Executives ponder feasibility of a national distributor

WIf the industry’s major distributors (Belknap-Haines, Tri-West, and Galleher) grow organically and through acquisitions – swallowing up regions and states – could the stage be set for the emergence of a bona fide national floor distributor?

If successful, it would be the first time a real floor divider has taped the overflow. Floor historians will recall that former heavyweights LD Brinkman and Hoboken Floors both tried to go national but ultimately failed.

At its peak in the late 1990s, Brinkman operated in the Southwest, Southeast, and West Coasts—38 states in all—generating annual sales of $400 million. In 2003, however, it had filed for Chapter 11 bankruptcy and was never the same.

Hoboken Floors had a similar meteoric rise — and fate. Former employees claimed that Hoboken was growing too fast in an ambitious bid to become a national distributor. With sales of more than $550 million and 1,000 employees — and customers including Home Depot and Lowe’s — Hoboken was at the top of the distribution business before it fell apart. It went bankrupt in 2007.

Fifteen years later, there are still no national flooring distributors in the US, but that could change. “While there has never been a successful nationwide flooring distributor until now, the game is changing and as a result, there is certainly an opportunity today,” said Jeff Striegel, president of Elias Wilf, a veteran. in the industry. of more than 40 years.

Striegel is not alone in this line of thought. “We believe that a national distribution model is possible given technological advances through e-commerce, supported by a network of local branches and distribution centers to meet the needs of floor installers and contractors across the country,” said Ted Kozikowski, CEO of No . Galleher with 3 ranks, which has a footprint that covers the western and southwestern regions of the country.

Kozikowski said such an undertaking requires a “high-touch” local branch organization across the country, supported by strategically placed warehouse distribution centers. “This combination of national scale supported by e-commerce, proprietary products and local offices should provide customers with the benefits of scale without losing the consultative aspect that is so important to the success of our industry.”

Scott Rozmus, President/CEO of FlorStar Sales, also advocates a national distributor. “As the consolidation continues, it’s only a matter of time before you have one or more independent distribution companies operating nationally,” he explains. “You already have this in places like Canada (GSO Shnier). While the Canadian and US markets are different, there are enough parallels to suggest that it is not a question of if, but when in the US.”

Tri-West Ltd., Santa Fe Springs, California, is the No. 2 flooring distributor with projected 2022 sales of $400 million. Its territory now covers more than a third of the US, mostly on the west coast but as far east as Colorado. Whether a company of this size can make the leap nationally is open to debate, said Dave White, president of Tri-West.

“Except for the Shaws and Mohawks of the world, I don’t see a distributor who has the resources to set up a national distribution,” he shared. FCNews. “Bigger is not always better and product preferences still differ significantly between different parts of the country. I envision larger regional distributors that have the scale and logistics to be truly successful. I think there will be more consolidation with distribution, and smaller distributors will be bought if they can’t compete at that level or have a good succession plan to continue growing in the future.”

Potential Roadblocks

According to Striegel, the biggest barrier to national distribution historically has been the unwillingness of major national brands to source. If they had embraced a national model, they would have just gone straight and done it themselves.

“Normally, the distributor was aligned with one of four vinyl record manufacturers (Armstrong, Mannington, Congoleum or Tarkett) and their other lines responded to this,” he said. “However, as the industry has changed with the rapid growth in both imports and LVT – along with the decline in vinyl record sales – this alignment has changed dramatically. The other major change is that when the vinyl record category collapsed, we had companies like Mannington and Tarkett evolve into completely different companies with acquisitions in entirely new categories. Armstrong’s wood and laminate divestments, along with the most recent Armstrong Chapter 11, are also driving this momentum.”

Galleher’s Kozikowski believes that a national distribution model can offer customers tremendous benefits in terms of volume discounts, stock availability, delivery options and product selection. When asked if Galleher could ever become a national distributor, he replied, “Anything is possible.”

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