installation school.
Getting better with age - Rfloorcovering news THE 30TH ANNIVERSARY ISSUE - Congoleum.com
32 I July 18/25, 2016                                                                                                                                                  fcnews

                                                                                                                                                the                 stories
                                1987
                                February
                                3M introduces Scotchgard
                                Stain Release, a system
                                the company claims is the
                                first in the industry to
 March                          offer combined
 Abbey Carpet announces         soil and stain
 plans to open 200-plus         protection for
 franchised floor covering      carpet.
 showrooms within the
 stores of national
 department store chain
 Montgomery Ward. The           April
 company says it is the         The latest hardwood
 first time independent         trends, according
 carpet dealers can             to the NWFA, are lighter
 establish shops within         finishes and more
 this type of national chain.   narrow widths.

                                May
                                Tarkett launches its 12-
                                foot-wide Lifetime Inlaid
                                flooring system to
                                minimize seams.                                     The mills that Shaw Industries gradually acquired over time made
                                  Dave Cicchinelli                                  sense from a strategic standpoint. The purchases not only increased
                                  is named                                          the company’s market share, but also added new capabilities.
                                  president of
                                  Carpetland USA.
                                Dean McKinney is tapped to
                                lead Flex, the industry’s first
                                          consumer credit
                                                                  Pepperell purchase was the
                                           program.

 July
 Collins & Aikman pegs
                                                                  shot heard around the world
 Charles Eitel as
                                                                                               By Bob Shaw, chairman and CEO, Engineered Floors
 president of its floor
 covering division.
                                                                      f you go back to 1987 [when I                                             any significant degree. We had a

                                                                  I   was president and CEO of
                                                                      Shaw Industries], we basically
                                                                  had a lot of risk capitalists raiding
                                                                                                                                                bunch of mills doing between
                                                                                                                                                $100 million and $300 million.
                                                                                                                                                     Ultimately, aside from
                                                                  the textile mills because they had                                            increasing market share, we were
                                                                  large sums of money in their trust                                            looking for consolidation of a
                                                                  department. Pepperell was under                                               mature industry. As much as we
                                                                  siege and had to raise cash. It was                                           wanted to consolidate, DuPont
                                                                  consolidating back into the textile                                           wanted to keep it separated. And
                                                                  business and the WestPoint (car-                                              only when you get large enough
                                October                           pet) division was something it                                                can you backward integrate into
                                PermaGrain offers the             could sell because it was not core                                            the yarn business and extrude
                                industry’s first acrylic-         to its business.                                    Bob Shaw                  your own fiber. We needed to do
                                impregnated product,
                                Tupelo Wood Plank, said
                                                                       Cabin Crafts was our target; it                                          that to compete with the Allieds,
                                to combine color                  had a good name. That basically         to get the growth patterns Wall       Monsantos and DuPonts.
                                consistency with                  moved Shaw Industries into the          Street demands.                            If you asked me 30 years ago
 November                       performance.                      upper end of the carpet industry.           I knew very simply there could    where consolidation would end
 David Hartman is named          Swedish                          Up until that time, Shaw had just       only be two types of companies:       and how many major mills there
 vice president of               company Kährs                    been a low-cost commodity pro-          those that would be acquiring and     would be today, I would have told
 marketing for                   sets up shop in
 Mannington’s                                                     ducer.                                  those that would be acquired. And     you there would be a leader, a
                                 California with
 resilient                                                             Throughout all the acquisi-        there was no chance Shaw              strong second, a weaker third and
                                 Ulf Kähr as president.
 division.                                                        tions we made, we never                 Industries would ever be acquired.    a bunch of also-rans. All you have
                                                                  approached          mills;       they   We believed we were the low-cost      to do is look at the automotive
                                December                          approached us. The following year       producer, and in a commodities        industry. Before the Japanese
                                The Retail Floorcovering
                                Institute changes
                                                                  Armstrong came to us with Evans         business the low-cost producer is     came in, you had General Motors,
                                its name to the                   & Black. Armstrong had the              always the winner. And no matter      you had Ford as the strong com-
                                American                          asbestos problems and was look-         what we advertise, we are in a        petitor and Chrysler was the dis-
                                Floorcovering Association.        ing to spin off all it could beyond     commodities business.                 tant third. And No. 1 makes three
                                 Dennis Draeger is                its core business. Like Pepperell, it       The consolidation continued       times as much money as No. 2 and
                                 Armstrong’s new group            was consolidating back into its         for a few reasons. First, by making   No. 3 combined, and that was
                                 vice president of resilient.     core business.                          acquisitions you advertise you are    about the case in the carpet indus-
                                New divisional vice                    The reality is there is nothing    in the market for more acquisi-       try. We were always the low-cost
                                presidents of sales and           unique about our industry. As           tions. And you have to be able to     producer and had done more
                                marketing at Shaw: Randy          any industry matures, as it gets        afford it. We were the only public    backward integrating. We bought
                                Merritt for Philadelphia          closer to the GNP, there will           company, so we had access to pub-     Honeywell and extrusion from
                                Carpets and Don Whitfield         always be consolidation, and it’s       lic money that others did not.        Beaulieu. The more backward
                                for Cabin Crafts.
                                                                  always the stronger buying the          Second, there were too many bor-      integrating you do, the more
                                 Congoleum takes the              weaker. And a fast-growing, pub-        derline successful carpet mills—      added value you generate. The
                                 wraps off Triumph, which         lic company must get into acqui-        those having value, but not gener-    more added value, the greater
                                 features a high-gloss
                                                                  sitions as well as grow internally      ating enough money to grow to         capability of controlling the profit.
                                 urethane finish.
Getting better with age - Rfloorcovering news THE 30TH ANNIVERSARY ISSUE - Congoleum.com
34 I July 18/25, 2016                                                                                                                                          fcnews

 January                                                                                                                               the                 stories
 Frederick Berman,
 chairman of Benj.
 Berman, passes away
 at age 78.
                              1988
                              February
                              Dorsett Carpet Mills
                              becomes the first
                                                            Horizon Industries, like the mythical
                              American carpet
                              manufacturer to extrude
                              its own BCF nylon.
                                                            phoenix, literally rose from the ashes
                               Roger Hunt is named
 March                         executive director                  By Peter Spirer, CEO of MaxWoods                  when heated, dispersed water and extinguished
 Jim Trawick is                of the Flex                                                                           the flames. Both developments came within a year
 the new president of                                               ack in 1972, a company rose from a disaster      of TCA’s misfortune.

