Confidence Is Returning
Caroline Hardy hears upbeat comments from UK flooring distributors
Another positive, encouraging year: That’s the view of many UK-based distributors who are continuing to benefit from the upturn, reports Caroline Hardy.
However, although confidence is encouraging some companies to spend more money on flooring, competition in the industry remains tough, according to some.
‘So far 2014 has been a good year,’ says Paddy McLoughlin, sales executive, Brooks Bros (Midlands). ‘Our turnover has increased and the economic upturn is likely to have contributed towards that as it seems that there are more companies with the confidence to spend money.’
Richard Bailey, md of Floorwise Group, agrees, but with reservations. ‘There has definitely been a more positive feeling in the flooring industry and this has certainly been reflected in our overall levels of business.
‘That being said, competition is incredibly stiff and this means that profitability is harder to come by.’
Similar views are shared by Malcolm Trott, md of T&R Floorcovering Distributors. ‘Last year was very good for us and 2014 has shown similar glimmers of improvements.
‘The economy is at a delicate stage at the moment and for us, margins are tight and still price-sensitive. However, the signs look more positive.’
Continual growth month on month has resulted in 2014 being judged a successful year, says Paul White, director of Flooring Sales.
‘The improvement in economic conditions has, of course, helped,’ he adds. ’But I believe that our success has been largely attributable to our service levels and actively sourcing even better quality flooring and accessories for all our ranges from value to top end.’
For Ray Colgate, md of STS Flooring Distributors, growth in the retail sector of his business has produced sales in excess of 7% with a forecast of 10% for the last quarter of the year.
‘There are many elements to this success but Cormar’s fantastic range of carpets and some new trading partners have certainly complemented our retail sales,’ he says.
‘Contract sales struggled during the earlier part of the year but this substantially improved throughout the third quarter. Sales with Altro exceeded our expectations and Polyflor and Gradus continue to show strength and innovation this year. It seems that UK manufacturers have performed particularly well.’
l Products and stock: ‘Being a specialist wood flooring distributor, we supply everything you could need for wooden floor installations,’ says Paul White.
‘Coming from a floor fitting background, we have a thorough understanding of what is required to complete installations from start to finish and supply accordingly.
‘As well as a wide range of flooring we supply all accessories and we are especially strong on hardwood beadings and thresholds.
‘We are the UK’s largest Bona distributor and a recommended machine servicing and repair centre.’
Paddy McLoughlin says Brooks Bros is ‘fairly unusual’ within the flooring industry because its main business is as one of the largest hardwood importers in the UK.
‘Alongside our main business of supplying rough sawn and machined hardwoods and clear softwoods, we both manufacture and import a mix of solid, engineered and structural engineered hardwood floors as well as supplying associated products, such as fixing and finishing products.
‘We also manufacture our own range of hardwood finishing trims and skirtings,’ he adds.
T&R Floorcovering Distributors supply all types of floor preparation products, including screeds, nosing and pvc-skirtings.
‘We also do Kahrs engineered timber floors, LVTs as well as commercial floor finishings, commercial floor tiles, underlays, tools and accessories,’ says Malcolm Trott. ‘As a distributor we are probably 90% contract and 10% retail.’
A new product launched this autumn has been high on the agenda at STS Flooring Distributors, as Ray Colgate explains.
‘Over the past 15 months the company has been working on a new 156-page catalogue in preparation for the introduction of our retail proposition to the high street, which was officially launched in September.
‘We’ve put a considerable amount of effort into producing a catalogue packed with highly visual and inspirational images to illustrate the product ranges that we stock.
‘Our new book showcases over 30 carpet ranges, 50 hardwood and laminates options, together with a fantastic selection of luxury vinyl tiles and luxury vinyl sheet.
‘We haven’t previously focused in on this sector but feel now is the right time to offer the high street a completely bespoke marketing solution with a great customer loyalty scheme.
‘This represents an enormous amount of investment of over £250k for marketing support and merchandising, none of which would be possible without our loyal suppliers supporting STS as a leading independent distributor.’
Floorwise supplies everything needed to install a floor with a quality end result, says Richard Bailey.
‘Whether it’s screeds, adhesives and underlay to stair hosings, door trims, gripper, tools, entrance matting, carpet tiles or laminate flooring, Floorwise has a fearsome reputation for excellence and remarkable value.’
l Trends and stock: There was a surprise for Paddy McLoughlin when he visited the Domotex show this year, as he explains.
‘I was expecting to see a lot more maple and beech products than oak, which I thought was the more traditional mix in the European market, whereas the UK market has always been heavily biased towards oak.
‘However, most of the hardwood flooring products on display were oak. I think that this is partially due to the more stringent legislation ensuring that hardwoods are purchased from sustainable sources.
