It used to be that folks with gobs of money (venture capitalist, private equity groups, etc.) never ever looked at the flooring industry or any of its many businesses. Flooring was considered a tired, somewhat dull (can you say beige carpet), mature industry with little innovation and profit margins that were so-so. These folks loved new technology companies and niche players that were indeed unique.

But that has changed. We give credit to Mohawk, Shaw, LVT, Lumber Liquidators and Floor and Décor.

Mohawk is our largest publicly held corporation. It is well run, disciplined, profitable and seems to have a Midas touch when it comes to acquisitions. They integrate new brands well and if a brand needs to stand on its own and not become part of Mohawk distribution network (Dal-Tile) Mohawk supports their efforts but does not dictate how they operate. This company impresses many investors.

Shaw impresses investors because Warren Buffet’s company, Berkshire Hathaway, purchased Shaw some time ago. If it is good enough for Warren, as they say, it must be darn good. Indeed.

We cannot overstate the impact of LVT (and all its cousins) on consumers, retailers and investors alike. It was and is the biggest transformative event for our industry in over 25 years and it impresses investors. Not only was it really new but it kept improving, changing and evolving. It started off with some nice bells but now that whole category has bells, whistles, confetti, streamers and way groovy music. LVT is our iPhone and it is not over yet, by far. And the real test is that as a category the margins have not gone down.

What is remarkable about LVT is that it is not entirely driven by brands. It is not as if every consumer comes into the store and know the brand of flooring they want and that applies to LVT, also. No, it is the intrinsic value and style of the product and LVT is great for any end user markets — residential replacement, new homes and all of commercial.

Lumber Liquidators and Floor and Décor received some money from investors early on. They showed investors that there was and is real growth opportunities for flooring retail. For almost 10 years Lumber Liquidators was the darling of Wall Street. The stock went up over 100 points and the reason the stock value dropped by 100 points had nothing to do with the business model but everything to do with their failure to run a squeaky-clean operation.

Now Floor and Décor is the sweetheart of Wall Street. They are super successful and taking business from Home Depot, Lowes, Lumber Liquidators and, to some degree, flooring retailers. Floor and Décor started out as a very unattractive 80,000 square foot store. Many of their first stores were old Kmart stores and they looked like Kmart was still doing the merchandising and display. Not anymore. These stores are very good.

Next, your new friends.

Jonathan Trivers, a regular contributor to Floor Covering Weekly, is also the author of the marketWise section of FCW’s Statistical Report. He can be reached by email at [email protected] or call 541-205-8871.