published Sunday, December 19th, 2010

Carpetmakers take a holiday

  • photo
    Hubert Bryson replaces spools at Beaulieu of America, a carpet factory in Dalton, Ga.
    Staff Photo by Allison Kwesell

The Christmas tree is decorated, the presents are arranged and the relatives are pulling into driveways across the Chattanooga area. As the family reclines by the warm fire, most of them aren’t preparing to rip out their floor and replace it with a new one during the holiday season.

In fact, demand for new residential flooring and carpet falls so sharply during the Christmas season that most carpet mills send workers home for at least a week, said Kemp Harr, publisher of Floor Focus magazine.

“They’ve got to allow their inventory levels to fall to meet market demand,” Harr said. “The length of the shutdown is usually based on market conditions.”

And it’s no small task to shut down the gigantic plants that produce the majority of the world’s carpet and flooring products.

“When you shut down these extruders, everything inside turns into a solid, and you basically create a lot of waste,” Harr said. “It’s a major deal to shut these extruders off.”

The practice of shutting down for Christmas grew out of the old textile industry’s tradition of closing up the factories for the Fourth of July and the Christmas holidays, according to Kimberly Gavin, editor of Floor Covering Weekly.

“For many years, the carpet industry saw a strong seasonal pattern,” Gavin said. “You’d build toward the spring, and there’d be a big spring selling season, then it would fall off again in the fall. By Thanksgiving, it was done.”

At that time, if consumers hadn’t purchased and installed their carpet by Thanksgiving, they weren’t buying carpet that year.

FADING PRACTICE

The holiday shutdown remains somewhat unique to the carpet industry, because most other consumer goods can be installed or removed with far less disruption to a family’s Christmas plans.

Demand for towels, furniture, clothing, toys and more actually increases during the holiday due to gift giving, officials say. Ironically, it’s these presents’ presence under the tree that slows the sale of flooring.

Over time, however, the tradition of completely shutting down for the holidays faded away.

“When demand was strong, like in 2005, they found it a little harder to do that,” Gavin said.

Carpet mills stopped shutting down for the 4th of July during recent years, and some high-demand years saw the plants run right through Christmas, as carpetmakers struggled to supply the inflated housing market.

The effect was magnified because of the transition toward cut-to-order business practices, which spread demand out over the year, as opposed to selling rolls of material in large “markets” twice per year.

SHUTTING DOWN

But this year, nearly everyone will pause to take a deep breath before turning to face 2011, said Ralph Boe, president and CEO of Beaulieu of America.

While it hasn’t been a particularly bad year, the industry hasn’t seen especially strong growth, either, he said.

“This year we’ll have all of our operations shut down,” Boe said. “When people decorate their homes for Christmas and they’ve got the tree up, they’re less likely to be involved in putting carpet down on their floors.”

When the company shutters its plants, “a lot of people appreciate the fact that they’re off between Christmas and New Year’s,” and take the opportunity to spend time with their families, an opportunity not always available to workers in other industries.

Of course, not everyone goes home.

Beaulieu’s order entry, shipping and commercial goods production will continue on as usual, Boe said.

The week of downtime — between Christmas and New Year’s Day — in some of the major plants also gives carpetmakers a chance to tinker with, tweak and overhaul the machinery that produces the bulk of the world’s carpet.

“There are certain maintenance projects that require several days or a week to complete,” Boe said. “It’s difficult to do those in the peak of the business cycle.”

MAINTENANCE

Carpetmaker Shaw Industries as well as Propex, a carpet backing manufacturer, also will shut down for the Christmas season, executives say.

“I would say it’s a combination of annual preventative maintenance and capital improvements,” said Al Scruggs, Shaw’s human resources director for manufacturing and distribution.

“It’s been sort of traditional for us to be down in the last week or so of the year, because we really run the rest of the time,” Scruggs said.

Though the plants are shut down, not everyone is home for the holidays, he said. Crews are working to overhaul machines, while customer service, sales and administrative associates go about “business as usual,” added Scruggs.

Propex’s Randy Powell said Christmas is also a great time for safety training and efficiency improvements.

“We do our annual required training for OSHA this time of year, and compliance on ability to drive forklifts through cones,” Powell said. “We can set the cones up when we’re slow, it’s nice to knock that out.”

PLANNING

When plant production slows, administrators and marketers get to work preparing for a new year full of new products, new demand, new regulations and new challenges, executives say.

“We do what’s called future state maps, a tool that helps us set aggressive goals and communicate them,” Powell said. “We ask, what’s in the way, why aren’t we already at those goals, and we’ll lay that out in a formalized process.”

Flooring manufacturers also have to get ready for the so-called winter markets, a selling frenzy in early spring that sees new products launched in cities across the country.

The idea is for major flooring manufacturers to meet with carpet dealers and convince them to take carpet samples back to their retail stores. Those carpet samples lead to a large proportion of retail sales, although the scope of the markets has decreased in recent years, Gavin said.

“Shaw and Mohawk used to do 30 or 40 shows around the country, now they will still do seven or eight,” Gavin said.

Despite the reduced emphasis on visiting every major city in America, introducing new products to retailers is still a major undertaking requiring months of planning, Harr said.

“The marketing people, these road warriors, they’re going kiss their wife good-bye after Christmas, then they’re going to be on the road until March, hitting it heavy and hard for three months,” he said.

CONTRARIAN

There is one man who claims he doesn’t shut down for Christmas, because it’s his busiest time of year.

And it’s been that way for 20 years.

“In the upper end of the market, which we tend to play in, the fourth quarter is always our busiest quarter.” said Dan Frierson, chairman and CEO of The Dixie Group.

He’s seen order volume increase 20 percent, which he calls “a return to historical norms.”

“We definitely are seeing the upper end of the business coming back,” Frierson said, especially the commercial replacement business.

And he thinks that could bode well for the entire industry.

“Let’s face it, the end of ’08 was a disaster, as was all of ’09,” Frierson said, “so hopefully this is a return to normal.”

about Ellis Smith...

Ellis Smith joined the Chattanooga Times Free Press in January 2010 as a business reporter. His beat includes the flooring industry, Chattem, Unum, Krystal, the automobile market, real estate and technology. Ellis is from Marietta, Ga., and has a bachelor’s degree in mass communication at the University of West Georgia. He previously worked at UTV-13 News, Carrollton, Ga., as a producer; at the The West Georgian, Carrollton, Ga., as editor; and at the Times-Georgian, Carrollton, ...

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dannyjeter said...

What you didn't mention in the article is that when the plants are down they lay off the employees with no pay. It is always one day short of being able to collect unemployment. So don't make it sound all rosey at Christmas.

December 19, 2010 at 9:20 a.m.
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