often imitated, never duplicated

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OFTEN IMITATED, NEVER DUPLICATED

fcnews

2 I August 20/27, 2018

The brand power behind COREtec By Mara Bollettieri

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hat’s in a name?, Shakespeare famously asked. It’s more than a label; it’s about identity, reputation and, ultimately, trust. Not only does a brand represent a company name, but it also represents everything that comes with it and how it distinguishes itself from other products and/or services. COREtec—which has the

power of four strong brands supporting it—knows this all too well. The synergies between Berkshire Hathaway—led by world-renowned investor Warren Buffett—along with the powerful name recognition and stature of manufacturers such as Shaw Industries and USFloors are at the very core of what defines a strong brand in the mind of the consumer. Here’s a closer look at how each brand relates to the other.

USFloors is largely credited with giving the flooring industry its first resilient offering featuring a 100% waterproof rigid core—aptly named COREtec. Launched in 2013, COREtec has not only spawned various iterations within the brand—each successively featuring innovations that aim to improve on the preceding collections—but also imitators looking to cash in on the latest craze. But USFloors is working relentlessly to maintain its leadership position while continuing to evolve the technology, launching successors such as COREtec Plus Premium, COREtec Plus HD and COREtec Plus XL

Headquartered in Omaha, Neb., Berkshire Hathaway holds major shares of numerous global companies, many of which are household names. The corporation also has minor shares in others, namely GEICO, Dairy Queen, Fruit of the Loom, Kraft Heinz, Duracell and Benjamin Moore & Co., to name a few. All totaled, Berkshire Hathaway—which boasts a market value of $491.6 billion—owns more than 60 companies, according to Forbes, which ranks Berkshire first on its America’s Largest Companies list and No. 4 on its list of the World’s Largest Public Companies. Its much-ballyhooed purchase of Shaw Industries in 2000 elevated the manufacturer to an even higher level of prominence. More importantly, the purchase revealed the driving philosophy inherent in Berkshire Hathaway’s investment strategy—it only invests in or purchases companies in which it truly believes makes in impact of the lives of the people who purchase their products.

Shaw Industries, interestingly, also started as a small business. Back in 1946 it operated as the Star Dye Co., which dyed tufted scatter rugs. Fast forward to today, the Dalton-based behemoth manufactures and distributes a host of flooring materials, including carpet, resilient, hardwood, laminate, tile and stone, synthetic turf and more to both commercial and residential markets worldwide.

Warren Buffett

Reverentially referred to as the “Oracle of Omaha,” Warren E. Buffett, CEO and chairman of Berkshire Hathaway, is one of the most successful business investors in the world. One could argue the powerful business magnate is a brand in and of himself. According to Forbes, the 87-year-old investor is currently worth $82.7 billion. In 1962, at the age of 32, Buffett decided to invest in Berkshire Hathaway, a textile manufacturing firm that was on the decline. By 1965, he was in control of the company and changed management completely. This allowed him to make it the foundation of the holding company that it’s recognized for today. Buffett heralded the success of USFloors in Berkshire Hathaway’s 2017 recap letter to shareholders. “USF’s managers, Piet Dossche and Philippe Erramuzpe, came out of the gate fast, delivering a 40% increase in sales in 2017, during which their operation was integrated with Shaw’s. It’s clear we acquired both great human assets and business assets in making the USF purchase.”

The company, led by Vance Bell, chairman and CEO, has around 20,000 associates globally and generates nearly $6 billion in annual sales. Along the way, Shaw Industries expanded its product portfolio via both investment and acquisition, picking up venerable brands such as Evans & Black, Queen Carpets, Dixie Group, Anderson Hardwood Floors and, more recently, USFloors. Since that time, the company purchased Scotland-based carpet tile manufacturer Sanquhar Tile Services (STS), thereby expanding its global footprint.

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August 20/27, 2018 I 3

Leadership + vision = winning hand Synergistic relationship benefits Shaw, USFloors

A Shaw worker at the $130 million resilient manufacturing plant in Ringgold, Ga., which will provide support for both Shaw and USFloors.

