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Showing posts from November, 2009

Reality Rains on Optimism for Flooring and Carpet Industry

My sense is that optimism is in the air for the floor covering industry. Many of my friends and colleagues are hopeful. You’ve read the good news too. The recession is over. More people are preferring carpet. Home sales are up. Life is good! Not so fast. The numbers don’t support the positive vibes. Perhaps you read that there are fewer houses in inventory to be sold and that home sales are up. But the worst has yet to come; there are still more than three times the current number of foreclosures still in pre-foreclosure. Furthermore, industry pundits tell us that 2010 and 2011 will see great numbers of foreclosures too. The impact on the housing market is immense. The flooring industry is unlikely to emerge from the protracted recession without an improved housing sector. Then there is retail replacement and pent-up demand. Maybe, but maybe not. Watch the Consumer Confidence Index which continues to bump-along the bottom. Furthermore, the longer a customer keeps her carpet the more

Lacey Act Illegal Wood Investigations Begin

According to news reports the U.S. government has executed its first warrant and seizure of property for illegally logged wood under the timber provisions of the U.S. Lacey Act Amendments. The story broke with this article, Gibson Guitar plant in Nashville raided by feds. Federal agents served a subpoena on Gibson Guitars on the 18th and according to subsequent reports, they seized guitars, computers, files and wood. Apparently an investigation into trafficking in illegally harvested rosewood and ebony from Madagascar’s rain forests lead to Gibson who uses the wood to embellish their guitars. Gibson’s CEO issued a press release saying that the company takes the issue of responsible wood sourcing very seriously and makes every effort to ensure that all of its wood comes from certified sources. He sits on the board of the Rain forest Alliance, an NGO that certifies products for their environmental credentials, but has now stepped down pending conclusion of the investigation. This is

The Commercial Floor Covering Forecast-Another Storm is Brewing

Consensus is that the residential floor covering hurricane has passed and a slow recovery has started. Meanwhile, a tropical storm in the commercial real estate market is quickly brewing off shore and there is reason to believe it will grow into a storm larger than anyone expected. The floor covering industry needs to take note . Last week I attended the Star Net Worldwide Fall Meeting where several excellent speakers reviewed the past and looked into the future. It was a mix of good, bad and ugly news and since then I've taken a closer look at what is going on in the commercial real estate market which is why I'm writing to you today. But first, the good news....the newly released McGraw Hill 2010 Construction Outlook says that overall construction should increase 11% in 2010; a welcome change. They say the residential construction market is on its way back: Single family constructions has already bottomed out. A projected 30% increase in units in 2010 will take us back r

Flooring Retailers, Are You Evolving Your Digital Retail Experience?

Flooring Retailers: Take Note! Are You Evolving Your Digital Retail Experience To Take Into Account Gen Y Women Consumers' Greater Use of the Internet? It's a question that comes out of Stuart Hirschhorn's post about Flooring Trends Target Generation Y and his statement that the generation born between 1974 and 1993 [aged approx. 35 to 16 in 2009] and known as " Generation Y will cause changes on where and how floor coverings are sold ." More specifically, " Generation Y looks to the Internet to retrieve product information, get opinions from social networks, and use electronic connections to communicate .. and make purchases." Do you agree with Stuart? I do, and eMarketer does per Younger Women Step to Social Beat , but I think the statement goes beyond just Gen Y. And, I would hate for you to dismiss it by thinking that Gen Y isn't your customer, or that what you're doing now works just fine. As important as demographics are, here are

Flooring May be Global but the Markets are Local

Declining domestic sales and a weak dollar have some flooring manufacturers considering exporting as a way to take advantage of the global market place. I whole heartedly support this concept but it’s not as simple as shipping a great widget to a new widget market. Although flooring may be global, significant differences in language, consumer preferences, channels, manufacturing standards – just to name a few considerations to avoid costly and time consuming mistakes - make flooring markets very local. Vive la diffĂ©rence! – Just make sure you understand what la diffĂ©rence is! Consider the case of a U.S. hardwood flooring manufacturer who decides to pursue new business in Europe: Language . Whilst the U.S. is a huge geographic area pretty much all of the customers speak the same language. On the European Continent there are around 50 different countries each with its own language or dialect, culture, food, market conditions and preferences in color, design and wood species. The U.S.

Floor Covering Trends Target Generation Y

T he following is based upon Catalina Research's statistical trends and outlook for floor covering which indicate that Generation Y is floor covering's next target. If your business is to survive the current recession and thrive during the next economic recovery, it's time to set your sites on the Generation Y - those born between 1974 and 1993. Catalina's research shows that as we entered the recession in 2007, it was the younger demographic that was increasing its floor covering spending while their Baby Boomer parents were cutting back on floor covering purchases. These trends reflect what is considered the lifecycle of purchases. The Baby Boomers (ages 45 to 64 years), numbering 38.0 million strong in 2008, have cut their floor covering spending as their concern about saving for retirement increases or they retire. On the other hand, the 42.7 million members of Generation Y are focusing on forming households, starting families, and purchasing homes and home furn

Faus Loses Patent for Embossed in Register

The Faus Group patent for its Embossed in Register R and Joint Guard R technologies was invalidated this week by the European Patent Office. Less than two years ago Faus Group announced the issuance of European Patent No. 1 229 183 B1 . This patent was issued to the innovative Spanish laminate manufacturer for its Embossed in Register R and Joint Guard R technologies. Since then some manufacturers signed licenses with Faus to access this intellectual property while others claimed the patents were without warrant. This week the European Patent Office invalidated its own patent, claiming that prior art from Pergo and Japan existed. Since Faus’s petition did not show any new technology, the patent was revoked. For an industry that has fought laminate patents almost as long as the product has been available, no one wanted another IP battle. What impact will this change have on Faus and the laminate industry? It is assumed that this will be one less lawsuit for the industry to worry

Floor Covering Business is on the Up-tick says Migliore

My unofficial straw poll taken by questioning a variety of flooring dealers from all over the country who call us with questions on problems or issues daily has given us a glimpse of good news. There is an up-tick in flooring business of late and business is stabilizing. What this means is that the backwards slide seems to have subsided and customers are walking in the door and buying. The story is the same from Connecticut, to Dalton Georgia, to California. Unless you’re in a market that has been affected by serious downturns like Elkhart, Indiana or Detroit, Michigan flooring dealers are starting to breathe just a tad easier. They tell me builder business is still off, no surprise there, and that homes being purchased from foreclosure and remodeling projects are where the business is coming from. What’s selling? The two leading products are c arpet and laminate and not necessarily the cheapest stuff. The mix is roughly 60% carpet and 40% hard surface. Carpet because there’s

Is Carpet "Dead" Or Is It "King"?

In the last few weeks conflicting opinions about the status of the carpet segment in the flooring industry have appeared on this blog and elsewhere. Some industry pundits say carpet is "going out of style" (Chris Ramey) ; that its " market share has stabilized " after a decline (David Wootton) ; while others say carpet is " king " (Lew Migliore) and carpet is " gaining share " (Stuart Hirschhorn in Part 1 of his 2 Part post). What's notable about this is that all of these opinions came from my associates at the Floor Covering Institute . Obviously, there is a diversity of opinion among my own colleagues. By the same token, I believe that they represent the diversity of opinions in our industry on many issues. For example: (1) Are distributors growing stronger as they pave a new path or are they dinosaurs? (2) Is green a fad or a major trend that will change our industry forever? (3) Will more governmnet regulation protect our industry