                                                            B
                               consumer
 Domco’s U.S. division.        credit program.                      to become a storybook success.                        Forced to discontinue shipping failing carpet
                              Dorsett Carpet                             Horizon Industries was named for the        tiles, TCA sold its tile cutting equipment to a
                              mills becomes the             uncanny ability to look way beyond where you can         startup venture in the commercial sector called
                              first American carpet         see, to find a place of wonder called the horizon.       Interface. We changed TCA’s name as well. The
                              manufacturer to               Originally, the company was TCA, Tile Company of         only things remaining were our building and a
                              develop and extrude its
                              own BCF nylon, the
                                                            America. Within three years it had become an ash         large tax loss to carry forward. The newly named
                              company claims.               heap of failed dreams. This little enterprise made       company, Horizon Industries, was based on an
                                                            the first carpet tiles in the U.S., 12 x 12 nylon shag   indeterminate future but a very real philosophy.
                              May                           squares with attached foam rubber cushion.               In a word, this philosophy was “dare.”
                              Odyssey acquires J.P.         Merchandised as Carpet                                                                   As the smallest of the
                              Stevens carpet group.         in a Carton, every                                                                  more than 300 carpet
                               Don Finkell is appointed     Sears, Montgomery Wards                                                             mills of the time (1972),
                               president of Anderson        and JC Penney store in                                                              Horizon needed to be
                               Hardwood Floors.             America sold them. For a                                                            noticed. Barwick Carpets,
                              World Carpets appoints        year or two TCA squares                                                             then the industry’s largest
 June                         Bill Waters vice              were a retail sensation.                                                            manufacturer, had just
 Congoleum launches           president of marketing             And then the bottom                                                            introduced cut and loop
 Marathon, its first heavy    for all divisions.            fell out.                                                                           technology, made with
 duty inlaid sheet,
 marking its entrance                                            The Federal Trade                                                              newly designed electron-
 into the commercial                                        Commission (FTC) decid-                                                             ic scroll pattern tufting
 sheet goods market.                                        ed to check the compli-                                                             machines. Desperate for
                                                            ance of the carpet indus-                                                           success, we decided to
                                                            try with recently enacted                                                           roll the dice and buy one
                                                            regulations passed by                                                               of these machines. We
                                                            Congress, requiring all                                                             felt sure that the beautiful
                              August                        home textiles to pass                                                               cut and loop designs
                              Carpet One introduces a       the Textile Flammability                                                            would stand out among
                              national real estate
                              program, a sales              Act. Lawyers from the                                                               the pedestrian, base-
                              training plan and its own     FTC’s Compliance section                                                            grade cut piles, level loop
                              credit card.                  descended on north                                                                  tweeds, polyester “splush-
                                                            Georgia carpet mills, pick-                                                         es” and shags. After all the
                                                            ing up samples and testing                                                          turmoil with TCA we
                               Monterrey Carpets is
                               purchased by Larry Jones
                                                            them to see if they passed the methenamine pill          opted to roll the dice to regain lost time.
                               and Kevin Allen.             test, the standard established for determining the            In hindsight, our act of desperation was the
                                                            burn spread of a high energy ignitor (the pill) on       perfect stroke. We needed a major breakthrough
                              Armstrong announces plans
                              to purchase all outstanding
                                                            home textiles, including carpet. Few, if any, did.       and we got it. Beau Rivage, Horizon’s first product
                              shares of American Olean      The industry was in deep doodoo.                         introduction, was a big hit. With the bravado
                              capital stock from National        Lacking the technology to slow the spread or        springing from success, we followed up with
 October                      Gypsum.                       extinguish the burning pill, the carpet industry         Mystique, Sabra, Le Plaid, Le Mans and
 Stanton Carpets                                            was a sitting duck, and failures were found from         American Folkweave. The more daring our
 acquires Carpet
 Distributors of America.                                   the largest manufacturers to the smallest. TCA,          designing became, the faster the business grew.
                                                            being in the latter category and easily identified       As it turned out, consumers were starved for
   Changes at LDBrinkman:
          Jeff Sills is
                                                            by its red, white and blue boxes in every chain          innovation. When they discovered it they
           named senior                                     store in every state, was the company the FTC            responded enthusiastically. We even made a
           vice president                                   deemed easiest to prosecute and least able to            remarkable pattern (which didn’t sell) based
           of sales and                                     defend itself. Within a year or so following its         on the hippy era LOVE design. Then we intro-
           marketing; Mike                                  march through Georgia, the FTC lawyers forced            duced the industry’s first line of printed animal
         Klingele is                                        us to recall 15 months of production. When the           skin patterns, a blockbuster called Safari.
   appointed president of
   the West Coast division.                                 goods was returned, it was sent to the Dalton                 We had our failures. Sampling a product with
                              December                      dump to be destroyed by burning. Thus, did TCA           little or no financial recovery is risky business. We
 The Chicago Merchandise      DuPont signs a letter of      perish in the flames.                                    learned to manage risk by seeking the opinions
 Mart cancels its retail      intent to purchase                 Note: TCA’s legal defense had to be abandoned       of dealers before launching, and then sampling
 residential market for       Hercules’ olefin carpet
 January, citing a shift in   fiber business. The move
                                                            when it became financially unable to continue the        only a small percentage of our customers to test
 focus to designer/           will more than double         fight. Two prodigious events followed: The               reaction before going full blast.
 specifier.                   DuPont’s olefin fiber         large companies whose carpets failed to pass the              By 1980 we had passed Barwick in size and
                              capacity.                     “pill test” banded together and sued the FTC, using      were among the top 10 carpet mills. In 1983 we
                               Milliken improves its        TCA’s exact claim, namely that Congress had not          went public, and in 1992 we became
                               successful Capture           given the Federal Trade Commission the authority         Mohawk’s first acquisition. Our high-risk philoso-
                               dry carpet cleaner.          to recall. TCA’s lawyer, Dick Gimer, was retained        phy hadn’t changed, but we did manage to slip in
                                                            by these major mills to press the case. He won,          some commodity products to pay the light bill.
                                                            hands down. Secondly, latex chemists developed a              Moral of the story: Follow your instincts
                                                            sure cure for extinguishing the methenamine pill,        unless (or until) they lead you up a blind alley.
                                                            a chemical known as aluminum trihydrate, which,          Then, throw the Hail Mary pass.
Getting better with age - Rfloorcovering news THE 30TH ANNIVERSARY ISSUE - Congoleum.com
42 I July 18/25, 2016                                                                                                                                       fcnews