By Ken Ryan

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SFloors’ first-mover advantage in the then-nascent waterproof composite flooring category five years ago staked the company to a big market share lead in what is today a still blazing hot segment. That COREtec still maintains its upward trajectory is due in no small part to Shaw Industries, which acquired USFloors in the fall of 2016 and has provided significant resources ever since. For one, Shaw’s scale has helped fuel COREtec’s continued ascension in the

“

sition in the rigid LVT category,” Dossche ket,” Baucom explained. “Shaw’s operational stated. “USFloors has maintained our idenexcellence and tradition of success completity as a fast mover and creative company ment USFloors’ insight and visionary apwithin this partnership, benefiting the proach to rapid product development in the growth and financial composite core category.” performance of USTo support USFloors’ immense growth The strong resources available Floors. This has furand drive future innovation, Shaw has proat Shaw and the unwavering ther strengthened vided valuable infrastructure and resources. support from CEO Vance Bell relationships with This includes a $130 million investment in its to every Shaw associate has our retail partners.” resilient manufacturing facility, called Plant Shaw Floors has RP, in Ringgold, Ga. Shaw started making enabled us to expand upon been a considerable LVT in this plant in 2016 in what was origiour leadership position in the player in the waternally a $100 million investment. In August rigid LVT category. proof rigid vinyl cat2017, the company announced the comple—Piet Dossche, president of USFloors egory with its tion of a $30 million investment to manufacand executive vice president Floorté brand, which ture composite core LVT—WPC and rigid of hard surface, Shaw many observers esticore products—for Shaw and USFloors. mate to be the No. 2 The investments are paying big diviWPC/SPC space. “Eighteen months into the brand in the segment. Together, the brands dends. “Both companies are focused on inacquisition, we are on track for a second year are that much more formidable, according to novation, style and sustainability leadership,” of double-digit growth,” said Piet Dossche, Tim Baucom, executive vice president, Shaw Baucom stated. “With this strong partnerpresident of USFloors and executive vice residential division, who cited the synergy ship, consumers have more options than ever between the two companies as a catalyst for president of hard surface for Shaw. “Without for the most durable, design-forward regrowth. “[Shaw] welcomed Piet and his talthe support of the entire Shaw organization, silient and hard surface products available.” Both executives agreed this would have been a much that combining USFloors’ more challenging, if not imBoth companies are focused on sales strategy, product develpossible, goal to achieve.” opment and brand building USFloors’ ability to exeinnovation, style and sustainability with Shaw’s knack for prodcute on its aggressive expanleadership. With this strong uct development and execusion strategy has been greatly partnership, consumers have more tion has proven to be a strengthened by Shaw’s strong options than ever for the most winning combination for management team and wealth durable, design-forward resilient and of expertise in every aspect of flooring dealers and their hard surface products available. the industry and its range of customers. “We are accelerating the channel. Furthermore, US—Tim Baucom, executive vice president, momentum in fine tuning Floors has also benefited from Shaw residential division the organization and develShaw’s financial strength and logistics and distribution netoping the next product catented USFloors team because they have been egory to continue to grow USFloors,” work to support the growth of COREtec. the fastest-growing company in the fastestDossche explained. “Without the strength “The strong resources available at Shaw growing segment of the flooring business— and the unwavering support from CEO and support of Shaw, this aggressive growth and that afforded us substantial opportunity Vance Bell to every Shaw associate has enwould have stayed merely a dream rather for growth in this rapidly developing marabled us to expand upon our leadership pothan the reality it is today.”

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4 I August 20/27, 2018

2013 2014

Timeline of innovation Leading the pack t’s not easy climbing to the crest of a mountaintop when all the hikers following you are nipping and clawing at your heels. That’s the position that USFloors— maker of the breakthrough COREtec line of waterproof, rigid core resilient flooring products—finds itself in as it simultaneously moves to improve on the technology it created while fending off competing and often cheaper, inferior products. The primary strategy to achieve this goal, according to Piet Dossche, president of USFloors and executive vice president, hard surface, Shaw Floors, entails an aggressive approach to ongoing product innovation. “Being the original gives you a tremendous opportunity as well as a big responsibility. We have to make sure we maintain the standards while pushing forward with design, creativity, innovation and training. Leadership requires a commitment— not just to the company but the category as a whole.” It’s a strategy that’s not lost on dealers who stock the product. “USFloors has done an excellent job in their merchandising and branding through their displays in telling the waterproof story behind COREtec,” said Eric Langan, owner of Carpetland USA, Davenport, Iowa. “This has positioned them as one of the leaders in the WPC product category.”

