published Sunday, October 14th, 2012

Sherwin-Williams exec sees trends in recovery

Single-family housing could be making a comeback, says Keith Ruggieri, director of floorcovering at Sherwin-Williams.

"The market is still very strong in the multifamily segment, and we're starting to see that the single family market is starting to come back strong," Ruggieri said.

He should know.

When most people hear the name Sherwin-Williams, they think only of paint.

But the company is also the largest U.S. purchaser of flooring in the multi-family market, Ruggieri said, a commodity that closely tracks the rise, fall and subsequent recovery of the housing industry.

Sherwin-Williams buys an estimated 13 to 14 percent of the carpet, vinyl and wood flooring sold in the rental market across the U.S., bringing in earnings of $442 million on sales of $8.76 billion in 2011 from its combined flooring and paint operations.

When a tenant moves out of an apartment, the landlord often calls Sherwin-Williams to give the unit a fresh coat of paint and new flooring. The company arrives within 24 hours to install new floors. As soon as the paint is dry, the space is ready for a new tenant.

Special machines in the company's 120 facilities are programmed with the measurements of every apartment throughout the region. With a few hour's notice, the machine custom-cuts the flooring material in the correct shape to quickly lay down onto the floor.

Though times are good right now, it wasn't so long ago that overbuilding and an economic crash led to a downturn in the multifamily market -- which includes apartments, duplexes and other housing types outside of the typical single-family home.

But now, high occupancy rates across the nation are leading landlords to pay for capital improvements and raise rents, Ruggieri said. The company is putting its money where its mouth is, and is hiring new sales staff across the country.

"A few years ago when we had a big downturn on multifamily, nobody was spending any money on picking up their properties," Ruggieri said. "The big boom right now is going to continue into 2014, when they're going to see us at historic highs in deliverable units."

What that means is that on top of a 26 percent increase in building permits for multifamily units this year, and hundreds of thousands of new permits in 2013, market watchers expect an additional 16 percent increase in building permits for 2014, he said.

"Historical highs were more than 300,000 units in terms of new construction permits," Ruggieri said. "With those new properties coming onboard, the properties that are already existing are going to have to keep up with the Joneses and keep on making improvements."

Though not a huge jump, the apparent decrease in available foreclosed properties is leading to increased new home construction, confirmed Kim Gavin, editor of Floor Covering Weekly.

"It's not a huge jump, but housing is up, permits are up, multifamily is very strong and people are looking to form households," Gavin said.

Home decor trends

New housing booms bring new decorating trends, and this one is no exception.

Apartment owners are upping their usage of increasingly realistic vinyl flooring, which can resemble high-end tile or wood plank floors.

"There are some visuals on these vinyl planks that look just like wood except it doesn't creak," Gavin said. "The property managers are saying they're able to increase rents to their tenants because of that look."

It also lasts longer than the carpet it's replacing, Ruggieri said.

Vinyl flooring is indeed taking market share from carpet at an accelerated pace, said Kemp Harr, publisher of Floor Focus Magazine.

"In the past when you put vinyl down, you knew it was plastic flooring," Harr said. "Now, it looks more realistic than it ever has."

To be sure, workers are still installing plenty of carpet.

"They're still putting carpet in the more intimate areas like bedrooms and dens, but they're putting vinyl down in down hallways and traffic areas," Harr said. "The early indications are, it performs very well."

No matter what customers want, Ruggieri says that the key to success is being willing to do whatever the customer asks — and doing it fast.

"We also have a pretty strong presence in the health care industry, the assisted-living side, and we'll do commercial," he said. "We'll do anything."

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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