 January                                                                                                                             the                stories
 Bob Van Buren is named
 president and CEO of
 Azrock while continuing
 in his role as
                             1992
 president
 and CEO
 of Domco.
                             February
                             American carpet mills
                             have been ordered by the
                                                           How Carpet One blossomed
                             Canadian Department of
                             National Revenue’s
                             customs and excise branch
                                                           into the premier retail group
                             to pay anti-dumping duties
                             between 5.3% and 5.5% on            By Steven Feldman               together and have some prod-        in, and they all said yes.”
 March                       all product sold into                                               ucts together.”                         The premise presented to
 More than 2,500 retail-     Canada.
 ers, contractors and
                                                           (Reprinted from the Carpet One            It was a different time back    these 11 retailers was relatively
 designers attend Expo        Shaw’s purchase of           25th anniversary issue, published     then. “Home centers were just       simple. Running a successful
 East ’92, an industry        Salem Carpet Mills will      by FCNews in 2009.)                   becoming a factor. The industry     carpet store was likened to an
 tradeshow put on by          push the company over                                              was fragmented. There were          equilateral triangle with the
 Floor Covering News at       the $1 billion mark in
                                                                  he vision was to build a co-   400 mills. At the time $200 mil-    three sides consisting of buying,
 the Meadowlands
 Convention Center
 in New Jersey.
                              annual sales and give it
                              a market share of
                              approximately 31%.           T      operative where floor cov-
                                                                  ering retailers could
                                                           achieve the same market advan-
                                                                                                 lion was a huge mill. The mar-
                                                                                                 ket share of the largest mill was
                                                                                                 just 2%. So I think we saw an
                                                                                                                                     management and marketing. On
                                                                                                                                     the marketing side was direct
                                                                                                                                     mail, television, radio and print.
                                                           tages as the national chains. The     opportunity.”                       Under buying was purchasing
                                                           mission was to formu-                                                               more competitively
                                                           late a plan that would                                                              and private labeling.
                                                           combine        marketing                                                            Management centered
                             May                           with buying power and                                                               on all facets of training.
                             BASF files for a patent       management tools. The                                                                   “From day one, we
                             that will allow it to         result was Carpet One.                                                              believed strongly that if
                             recycle carpet made with
                             nylon 6 by depolymerizing
                                                               It was 1984 when                                                                we only focused on
                             the fiber into reusable       Howard Brodsky and                                                                  buying we weren’t
                             caprolactam, its              Alan Greenberg, friends                                                             going to help anybody,”
                             original monomer.             from their days as influ-                                                           Brodsky said. “If all we
                                                           ential members of the                                                               did was management,
                                                           Retail Floorcovering                                                                then we couldn’t get
                                                           Institute (RFI), began                                                              the margins we want-
                                                           thinking about what                                                                 ed. We knew we had to
                                                           would formally be                                                                   leverage all three—
 July                                                      launched as Carpet Co-                                                              including marketing—
 Carpet One starts Carpet                                  op of America. Their                                                                together. All three had
 One University, a                                         target was aggressive at                                                            to be working together
 comprehensive training                                    the outset but rather modest in           Brodsky and Greenberg           simultaneously.”

                                                                                                           ‘
 program that tours the
                                                           hindsight: 330 retailers. Not in      began to do their homework.
 country in an effort to
        educate and                                        their wildest dreams could they       First, they met with each other     The early days
        motivate                                           have ever imagined a meeting          and started listing things that     Sandy Mishkin, the only presi-
        salespeople.         August                        with 11 other retailers in            would be part of the concept.       dent Carpet One has ever known
                             Mohawk purchases Horizon      January 2005 spawning inar-           Next, they looked at other          and one of the industry’s greatest

