published Sunday, June 28th, 2009

Area floor makers ready to rebound with economy

by Brian Lazenby
Audio clip

Kim Gavin

The flooring market has been hit hard by the economic recession, particularly by the stagnant housing market, but experts said area manufacturers have taken appropriate measures to survive and thrive when the market rebounds.

Kim Gavin, executive editor of Floor Covering Weekly, said area flooring manufacturers have cut staff and reduced inventories to combat the downturn.

"This is the most significant downturn the flooring industry in general, the carpet industry in particular, has ever seen," she said.

According to the 2009 annual report published by Floor Focus magazine, U.S. flooring sales were down 11 percent or almost $2.5 billion last year.

Kemp Harr, publisher of Floor Focus, said flooring manufacturers rely heavily on the housing market for their sales.

"The housing market has been dead since 2006," he said.

2008 Top 10 Flooring Manufacturers

Company; headquarters 2008 Sales

1. Mohawk; Calhoun, Ga. $4.57 billion

2. Shaw; Dalton, Ga. $4.50 billion

3. Armstrong; San Francisco $1.32 billion

4. Beaulieu of America; Dalton, Ga. $993 million

5. Mannington; Salem, N.J. $584 million

6. Interface; Atlanta $526 million

7. Tarkett; Nanterre, France $409 million

8 The Dixie Group, Chattanooga $267 million

9. Pfleiderer; Neumarkt, Germany $240 million

10. C&A Floorcoverings; Dalton, Ga. $238 million

Source: Floor Focus Magazine

In addition to plummeting sales, flooring manufacturers have had to deal with sharp jumps in the cost of raw materials that Ms. Gavin said has made matters worse.

She said flooring manufacturers have been forced to lay off much of their work force and have reduced manufacturing capabilities and inventories.

Records show that well over 1,000 flooring manufacturing positions have been cut at Shaw, Mohawk Industries and Dixie Group during the past several months.

Mr. Harr believes the economy is nearing the bottom and should soon begin to level off.

"The recovery is going to be very slow," he said. "Our call is that '09 is going to be worse than '08 from a revenue standpoint."

Ms. Gavin agreed that most are predicting a slow, gradual recovery, but because of the staff reductions and lower production capacity, a quick turnaround in the market could mean supply problems and sharp price jumps.

"But that's a good problem to have," she said.

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