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Since the launch of COREtec several years ago, the product has undergone a gradual evolutionary process with each successive iteration seeking to improve upon the previous one. Following is a snapshot of COREtec’s trail of progress:

2018 USFloors announces plans to introduce COREtec Stone, a composite/SPC engineered tile featuring a proprietary coating to prevent scratching and abrasions. COREtec Plus Premium, a 12mm-thick offering, makes its debut.

2015

2016

2017

COREtec enters European market via USFloors International, headquartered in Belgium.

USFloors unveils COREtec Plus Design, a collection of multi-tone/ multi-width planks and tiles.

USFloors takes home the FCNews Award of Excellence honor for the WPC/rigid core category.

FROM ONE…

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August 20/27, 2018 I 5

USFloors enters luxury vinyl flooring category with the launch of patented COREtec Plus.

COREtec Plus earns GreenGuard Gold certification for indoor air quality.

USFloors rolls out COREtec Plus XL.

U.S. Patent #9,156,233 granted for COREtec engineered luxury vinyl flooring. The following year, Patent #9,234,357 expanded protection to include any and all plastic composite cores regardless of additives or filler content.

USFloors launches COREtec ProPlus and ProPlus Enhanced for lightcommercial and heavy-duty applications.

…SPAWNS MANY COREtec COREtec COREtec COREtec COREtec COREtec COREtec COREtec COREtec

Plus Plus HD Plus Design Plus XL ProPlus Premium Enhanced XL Enhanced ProPlus Enhanced

Preserving profit margins eeping specialty floor covering retailers and distributors excited about red-hot product categories such as waterproof, rigid core vinyl floors requires much more than periodically launching new SKUs and collections with clever, flashy names. Maintaining profitability for partners across the supply chain is equally important. “COREtec is the original WPC, and as a company we have to continue to uphold the integrity of the category for all concerned for the sake of long-term viability,” said Piet Dossche, president of USFloors and executive vice president, hard surface, Shaw Floors. “Since the beginning, we have always been conscious that profitability for dealers and distributors in the category needs to remain. There is lots of competition, and with that comes price pressure. But we have always kept the integrity high so our customers can make money.” COREtec dealers recognize this and applaud USFloors’ intent to not let their proverbial guard down in the face of intense competition—despite the sizeable head start. “It seems like everyone has a WPC or SPC product nowadays, but only a handful truly get the style and design side right,” said Bob Dolan, vice president of hardwood, vinyl and laminate, Avalon Flooring, Cherry Hill, N.J. “COREtec continues to push the envelope, and it leaves many other suppliers constantly playing catch-up.”  

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6 I August 20/27, 2018

marketing

Making COREtec a consumer brand By Lindsay Baillie

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sk anyone in the flooring industry, “What is COREtec?” and you’ll likely receive an answer that contains some, or all, of the following words: “Piet Dossche,” “USFloors,” “first WPC,” “Shaw Floors.” Seen as the WPC flooring that took the industry by storm, COREtec is a well-known product amongst the flooring community. While manufacturers, dealers and other

industry members know the product by name, COREtec is pushing its boundaries and working to strengthen its consumer awareness—establishing itself as a brand via various avenues such as digital marketing and social media. Piet Dossche, founder and president of USFloors, and executive vice president of hard surface, Shaw Floors, sat down with FCNews to talk about how COREtec is working to establish itself as a consumer brand and what that means for flooring dealers.

The COREtec brand has evolved to the point where many consumers are asking for it by name, retailers report.