                                                                                                                                                           ’
   Fabrica starts listing    Industries for $86.5          guably the most powerful retail       organizations that had some         negotiators, was a key compo-
   square-foot prices next   million. With combined        flooring entity, a group that col-    similarities.                       nent from the start, convincing
   to square-yard prices     sales of approximately
                             $630 million, Mohawk          lectively sells more than $4 bil-         Then they started talking to    the mills to sign on. It wasn’t
   in an effort to end
   consumer confusion        becomes the industry’s        lion annually.                        experts from other industries       easy. Many of the mills did not
   about price and           second largest carpet mill.       The story is one for the          like Larry Zehfuss, CEO of the      see a group of dealers getting
   quantity needed.           The industry debates the     Harvard          Business
                              merits of fiber companies’   School: How to build a
                              strategy of selling what
                              would normally be
                                                           successful co-op. The                                   At the time $200 million was a
                                                           story is also an unlikely
 October
                              branded fibers to mills as
                                                           one. Greenberg had left                                 huge mill. The market share of
                              unbranded goods.
 DuPont’s Partnership for                                  his family business, Tile                              the largest mill was just 2%. So I
 Carpet Reclamation is                                     Town, to launch Sun
 launched. This network of                                 Carpet in St. Louis.                                     think we saw an opportunity.
 companies will work                                       Brodsky’s Dean’s Carpet
 together to collect and                                                                                                                       —Howard Brodsky
 distribute post-consumer                                  in Manchester, N.H.,                                           Co-founder, chairman and co-CEO, Carpet One
 carpet products.                                          was the typical All-
   Lees Carpets launches                                   American dealer. But together,        ServiStar hardware co-op. “We       together as positive for them. So
   Lees for Life, which      November                      they were as good as it               spent an afternoon in Butler,       Carpet One did what anyone
   features a patented       The industry blasts the       gets. “Alan and I built a great       Pa., trying to understand the       would do—it phoned a
   process that allows       CBS Network after fea-        friendship,” Brodsky told             idea of a co-op. We came away       friend. “The original mills were
   products to resist        turing a segment con-         FCNews. “We were both presi-          with the feeling that this would    personal, close friends, and
   stains for the life of    cerning
   the carpet.                                             dents of RFI. Then we were co-        be a great concept for us.”         that’s who sold us,” Brodsky said.
                             the effects of carpet
                             and IAQ, stemmed from         chairs of the Billion Dollar              From there Brodsky and          “Doug Foster of Salem and Don
 December                    Anderson Labs reports         Carpet Sale. That was the first       Greenberg started to formalize      Mercer of Mohawk were the
 Congoleum and Amtico        that have been denounced      event we did together, and we         the business plan. “We put our      early supporters. We wanted to
 merge with Roger Marcus     by the industry and other     knew a lot of dealers around the      concept together and invited 11     get some private-label lines and
 named president and CEO.    experts.                      country. After that was success-      people to Atlanta, friends we       a better discount than what was
   The flooring industry’s     Hoechst unveils Trevira     ful, we started strategizing:         knew from different parts of the    being offered to the market. We
   Hall of Fame is             One, an all-polyester       What would happen if we got a         country, and all we had was a       were able to get a pretty wide-
   announced with              carpet system that is
                               completely recyclable.      group that would buy together,        flip chart of the concept. We       ranging collection that we
   11 people named as                                      market together, advertise            asked them if they wanted to be     branded Carpet One.”
   inaugural members.
Getting better with age - Rfloorcovering news THE 30TH ANNIVERSARY ISSUE - Congoleum.com
44 I July 18/25, 2016                                                                                                                                     fcnews

 January                                                                                                                         the                  stories
 The 65-store chain
 Carpeteria is expanding
 its Western regional
 presence by opening
                                1993
 stores in Arizona,
 Colorado and Texas.

