Washington, D.C.—Ian Newton, Flooring 101 and current president of the National Floorcovering Alliance (NFA), along with the entire executive board, was re-elected to serve another two-year term at the group’s fall conference here Oct. 27-29. The board also includes David Chambers, Nebraska Furniture Mart, vice president; Jessica Arscott, Floortrends, secretary; Susan Hadinger, Hadinger Flooring, who becomes treasurer at the end of the year; Scott Browne, Macco’s Floor Covering Center; and, Dave Cometz, General Floors.
“When I became president, I had a brand-new executive board, and we accomplished a lot, especially at our first meeting dealing with some membership challenges, bylaw changes and some structural changes within the NFA,” Newton said.
The biggest bylaw change is what was informally referred to as the “one and done” rule where NFA positions members for success a prospective member needed unanimous approval from membership to be voted into the group. In other words, any one member could block a potential member from joining. Now it takes five “nos” to block that member. “That was the biggest change I think this group has seen in many years,” Chambers said.
While some may see that as merely a formality, Chambers said this will one day come up as the NFA continues to look at prospective members. “We’re going to be challenged to think in different ways for the future. I think that bylaw change was a great first step.”
Another recent bylaw change focuses on succession. In the past, any transfer of ownership beyond immediate family would trigger a re-application process. But as longtime NFA members approach retirement, not all can pass the business to a son or daughter. Some have looked to nieces and nephews, as Sam and Margie O’Krent did with nephew Jason O’Krent to secure a fifth generation running the business. “We changed it up regarding change of ownership, going from just immediate family to more extended family,” Newton explained. “They could [remain in the NFA] without notification and not having to reapply.”
Chambers said he believes these changes were necessary. “The board pushed some necessary bylaw changes to help the group become more stable and innovative for the future.”
Looking forward, Newton is setting his sights on increasing profitability for membership. How does that occur? It begins with the suppliers. “The board does a lot of work with the vendors as far as pushing them to bring more things to the group, more opportunity, more exclusive products, more diversification on products,” he explained.
It continues with technology and solutions, according to Chambers. “We had a great presentation [from Roomvo] on AI and the crucial things every The NFA held its fall conference here in Washington, D.C. member needs to be adding to their business to remain relevant,” he said. “I think membership can benefit from us trying to bring more things collectively in that realm. We saw some things [here] that actually would help reduce expenses for a lot of members through automation.”
Specifically, Pawel Rajszel, CEO of Roomvo, showed members several ways they can increase productivity by using AI. For example, ChatGPT. “Retailers can use that for any type of marketing-related content, communications, summarizing materials and documents,” he said. “Also, our AI chatbot received a lot of interest. This goes on a retailer’s website, never sleeps and knows everything about their business. It’s great for consumers to ask questions.”
Rajszel also discussed a new feature called Roomvo Studio. “Retailers don’t have sufficient marketing content for their SKUs,” he explained. “With Roomvo Studio, we can create high-quality, highly engaging content for every SKU at scale.”
Business in 2024
Whether you’re one of the top retailers in the country or a mom-and-pop shop in Smalltown USA, business in 2024 was not without its challenges. Inflation and interest rates can severely impact the flooring business. So how have NFA members fared in 2024 vs. the entire industry? Overall, the consensus was that NFA members are either flat or slightly up as a group.
“When you look at the economic conditions and the headwinds consumers face when they’re turning on the news or opening up any type of media, they’re a little more reluctant to spend some of those dollars,” said Scott Browne, Macco’s Floor Covering Center. “I don’t think the customer looks at it and says, ‘I’m going to buy the cheapest stuff out there because I’m being conservative about how I spend.’ I think they’re looking at finding a full-service specialty retailer that offers the most value, and in most of our marketplaces that value proposition is at an NFA dealer.”
The feeling is that inflation increasingly impacts the lower- to mid-range consumer, thus it’s the higher-end customer that’s driving business right now. As a result, NFA members say they are seeing fewer customers but bigger tickets. “We are seeing more buyers and fewer tire kickers coming into the showroom,” said Ian Newton, Flooring 101. “So our salespeople may feel like it’s slow, but the numbers are still there. We’re selling bigger-ticket items.”
Browne agreed that it’s the high-end consumer who’s shopping. “When you look at interest rates being where they’re at today and housing starts and housing turns being way down, it’s affecting our business, so we have to look at that customer who has more discretionary income.”
Why are NFA members outperforming the overall industry? The easy answer is most NFA members are the leaders in their respective markets. “I think those who are buying right now look for the reputable company in their market, and most of the members in this group are probably the reputable company in their market,” said Jason Waggoner, ICC Flooring Plus.
Trusted and more relevant, according to Newton. But an NFA member is also often better capitalized than the average flooring retailer. “When the market gets tight, the consumer tends to go to the dominant retailer in that market, the one that’s advertising. Most of our members don’t cut their advertising budget. Usually they increase it when things get tight.”
