Galleher LLC, founded in 1937, and based in Los Angeles, California, is an industry leader in the design, manufacture and distribution of residential and commercial flooring products. With 400+ employees and 35 locations across seven states, It’s one of the top three wholesale flooring distributors in the U.S..
What is your 20 thousand ft view of the commercial flooring industry today?
It’s been a roller coaster, for sure. Like many industries, COVID has had a negative impact – projects have been put on hold, a shift in how we all conduct business, and sales down about 20% in the commercial flooring segment.
An ongoing challenge in the industry is the supply side. Lumber for hardwood flooring, for example, has been impacted by harvesting and sawmill shutdowns. This created a large temporary void in the raw material pipeline. On the resilient side of the business, container and vessel space shortages and backups at U.S. ports have also been huge issues.
While the impact of COVID is slowly showing signs of improvement, the trickle-down effects of raw material availability, worker shortages, shipping delays and price increases continues to negatively impact the industry’s inventory position, making it difficult to meet demand in the short term.
What has Galleher done to offset some of these supply chain issues?
Like all industries, COVID has had a significant impact on the supply chain for commercial flooring and created sort of a “perfect storm” of supply chain challenges and cost increases.
Initially, people were really scared that the lock downs would be severe and we might face a prolonged recession. Some of our competitors began scaling back on inventory and canceling purchase orders almost immediately. But we gathered the team, talked it over, and decided to bet on our belief that things would bounce back quickly. We kept our supply chain humming and significantly bulked up on inventory, believing that when things reopened, there would be a lot of pent-up demand. We’re so glad we made that move.
Long term, we’re being proactive by diversifying our sourcing across different regions of the world to protect ourselves from supply chain instability. We were too dependent on China. Not anymore. We’ve moved into other countries and domestic factories. When the anti-dumping tariffs and trade war hit, we were fortunate enough to come out relatively unscathed because we had already diversified. Through the pandemic, this strategy kept us nimble, connected and most important, helped us maintain strong inventory levels. If we did experience a stock out on an item, in most cases, one of our partners had something equivalent or similar to offer the customer.
"We kept our supply chain humming and significantly bulked up on inventory, believing that when things reopened, there would be a lot of pent-up demand. We’re so glad we made that move."
When will the commercial flooring business bounce back?
We are optimistic about the future for commercial flooring. While we are closely watching the spread of new Covid variants, we are optimistic that more people are becoming vaccinated and getting back to a more “normal” life. We are also keeping a close eye on Covid spread worldwide and the potential impact to our supply chains. Nonetheless, we believe renovations and flooring projects that were delayed and canceled will begin to fire back up at the end of 2021. Better yet, we expect a solid rebound in early 2022 and into 2023 as the supply chain begins to align more closely with demand.
What are the major design trends you are seeing in commercial flooring sales?
COVID-amplified design changes that were already in development, including a need for more flexibility in designing spaces and even more focus placed on creating a healthy
environment. A key product segment that is benefiting from both changes is in the Rigid LVT category, which is increasingly being used as an alternative to carpet. That’s because they’re more durable, easier to maintain and they’re more naturally hygienic. Simultaneously, we are seeing a desire to incorporate natural looks to create more harmonious, less sterile environments.
The realism of these new LVT/Rigid floors is unbelievable. And with an ever-expanding selection of patterns, colors and textures, designers have more options than ever before to provide a gorgeous floor that looks like wood or stone but
"we are seeing a desire to incorporate natural looks to create more harmonious, less sterile, environments"
wears better and costs less. This is still a relatively new flooring category and the technology and materials used to create these floors is getting better and better every day. We are investing heavily by not only staying at the forefront with new offerings but also broadening our designs to offer designers a rich palette so they can always exceed client expectations.
What are the industry inicators that give you confidence?
"There are several encouraging indicators. The American Institute of Architect’s Billing Index has reversed its negative trends. In fact, it’s showing positive increases for the first time in a year: non-residential and institutional building projects were up over 13% early in the year, and commercial projects were up over 11%, driven by increases in all key segments. These trends, coupled with the slow reversal of the global supply chain challenges we’ve all faced over the past year, allow us to be cautiously optimistic about the business growth over the next several years."
Can you talk about Galleher’s commitment to the commercial flooring market?
As a full-service distributor of flooring products and services for the residential and commercial segments, we recognize the growing importance of the commercial segment to our industry. As a result, we are aligning our products and services to provide our commercial customers with everything they need.
We are adding to our team of experts, particularly designers and commercial segment specialists. Plus, our full-service tools and sundries business allows Galleher to be the single source for commercial flooring design and installation.
The “Galleher Promise” is our commitment to do whatever it takes to help our customers complete their project — so they can keep the promises they’ve made. Our updated website (www.galleher.com/commercial) highlights our commitment, our team and our industry expertise.