                                                               How Tarkett took aim at Circle A
                                                                       GOAL WAS TO PROVE ITSELF AS AN ALTERNATIVE TO ARMSTRONG
                                March                                            THROUGH PRODUCT DEVELOPMENT AND MARKETING
                                Mohawk purchases
                                American Rug Craftsmen
                                for $20 million.                                                                                  like I did. I got a lot of hell, but I
                                                                         By Ingvar Backhamre, former CEO, Tarkett Inc.
                                  A storm that dumps                                                                              learned from it.
                                  24 inches of snow causes         t was 1981 when I left            that there was no one in the     We developed products
 April
 DuPont introduces three
 branded fibers—
                                  the roofs of more than
                                  50 carpet mills within a
                                  30-mile radius of Dalton
                                  to collapse. Most mills
                                                               I   Sweden, the country I called
                                                                   home throughout my entire
                                                               life, to become CEO of North
                                                                                                     industry who had read any of
                                                                                                     these studies. But we knew
                                                                                                     about it. We followed all the
                                                                                                                                  where we could prove they were
                                                                                                                                  better than Armstrong’s. That’s
                                                                                                                                  because we could never follow
 Stainmaster Plus,                are back to full operation   American operations for the                                        Armstrong in their strategy.
                                                                                                     studies about asbestos. I felt we
 MasterLife and Grand             10 days                      newly formed Tarkett, Inc.            could not continue to produceThey spent tons of money in
 Luxura—that will be used         after the                         Tarkett had just acquired        with asbestos when workers onconsumer advertising. If we
 by only 18 mills. The            storm hit.
                                                               GAF’s worldwide flooring busi-                                     tried to copy them it would have
                                                                                                     the floor could get sick. So this
 company also announced                                        ness for $56.6 million because        decision was the right thing been suicide for our company.
 the formation of the
 DuPont MasterStore                                            we needed a distribution net-                                      We did, however, do enough
                                                                                                     from both a strategy and moral
 concept with the ultimate      May                            work in the U.S. The company          point of view.               consumer advertising to keep
 goal of having between         Tarkett goes head-to-head      was so badly managed in both              Without any question, ourthe distributors somewhat
 2,000 and 3,000 locations.     with Armstrong’s Corlon        the U.S. and Europe, and we           best product development was happy.
                                line. Ingvar Backhamre,
                                Tarkett’s president and
                                                               were the only company in the          non-asbestos. Carl Sempier (the  Instead, we chose to spend
                                CEO, debuts a gun-slinging     world willing to purchase both        former CEO of Mannington)    our money in trade advertising.
                                cowboy outfit in making        businesses. They could not sell       said to me at one point, “YouWe had more trade advertising
 June                           the announcement.              their European business; we                                        than Armstrong, Mannington or
                                                                                                     saved the entire industry from
 Mohawk signs an                                               were the only one willing to take                                  Congoleum. It was through
                                                                                                     complete disaster.” If I did not
 agreement for
 $140 million with                                             it on because we knew how to                                       trade advertising where we chal-
                                                                                                     take action in the asbestos area,
 Fieldcrest Cannon to                                          correct it.                                                        lenged Armstrong.
                                                                                                     things would have continued as
 purchase its Karastan                                              Their strategy in the U.S. was   they were for another five to    We were specific. We chal-
 Bigelow carpet unit.           July                           a complete disaster. They had no                                   lenged them one area at a time.
                                                                                                     eight years. I can’t imagine how
 Karastan’s $236 million                                       unique products. The profes-          much more damage would have  The only way to do it right is to
                                Kentile Floors will no
 in annual sales will
                                longer produce residential     sionally installed segment was        been done. As of September   have credible, independent, fair
 push Mohawk ahead of
                                resilient flooring.            the most important business.          1981, we did not produce withtesting. No Mickey Mouse test-
 Beaulieu into the
 No. 2 spot among carpet                                       But it was not a priority for GAF.    asbestos.                    ing. And after that you must
 mills with $835 million.                                      They did not spend on product             Then I studied Armstrong.keep referring to those tests.
                                August
                                Shaw continues its
                                                               development and had no mar-           How does a disaster company      What Armstrong didn’t
                                expansion in the U.K., by      keting strategy. They could not       like GAF compete? Armstrong
                                purchasing Abingdon            develop a marketing strategy          was great in many areas,
                                Carpets. Combined with         because they didn’t have the          but I particularly
                                its recent acquisition of      products. What they would do is       applaud their mar-
                                Kosset Carpets, Shaw is
                                                               give distributors a 3% discount.      keting strategy.
 September                      considered to be the
 George Lorch is elected        largest seller of carpet in    That is a stupid strategy.            One weakness:
 president and CEO of           the U.K.                            When I took over, I had to       They had not
 Armstrong World                 Mannington changes at         change everything. The first          developed enough
 Industries, replacing           the top: Scott Smith,         thing I did was analyze our com-      new products in the
 William Adams, who              chairman and CEO, has         petitors. At the time, Armstrong      last seven years. So we
 remains chairman.               resigned after 18 years       was by far the largest manufac-       put a lot of resources
                                 with the company. Tony        turer of vinyl in North               into product
 October                         Kelly, COO, will assume
                                 Smith’s CEO duties.           America—and the world—and             development.
 The EPA is unable to                                          we were the largest in Europe         We took our Ingvar Backhamne
 independently replicate the     Meanwhile, Keith
 finding of Anderson             Campbell has been             and second largest in the world.      best man from president & CEO,
 Laboratories concerning         named executive vice          As such, we had no interest in        E u r o p e , Tarkett, Inc.
 carpet emitting toxic fumes.    president and Ed Duncan       positioning ourselves against         brought him
                                 senior vice president of
   Shaw’s much anticipated       marketing.                    Mannington or Congoleum. We           over and invest-
   TrustMark retail                                            wanted to position ourselves as       ed in product development.
   program hits the street                                     the alternative to Armstrong, a       I had meetings every other
   with an initial offering     November                       very fine company that I have         week in Whitehall. I guided
   of 150 residential styles.   Ed Weaver, chairman and        always respected.                     the team product by prod-
   The mill sets a goal of      CEO of Diamond Rug &
   2,500 U.S. retailers to                                          My only way of accomplish-       uct, and what I expected
                                Carpet Mills, dies of a
   buy into the full-           heart attack at age 48.        ing that goal was to generate         them to develop. If you
   disclosure program.                                         some good attention. Everyone         challenge people they will
                                 Charles Eitel is new CEO
                                                               was neglecting us. GAF had no         respond.
                                 of Interface.
 December                                                      power. Everything they were               I traveled more than my
 Mohawk’s purchase of                                          selling was on discount. So the       competitors. I knew where we
 Aladdin Mills for $386.5                                      first area where I really made        were weak and where we were
 million sets an industry
 record as the highest
                                                               noise was with asbestos.              strong. Customers will tell you,
 amount paid for a mill                                             The interesting thing is sev-    and I wanted to know. I visited
 acquisition. The purchase                                     eral analyses in the market about     retailers who we had business
 will push Mohawk’s                                            asbestos were all from the U.S. I     with and those who we did not.
 annual sales to more than                                     had a problem understanding           No one traveled in the market
 $1.3 billion.
Getting better with age - Rfloorcovering news THE 30TH ANNIVERSARY ISSUE - Congoleum.com
fcnews                                                                                                                                                           July 18/25, 2016 I 45

