Galleher: Challenges, opportunities in distribution

distributionIn the last decade, Galleher has grown an astounding 253%— from $95 million to $335 million—by far the highest jump of any Top 20 Distributor on FCNewsannual list. The company’s growth comes amid an executive transition at the top, with long-time executive Jeff Hamar passing the proverbial baton to new CEO, Ted Kozikowski, who brings an extensive background in the building products industry as well as experience in global supply chain organization and distribution.

FCNews senior editor, Ken Ryan, recently caught up with Kozikowski to discuss his new role, the challenges and opportunities ahead and the evolution of flooring distribution.

You have been on the job for over a year. What is your impression of Galleher in that time?

This was an interesting first year for sure. We are projecting sales increases of over 60% in the middle of a global pandemic, quarantines, supply chain challenges, inventory issues and rapidly increasing prices over the past year. Plus, we’ve made two acquisitions that have significantly improved our competitive position in the market and expanded our geographic coverage to the entire western and southwestern regions.

And, through it all, what has impressed me the most about Galleher is the commitment and dedication to our customers by the Galleher team that Jeff and Todd Hamar, along with Rick Coates [senior vice president], have built over the years. We like to refer to it as the Galleher “wow” factor—we will do whatever it takes to help our customers keep the promises they’ve made. It sounds like a cliché, but in this case, it’s absolutely true: the resiliency and commitment of our people make all the difference.

How did that prepare you for your current position?

My varied experiences over the years have all had a positive influence on my current role at Galleher and helped define my personal leadership style. I have a unique educational background, having graduated from the United States Coast Guard Academy and obtaining an MBA from The University of Chicago. This combination of military training and classic B-school education gave me unique insights into strategy, leadership and organizational dynamics.

Starting with my time in the military to running complex businesses of various sizes from $12 million to $1.5 billion, I’ve been lucky enough to benefit from the wisdom of several mentors throughout my career.

At Oldcastle, for instance, I worked alongside some truly impressive individuals who have shaped both how I think now as well as helped define who I am today. They instilled in me the importance of balancing the quantitative financial and logistics side of the business with critical leadership and motivation abilities, by leveraging the individual strengths of each member of the leadership team. They taught me to surround yourself with the best people and encourage them to shine.

I also think back to a quote of one of my military idols, George Washington, who said, “Leadership is not only having a vision, but also having the courage, the discipline and the resources to get you there.”

That belief and commitment to teamwork has served me well at Galleher: provide a vision, trust the team, rely on their expertise and good things will happen.

No distributor has grown faster than Galleher, which in 2012 was a $95 million distributor. Ten years later, it has more than tripled that figure. What other growth opportunities might await Galleher?

We are extremely proud of our steady growth over the past several years, but our growth strategy is directly aligned with our customers’ objectives. Our core strategic goal is to continue to meet the expanding needs of our customers as we expand eastward. That includes expanding our product mix; re-focusing on our proprietary brands—Monarch Plank, Reward Flooring and GemCore; increasing our commitment to commercial flooring; re-evaluating pricing options; expanding geographic coverage; and cementing our ability to provide one-stop shopping for all our customers’ flooring needs.

Plus, we expect to continue our aggressive strategic acquisition strategy to add geographic coverage and expertise in additional markets across the US where appropriate.

What, if anything, can a distributor like Galleher do to combat the supply chain problem?

We expect the global supply chain challenges to continue for the next several
months. The trickle-down effects of raw material availability, worker shortages, shipping delays and price increases continues to negatively impact the industry’s inventory position, making it difficult to meet demand short term.

We’ve been proactive in building up our inventory—when competitors were cutting back—and we’ve steadily diversified our sourcing across different regions of the world to protect ourselves from supply chain instability.

We’re also thankful for the strong partnerships we’ve formed with our suppliers over the years, which has helped us maintain a relatively strong inventory position and will set us up to meet the expanded product needs of Galleher’s growth, coupled with the needs of our acquisition opportunities.

What changes do you foresee for flooring distribution in the years ahead?

The distribution business has evolved over the past few years and the strong distributors are able to offer a one-stop shop for all the flooring product and service needs of their customers. A good distributor not only provides the products, but they also become a consultative partner with customers by working on options and alternatives to help them through all aspects of installation. Essentially, they become a single source of all flooring and installation supplies, simplifying the process for the customer.

What excites you about the future of Galleher?

Galleher’s future is extremely bright. We believe we are providing our customers everything they need to keep the promises they make to their customers. Everything from consultative services to specifying to subfloor prep, flooring choice, installation sundries and maintenance products. We believe this model will define the future of flooring distribution. Our focus will continue to be on growing our proprietary brands, our commercial business and on strategic acquisitions. These pillars form the base of our growth strategy and give us confidence that we will continue to grow and meet the needs of our customers.

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