Mohawk sharpens game plan
GDA Staff -- Gifts & Dec, October 19, 2007
Calhoun, Ga. – Mohawk Industries’ soft flooring segment, Mohawk, was not a strong performer for the company during its just-ended third quarter. “We didn’t do as well as I’d like to do on the Mohawk side,” said chairman and ceo Jeffrey Lorberbaum, who cited a “challenging environment” for the division, with industry units off by about 20% from their peak.
But the division has potential, he said, emphasizing the company is taking steps “to get it where we’d like it to be.” Elements of the plan include:
Carpet price increases. “There is a higher level of promotions and pressures on commodity products in the industry,” said Lorberbaum, noting, “Our raw material costs stabilized during the third quarter -- and remain difficult to predict.”
Shutting facilities, including a staple yarn plant and a tufting plant – “because of shifts in demand and cost reductions.”
Accelerating introductions in key categories and focusing sales and promotions efforts on more promising areas as multi-family, higher-end replacement and commercial.
New trademarked Mohawk SmartStrand carpet featuring DuPont Sorona corn-based polymer – “an additional feature that adds value to the already successful Premium collection,” Lorberbaum said.
Exiting from its flat-weaving business, which was primarily used to make throws but also to manufacture decorative pillows, some blankets and other home textiles accessories.
On a related note, when asked by an analyst about the Mohawk segment’s current yarn mix versus a year ago, Lorberbaum said, “The nylon filament and polyester categories are doing better, and polypropylene and staple nylon are doing worse.”
Mohawk Industries reported net earnings of $122 million for the third quarter, down 4.7% from $128 million from the same period one year ago. Sales fell 4% to $1.9 billion.
Year to date, earnings of $328 million were up slightly from $326 one year ago. Sales were off 4% to $5.8 billion.
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