know was that I                                                                                                                                                     re-hired the mar-
knew American law                                                                                                                                                   keting director I
as well as my com-                                                                                                                                                  had fired. He was
petitors. They said                                                                                                                                                 bluffed into giving
we will take you to                                                                                                                                                 a proposal to that
court. I said you                                                                                                                                                   major distributor.
could do that, but if                                                                                                                                               That distributor
you want to get rid of                                                                                                                                              went back to his
my ads, the best way                                                                                                                                                current vendor.
is to convince me I’m                                                                                                                                               Word leaked out
wrong. Then I will                                                                                                                                                  and distributors
drop my ads and                                                                                                                                                     lost confidence
apologize. If you                                                                                                                                                   and didn’t want to
can’t do that then it is                                                                                                                                            invest.
none of your busi-                                                                                                                                                      The        most
ness. Then I would                                                                                                                                                  important things
ask if they had in-                                                                                                                                                 about being a man-
house lawyers. I told                                                                                                                                               ufacturer are R&D
them          in-house                                                                                                                                              and marketing. If
lawyers are not the best in the        Armstrong product after prod-         focus on marketing. Stupid. And     up with Tarkett. My first            you don’t have the products, and
marketplace. I had Rudy                uct, the press asked if I was will-   when it comes to distribution, if   thought was are they serious or      you can’t copy the market leader
Guiliani as my lawyer. This was        ing to meet Armstrong. Where?         you lose a distributor you can-     are they going to go back to         because of economies of sale,
before he became mayor of New          I suggested the O.K. Corral           not wait one year to appoint        their present vendor and press       you must be better in some key
York. He is a wonderful man.           because that is the best-known        another. What happens with a        them for concessions. So I was       areas. For us, eliminating
Rudy and I speak the same lan-         Western. Life is too short. That      dealer base? They go to some-       dragging my feet. Eventually I       asbestos was critical.
guage. So the very last meeting I      Clint Eastwood ad may have            one else.                           said, “I cannot legally terminate        I moved back to Sweden in
had with them they offered me a        been a little provocative, but it         Another issue I remember:       five distributors in your area       2013 after 32 years in the U.S. We
compromise. I turned this down.        was just another way to have a        There was a big distributor in      and give the line to you.” He said   stayed much longer than I had
     Armstrong is a very fine com-     little fun.                           the U.S. who handled vinyl for a    he was still interested. Then I      planned. I love the United States,
pany. They would not have been                                               competitor. He came to me and       knew he was just playing us.         but it is nice to be home again
the biggest in the world if they       Passing the torch                     said they were thinking of lining       When I left Tarkett they had     with old friends and family.
were not very good in many                 I retired from Tarkett in
areas. In my ads I never said they     1997, and the company has
were bad. I just said in some          struggled to achieve the level of
areas we were better. For us to be     success we enjoyed in the 16
trusted by the retailers, we need-     years I served as CEO. I am
ed to prove we had several prod-       often asked why. I would say I
ucts better than Armstrong’s. We       was very independent within
got so many more retailers             Tarkett. I was not only CEO for
because of those ads.                  Tarkett Inc., but I was executive
     Everyone thought we were          vice president for the whole
going after Armstrong. That was        group for more than 10 years. If
not true. We were just out to          you take the market strategy in
position ourselves as an alterna-      U.S., I did it by myself. We went
tive to Armstrong. You must            from a losing company in North
have a very simple message for         America to become the most
the market. So we never tried to       important company profit-wise
badmouth them. We never tried          within Tarkett worldwide.
to say they had bad products. We           I did it very differently than
just tried to say in some areas we     Europe. Their consumer busi-
were better. We had no hard            ness in Europe was not good.
feelings toward Armstrong. They        They were selling vinyl as a
were the best in the industry.         commodity business based on
     One of those products was         thickness. My boss came over
Lifetime Inlaid Flooring, which        from Europe and asked me
we positioned against their suc-       about the thickness of some
cessful Solarian line. It was a dif-   products. I said it was irrelevant.
ferent kind of inlaid, and it was      He was mad at me. Everyone
12 feet wide where we eliminat-        talked about thickness. It was
ed most seams. If there was one        stupidity.
problem with Solarian it was               The management from
seams. Our product was also bet-       Europe after me messed things
ter in wear tests. It beat Solarian    up. Do you think they wanted to
by far.                                ask for advice from the previous
     People also remember the          boss? They didn’t understand
trade ad I once ran with me            how it works in America.
wearing a black cowboy outfit          Everyone here got it right:
holding a couple of guns where I       Armstrong,          Mannington,
challenged Armstrong to “make          Congoleum, us. We stressed it
my day.” You know, we must             even more with our product
have some fun, too. I found the        development. Europe focused
flooring business boring. They         on construction. It was like hav-
were no fun. When I challenged         ing an engineer come in to
Getting better with age - Rfloorcovering news THE 30TH ANNIVERSARY ISSUE - Congoleum.com
46 I July 18/25, 2016                                                                                                                                         fcnews

                                                                                                                                         the               stories
                              1994
                              February
                              An estimated 29,000 people
                              turn out for Surfaces ’94,
                              officially marking it as the
                              industry’s national show.
                               A new “floating floor”
                               lands in U.S. Italy’s
                               Abet Laminati debuts a
                               high-pressure
                               decorative laminate to
                               the U.S. builder market.
 April
 Domco buys National
 Flooring Products Co.
 (NAFCO) to bolster its
 residential tile business.

                              May
                              Color Tile, the nation’s
                              largest specialty retailer,
                              has added carpet to its
                              product mix as soft
                              surface sales are greatly
 June                         outpacing the rest of the
 Dixie Yarns will purchase    industry.
 Patrick Carpet Mills.
 Primarily a high-end
 commercial mill, the
 West Coast company had
 sales of approximately
 $20 million in 1993.
  Queen Carpet acquires
  Tuftex Industries, the
                              July
                              Recycling is the buzz
                              word at NeoCon ’94 as the
                                                              Coming to America:
  second purchase of a
  West Coast mill in a
  week.
                              A&D community starts
                              showing a big interest in
                              environmentally friendly
                                                              The Pergo phenomenon
 Diamond, Dixie,              options.
 Interface, Mohawk,                                                    By Jim Gould, president, Floor Covering Institute
 Queen and Shaw are
 among the carpet mills                                          n the 1980s, in the small          for foreign manufacturers. In