Another key factor driving NFA members’ performance in challenging times is diversification, according to Browne. “Most of us are involved in multiple segments of the business, whether it’s multifamily, new residential, commercial, replacement remodel. You have that opportunity to say, ‘Listen, commercial’s up, retail’s a little off,’ but you’re still sitting in a pretty solid spot.”
Projections for 2025
NFA members are expecting a better year in 2025, although most agree it will take a few months to build momentum. “We’re pretty bullish on 2025,” said Scott Browne, Macco’s Floor Covering Center, with five stores in Wisconsin. “We’re looking for 10% growth. This year we didn’t see it except through acquisition, but we’re pretty confident that our consumers, our building starts, our contractors we’re dealing with are active and busy—and they’re projecting a good year. It could be a slow first quarter, but I think it’s really going to ramp up in the following [quarters].”
Jason Waggoner, ICC Flooring Plus, agreed. “I think the second half of year will be really good, and that will continue into ’26 and ’27 because there’s too much [pent-up] demand.”
Newton cautioned the real estate market will be a primary factor. “Most of our flooring economies are tied around the real estate market.”
The hope is that the U.S. will follow Canada as it relates to interest rates. “Obviously, we’re a little bit different,” said Jessica Arscott, Floortrends. “We just recently had a rate cut and they’re expecting another one before the end of the year. That will translate into more building activity, which is always a bonus for us. We’re expecting to really see the impact of that in Q2.”
SPC cedes share to laminate, WPC
Like many retailers out there, NFA members are seeing a shift away from SPC toward higher-priced products like WPC and laminate and, in some cases, wood. Product failures with lower-end SPC is part of the reason, as well as the proverbial race to the bottom. But it also goes back to inflation, which has a lesser impact on the higher-end consumer, especially when it comes to disposable income. “We were always a bigger WPC house anyway at Nebraska Furniture Mart, but we’re seeing the shift to laminate for sure,” said David Chambers.
It’s the same for Hadingers, which has also always been “WPC heavy,” according to Susan Hadinger. “We’ve gotten completely away from SPC. Laminate has taken that market share.”
For Flooring 101, Ian Newton said low-end SPC is shifting to laminate, and mid-range SPC is going to WPC.
But it’s not only laminate and WPC picking up share. “We don’t do low-end SPCs,” said Jessica Arscott, Floortrends. “WPCs are popular, but we actually do a lot of 5mm loose-lay product. That’s really popular in our market area.”
Even hardwood is taking some share from SPC. “People are saying, ‘I did it once; I’m going to make a flip,’” said Scott Browne, Macco’s Floor Covering Center. “The mid- to higher-end SPC category isn’t going anywhere, but we got a little bit of a black eye with the ultra-thin products.”
Subtraction and addition
The NFA has lost some quality members over the last few years, mainly due to acquisition. Earlier this year, longtime member Coles Fine Flooring in San Diego announced it was shutting its doors at the end of the year. While no one likes to see a member depart, the NFA board said it has minimal impact from a financial standpoint. “It’s probably more emotional than financial,” said Ian Newton, Flooring 101. “Many members had good relationships with Coles for many years.”
It’s more about the camaraderie as the NFA considers itself a family. “Our numbers are still going in the right direction, so I don’t know that it hurts us financially, but it’s always sad to lose a friend,” said Jason Waggoner, ICC Flooring Plus.
In a perfect world, the NFA will find a suitable replacement in any part of the country where it loses a member, but the group will never chase. Rather, it is paramount that any potential member is the right fit, first and foremost. “We have areas of the country where we don’t have representation, meaning if we lose a member, that’s definitely an area where we open the eyes back up to see what else is there,” said David Chambers, Nebraska Furniture Mart.
Jordan’s Floor Covering, Vancouver, British Columbia, is the most recent retailer to reap the benefits of NFA membership, joining about 18 months ago. “The experience has been great,” said Michael Jordan-Knox, vice president and fourth generation. “Everyone has been super welcoming. We are able to bounce ideas back and forth—the networking has been the greatest advantage. The group has helped us with marketing—and connected us with Mobile Marketing, which has paid dividends for us.”
One prospective member is USA Floors, a dominant retailer in North Carolina that attended this conference on a trial basis. With locations in Raleigh, Durham, Wilmington, Fayetteville and Winston-Salem, USA Flooring is about 55% mid- to high-end retail with the remainder divided among builder, Main Street commercial and wholesale. Kris Lloyd, co-owner, told FCNews he sees value in the NFA. “We really enjoyed networking with these like-minded professionals. We enjoyed learning about best practices. We thought the meetings were efficient. And having quality one-on-one time with the vendors was productive. We’re looking forward to the next chapter.”
USA Flooring also made a solid impression on the NFA. “I think they’re a great fit just from a culture standpoint and what they’re trying to do within the company,” Chambers said. “They have a great business plan. They have an accelerated growth plan, and that’s the member we’re looking for.”
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