‘This has reduced the available supplies of some of the more exotic species, which will help their survival and has had the effect of increasing the demand for oak which is easier to stain to replicate the colours of tropical species than most other commercially available temperate hardwoods.’
His theory is supported by Paul White. ‘I feel that the market is moving away from cheaper Far Eastern imports towards the better quality offered by European suppliers. Hopefully this trend will continue.’
As far as Richard Bailey is concerned, customers are still looking for a good deal. ‘More than ever, customers are wanting better value from products and we are evolving our core products to provide this as it is proving to be the key to winning new business,’ he says.
Malcolm Trott noticed that in 2014 a few floor manufacturers were tending to go direct to contractors.
‘Contractors give very little notice, therefore require a quick response to their orders, with next day a.m. deliveries being requested regularly,’ he says.
‘We put investment into carrying extensive stock ranges and quantities in order to provide a good service to contractors but we are being cut out by manufacturers supplying direct. It has been more noticeable this year and it’s becoming quite annoying.’
l Promising markets: ‘It’s more the residential market than contract, but that is probably due to our focus within the retail sector,’ says Ray Colgate.
‘The strengthening economy is helping and there is some evidence of an increase in consumer spending. People can only take so much doom and gloom – they want to spend their hard-earned cash, so there seems to be more confidence investing in their homes.
‘One thing is for sure, people are looking for a good range of affordable products. They’re not spending £30-40sq m and so you have to pitch the right products at the right price.
‘The hardwood market has been hard hit this year but luxury vinyl tiles have more than made up for this loss.
‘It is also interesting to see the laminate market growing again due to the improved textures in some great formats. Gerflor have also been instrumental in providing a number of great products within our own label portfolio of products in these areas.’
However, he is disappointed that competition is ‘overly aggressive’ in the sector. ‘There is a continual squeeze on prices and far too much profit has been taken out of the industry through aggressive positioning in the market.
‘Let’s hope for some sensible trading from us all next year.’
Richard Bailey sees significant improvement, particularly in the contract environment. ‘Commercial work is certainly more buoyant than that of the public sector, with new build and refurbishment on the up.
‘And as we see house prices continuing to rise, increased consumer confidence is seeing definite improvements in the residential sector too.’
Paddy McLoughlin, too, has seen an upturn in the amount of new building.
‘This has increased the demand not only directly from builders but also from builders’ merchants, timber merchants and joinery manufacturers.’
As far as T&R Floorcovering Distributors is concerned the market is looking pretty strong in education in Leicester, near its Nottinghamshire base, and in hospitals too.
‘Last year was very encouraging in these sectors and we have maintained that this year,’ adds Malcolm Trott.
l Selling direct to end users:
‘We will never sell to end users; we see it as a conflict of interest,’ says Paul White. ‘As distributors we expect to buy from the producer/manufacturer and sell to the trade. The trade then sell to the end user.
‘If you deviate from the supply chain by selling direct to the public then this results in traders suffering. We value the trade as our customers and not as our competitors – to our mutual benefit. This belief is at the core of our business.’
And Richard Bailey’s views are to the point. ‘Simply, we don’t. After all, why would you bite the hand that feeds you?’
l The year ahead: Building on the momentum of 2013, trade continues to improve along with cautious optimism.
Malcolm Trott expects to get busier in 2015 and is also hoping margins might improve. ‘Contractors are fighting for every job so their margins and consequently ours are being squeezed.
‘It is very tight at the moment so I hope things will relax a bit. Businesses have to grow to survive and if they get stale they die.
‘We want to increase our profit in order to grow the company with investment in additional storage, stocking new product lines and increasing stocks of our current product lines.’
Ray Colgate believes ‘without a doubt’ that 2015 will fulfil expectations.
‘We hope to grow our business both within the contract and retail division and expect numbers to exceed this year’s surprising result.
‘This will also be aided by another division of our business with the newly launched Hygienic Wall Cladding system – SimplyClad – and its associated training school.’
Confidence in the market is key, says Paul White.
‘It is clear that there is now more confidence in the market than there has been in previous years and our customer base is increasing as a result of our commitment to only dealing direct with the trade, providing quality products and delivering a first class service.’
Paddy McLoughlin, too, is feeling positive. ‘On the basis of most forecasts we do expect to get busier in 2015. There’s no reason why we shouldn’t. I would say we’re certainly more optimistic than we were a couple of years ago.’
However, Richard Bailey sounds a cautionary note. ‘We do foresee business expanding once again next year, but not by a huge margin.
‘We believe that competition will remain fierce and will be doing everything we can to make sure that we provide contractors and retailers with the very best in value and quality.’
This article has been reproduced from the Contract Flooring Journal. You can find them at www.contractflooringjournal.co.uk.