                                                              I
                               Maxim acquires GCO Carpet
 subpoenaed by the U.S.        Outlets for an estimated          Swedish town of Perstorp           short order, Misco had a new
 Justice Department in a       $10.5 million. The purchase
 federal antitrust probe.                                        Village, a laminate countertop     product and DSI had a new
                               gives Maxim access to the
                               cash-and-carry business.
                                                              manufacturer began experi-            client.
                                                              menting with laminate that                Pergo’s president, Lars von
 August                                                       could be used for flooring.           Kantzow, had only recently been
 Pergo laminate is now                                            From its production facility      hired away from Cricket Lighter,
 available in the U.S. The                                    in Trelleborg, Sweden, Pergo was      a division of Gillette (formerly a
 national rollout of its
 revolutionary floor is                                       launched into Austria, Germany,       division of the Swedish Match
 being led by                                                 France and Scandinavia, where it      Co.) where he had proven his
 Color Tile                   September                       was an immediate hit.                 ability to capture market share
 and Carpet                   Chris Davis is named                With momentum behind it           with a new product. As we dis-
 One.                         executive director and          and looking to broaden its mar-       cussed his challenges, it became            Lars von Kantzow
                              CEO of the Western Floor        ket, Pergo took the product to        evident he was committed to
                              Covering Association in         Domotex Germany, Europe’s             understanding the industry and           It took awhile to organize all
                              preparation of its merger
                              with the American               largest floor covering show. That     doing whatever it took to make       the pieces before the launch. To
                              Floorcovering                   is where, in 1992, Paul Murfin        Pergo succeed. To head up U.S.       guarantee sales and recruit dis-
                              Association.                    (now CEO of IVC) and I stum-          marketing and advertising, Lars      tributors, one-year exclusive
 October                       Close to 200 installers from   bled upon the Pergo exhibit.          hired Bill Dearing, previously       agreements were signed with
 Industry mourns the           around the country come to     Paul and I were at the show look-     director of U.S. sales at Cricket    Alan Greenberg for Carpet One
 passing of Harry Saul,        Kansas City, Mo., for the      ing for new wood suppliers for        and currently president of the       and Larry Nagle for Color Tile.
 founder of Queen Carpet       first-ever convention of the   Misco Shawnee, my Midwest             North American Laminate              With retailers in place, Lars
 and philanthropist.           International Certified
 He was 85.                    Floorcovering Installers       distribution company. Pergo           Flooring Association. Other          recruited a network of the best
                               Association (CFI).             piqued our interest. The              members of his Cricket team          wholesale distributors in
                                                              installed planks looked like          eagerly rejoined their leader.       America. Without established
                                                              wood but something about it               Timing for a new product in      competitors in the market,
                              November
                              Western Solutions, a            was different. Little did we know     the market could not have been       enhanced profit margins for dis-
                              division of E.T.C. Carpet       then how the chance discovery         better. Consumers and retailers      tributors and retailers sweet-
                              Mills, is the first carpet      would change our lives and the        were tired of the same products      ened the proposition. Prices and
                              manufacturer in the U.S.        industry.                             with their worn appearance and       margins held firm while the con-
                              to say it will make all its         We learned that Pergo could       maintenance problems; retailer       sumer benefited from a new
                              products out of
                                                              not launch in the U.S. market         and distributor profit margins       product with improved perform-
 December                     recyclable nylon fibers.
                                                                                                    had been squeezed to a mini-         ance.
 Mohawk purchases
                                                              because it lacked the infrastruc-
 Galaxy Carpet Mills from                                     ture: warehousing, logistics,         mum as flooring categories               When Pergo launched in the
 Peerless Carpet Corp.                                        sales force and internal opera-       became            commoditized.      U.S., Misco was the first distrib-
 for $42.4 million.                                           tions. Ironically, two years earli-   Everyone was ready for some-         utor and my company DSI was
                                                              er I had created Distribution         thing new; Pergo had the prod-       the machine behind the curtain
                                                              Services Inc. (DSI), specifically     uct and the management, DSI          taking orders, warehousing and
                                                              to handle logistics in America        covered their logistics stateside.   processing claims. Everyone
Getting better with age - Rfloorcovering news THE 30TH ANNIVERSARY ISSUE - Congoleum.com
‘
fcnews                                                                                                                                                       July 18/25, 2016 I 47

                                                                                           ’
           dialing 1-800-PERGO
           reached a DSI/Misco               As one very close to the operations                              of earlier DPL products.             original distributors.
           employee            who                                                                            Competitors          introduced          While today the DIY market
           answered, “Thank you
                                            of Pergo, I watched Lars von Kantzow                              beveled edges, embossed-in-reg-      represents more than 60% of
           for calling Pergo.”            orchestrate sales, advertising, marketing                           ister designs and glueless instal-   laminate sales, back then the
           Orders shipped from                                                                                lation systems. The family that      decision to sell to big boxes was
           DSI’s Pergo inventory                and operations with wizardry.                                 controlled Perstorp chose not to     questioned and criticized.
           to distributors across                                                                             immediately respond by invest-       Today, Pergo lives on as a divi-
           the country, and                                                               —Jim Gould,         ing in new equipment, and            sion of Mohawk Industries
                                                                        president, Floor Covering Institute
           Carpet One and Color                                                                               Pergo fell behind as a conse-        joined by its once archrival,
           Tile exceeded every-       inate what had become an          Harvard School of Business.           quence. A decision to sell direct-   Unilin. Lars von Kantzow is the
           one’s—except Lars’—        entirely new flooring category.   Competition introduced less           ly to Home Depot in hopes of         CEO of the highly successful
           expectations.                  Post mortem: The fate of      expensive direct pressure lami-       keeping competitors out of that      Nomaco, the world’s largest pro-
               Customer satisfac-     such a highly successful compa-   nate (DPL), overcoming limita-        channel broke the support and        ducer of synthetic bottle stop-
           tion and service were      ny could be a case study at the   tions in design and performance       confidence of many of Pergo’s        pers for wine.
           paramount to Pergo.
           The company flew in
           as many pallets as nec-
           essary to fill orders
           when a SKU sold out.
           If an installer did not
           follow the installation
           instructions, and sub-
           sequently caused a
           failure, Pergo supplied
           new material free of
charge. Since 80% of claims
were installation related, Pergo
started training installers. Later,
certified installers were required
or the warranty was voided upon
installation.
     Most importantly, Lars
understood how to build a brand
in a brand-starved industry.
Inheriting a name that was more
reminiscent of spaghetti sauce
than flooring, the company gam-
bled millions in a sustained,
multi-year advertising cam-
paign, wisely spending $10 mil-
lion a year in shelter magazines,
industry press and general pro-
motions. The impact was equal
to some corporations spending
in excess of $25 million per year.
Paid advertising was enhanced
by consumers enthusiastically
telling their friends about their
exciting new floor. Word of
mouth spread the news more
effectively than purchased
advertising, an early example of
“peer reviews.”
     A simple retail display with a
high heel and a challenge to con-
sumers to try to dent the floor
effectively demonstrated the
Pergo story. Mrs. Consumer
watched in amazement as the
salesperson calculated the cost
of the project with a magic
marker on the Pergo plank then
easily wiped the board clean.
Smokers watched a demo of a
lighted cigarette that did not
mark the floor.
     As one very close to the oper-
ations of Pergo, I watched Lars
orchestrate sales, advertising,
marketing and operations with
wizardry. By 1996, Pergo began
to manufacture flooring in
Garner, N.C., continued to dom-
48 I July 18/25, 2016                                                                                                                                         fcnews