Retailers buy in

Education benefits retailers and consumers alike

Deb DeGraaf, co-owner, DeGraaf Interiors, Grand Rapids, Mich., has embraced USFloors’ marketing message. “They have the best ad content I have seen in years. The images of the dog implying the unexpected will always happen are priceless. Ad copy like this will certainly grab the consumer’s attention, and we hope they ultimately end up in our retail store locations.” A.J. Boyajian, co-owner, A.J. Rose Carpets & Flooring, with three locations in Massachusetts, continues to reap the rewards generated by USFloors’ marketing and advertising efforts. “More people are coming in asking specifically for COREtec,” he explained. “At first people would ask about LVT and not be as brand specific, but that has changed in the last year or so. It seems as though the brand is growing on consumers each passing year.”

“Any new category will have a product or brand leader,” Dossche stated. “As a brand and a product innovator, we have a responsibility to educate everyone about COREtec. We are guiding dealers in terms of style and design as well as maximizing margin opportunities.” But it doesn’t end there. “Brand creation also entails taking responsibility on behalf of the industry and the cate-

gory to help guide recognition for consumers so they know there is a brand out there that stands for innovation, quality and credibility,” Dossche added. “If all the other products are then associated with that brand, then everyone will benefit from it.”

Follow the opportunities USFloors is leveraging key social media channels, including Houzz and Pinterest, as a means to interact with influencers in the market. The company is also eyeing opportunities with home improvement cable television networks such as HGTV to strengthen awareness of the brand. “Our main focus is to work with social media because we see an opportunity there to get the brand out and gain awareness faster in the market,” Dossche

explained. “We also launched the coretecfloors.com website, which is very supportive of what we want to achieve. Putting ourselves in front of consumers with social media is the key. Also, working with the search engines to make sure our name and product gets on the first page of searches.”

Shaw alliance raises the stakes “When we first started the category, I think we did a very good job of getting things going,” Dossche recalled. “When we joined Shaw at the end of 2016, they saw what we were doing and said we should join forces because they could help us accelerate this growth. With the support Shaw provided not only financially but

in terms of distribution, logistics and marketing, we can take it to the next level. By joining forces with Shaw, the resources and expertise within the company has been a great asset.”

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August 20/27, 2018 I 7

testimonials

Dealers bask in glow of COREtec’s success

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David Chambers director of flooring Nebraska Furniture Mart Omaha, Neb.

Mike Foulk owner Foulk’s Flooring America Meadville, Pa. “Our COREtec market continues to be strong. People look at the other brands but seem to go back to COREtec because of style, color and quality.”

vice president of operations Atlas Carpet One San Antonio “Our COREtec sales have continued to rise, which is surprising considering the drastic increase in competition in the category from a year ago. Shaw and USFloors have done a great job establishing COREtec as the brand name consumers ask for when looking for a WPC floor. In addition, there is a good range of price points and quality levels available in the entire COREtec line, which means there is something for everyone.”

hen USFloors’ COREtec debuted five years ago, the flooring industry was just emerging from the Great Recession and needed a product to jump-start the recovery. The waterproof composite flooring segment has indeed reinvigorated the flooring market, and COREtec continues to be its leading player with 10 collections and hundreds of SKUs. Flooring dealers shared some of their COREtec success stories with FCNews.

“The COREtec brand is performing well, and we continue to see nice sales growth in all of our markets. We believe it is because of their on-trend visuals and product quality. Their designs are exactly what the customer is looking for while also providing them with peace of mind with a great performing product and a very low claims rate.”

Billy Mahone III

Eric Mondragon hard surface buyer RC Willey Home Furnishings Salt Lake City “The COREtec brand continues to be the leader in WPC sales in my market, up 36% over last year. They have a proven track record. My RSAs are confident in selling the product, my installers are comfortable installing the product, and they can offer product at all levels of the WPC category. Plus, I have some exclusivity with the NFA Lifetime Luxury colors.”  

Bob Dolan Eric Langan owner Carpetland USA Davenport, Iowa “The COREtec brand continues to perform very well in our stores, and sales are up vs. last year. A lot of our salespeople really enjoy selling the product and go to the COREtec rack first when showing the WPC product category.”

VP of hardwood, vinyl & laminate Avalon Flooring, Cherry Hill, N.J. “We continue to see strong growth from the COREtec family of products because there is such strong brand awareness among consumers. This year there have been a number of new lines introduced, and they are all performing very well. COREtec continues to drive the category for dealers because of the high style and design offered within their product line.”