 January                                                                                                                                 the               stories
 Industry stalwart M.B.
 “Bud” Seretean is app-
 pointed chairman of The
 Maxim Group, succeeding
                                1995
 Richard Kaplan.
   Jeff Lorberbaum is
   named president and          February
   COO of Mohawk                Karastan becomes the
   Industries while             first licensee of the
   retaining his                new Wools of
   responsibilities as          New Zealand
   president                    brand.
   and CEO of
   the Aladdin
   division.

 April
 Stanton Carpet
 purchases Royal Dutch
 Carpet Mills.

                                May
                                Minnesota forms the
                                Carpet Recycling
                                Program, CA-RE through
                                United Recycling. This is
                                the forerunner to the
                                industry’s Carpet America
                                Recovery Effort founded
                                in 2002.
                                  Shell Oil enters
                                                                How Armstrong’s ‘Quest’ for floor space
 June
 Countertop heavyweight
 Wilsonart announces its
                                  the flooring
                                  industry with a
                                  new fiber
                                                                    paved the way for laminates
 entry into the flooring          named Corterra. The
 industry with a branded          company says the poly               By Reginald Tucker
                                                                                                    ates and consumers alike.            of the Quest merchandising pro-
 line of laminate flooring.       trimethylene terephthalate                                            “The idea was to give the        gram. With Armstrong-branded
                                  (PTT) polymer exhibits the            t was really about pre-     specialty retailer permission to     resilient flooring products and
                                  best characteristics of
                                  nylon and polyester.

                                July
                                                                “I      senting fashion to the
                                                                        floor covering retailer at
                                                                a time when many companies
                                                                                                    feel more comfortable about
                                                                                                    being in the interior fashion
                                                                                                    business,” said Qualls, who for 17
                                                                                                                                         signature collections gaining
                                                                                                                                         more prominence within home
                                                                                                                                         centers, the company needed a
                                                                were not really doing it. That      years managed the residential        way to address the rising chan-
                                Perstorp, maker of Pergo        was the mindset driving that        and commercial flooring brand        nel conflict caused by the unrest
                                laminate flooring,
                                announces it will break         whole system.”                      strategies at Armstrong. As she      that was brewing among inde-
                                ground on a manufactur-             That’s according to Sherry      explained:      “Everyone       at   pendent specialty retailers who
                                ing plant in Raleigh, N.C.      Qualls, a former advertising and    Armstrong felt it was really         struggled to compete head-to-
 August                           Wunda Weve is acquired        marketing executive with            important that we didn’t differ-     head with the big boxes on the
 Kentile, at one time the         by World Carpets. The         Armstrong          World
 most well-known brand of         purchase comes as             Industries, reflecting on
 resilient floors, ceases         Wunda Weve filed for
 operations.                                                    the concept behind the
                                  Chapter 11 bankruptcy
   “Cotton’s Future in Floor      protection.                   development of the
   Covering” is a one-day                                       infamous           Quest
   seminar held in Dalton by                                    resilient floor covering
   Cotton Inc. as the                                           merchandising system
   organization makes a push                                    that Armstrong official-
   to bring the fiber back to
                                                                ly launched in 1995.
   the industry.                October                         Primarily devised as a
 Armstrong sells its            Carpet One enters the
 American Olean tile            wholesale business with         means to squeeze com-
 division to Dal-Tile           the opening of Distribution     peting hard surface
 International.                 One in Dalton.                  products off the show-
                                                                room floor, observers
                                                                say it actually resulted
                                November
                                Dick McAdams, founder of        in more space being
                                Georgia Carpet Outlets          devoted to laminate           The quest display system with all its
                                (GCO), has stepped down         flooring, then an up and      components.
                                as president and CEO. He        coming category.
                                will continue to serve as           Massive and bold in its pres- entiate between resilient and          same branded products.
                                chairman and remain on
 December                       board of Maxim, GCO’s
                                                                entation, the Quest display laminate flooring as much as we                  “Yes, that was a very impor-
 Armstrong unveils Quest,       parent company.                 claimed to be the first such sys- wanted to reinforce the fact that      tant strategy, obviously,” Qualls
 the most comprehensive           LDBrinkman, the
                                                                tem to utilize large-scale, free- we were giving customers a vari-       recalled. “There were a number
 program in company                                             standing samples and the first of ety of choices in a display system     of products, especially lami-
                                  industry’s largest
 history, to roughly 1,000                                      its kind to incorporate actual that was beautiful as well as             nates, that were finding their
 distributor and retail           distributor, has thrown its
 guests in Orlando, Fla.          hat into the laminate ring    room-scene photography on the functional. The goal was to take           way into the big box retail loca-
                                  by becoming the exclusive     reverse side of those samples. an elevated approach to the tra-          tions. In those days it was very
   The management group           wholesaler of Fibo-Trespo
   that purchased JPS                                           The system was also built on a ditional retail presentation.”            important to Armstrong to
                                  in its 34-market territory.
   Carpet Corp. from JPS          Fibo would ultimately         good/better/best platform that           But that was only part of the   make sure there was a very
   Textile renames the            become Alloc.                 appealed to retail sales associ- reason behind the development           clear differentiation, and one of
   company Gulistan.
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