HLC Summit: Change Comes Fast for ‘Nimble Giant’ Haines
from Floor Covering News, Volume 33, Issue 22
CHARLOTTE, NC, April 24, 2018 – Change may be inevitable, but the pace of change occurring at Haines in the past two years—all aimed at delivering a strong, stable, scalable and sustainable platform to the flooring market—has been downright dizzying at times.
As Michael Barrett, president and CEO, told FCNews, “If you are standing on the sidelines, you can’t make sense of all the changes. What we’re going through is complicated, complex—a [range] of complexities. We’re waging war on complexity. It’s a challenge, but it’s all about improving the customer experience.”
The April 8-10 meeting—technically the Northern Summit—was held in Charlotte, the southernmost point for this show in the distributor’s history. Charlotte was symbolic for a few reasons: Haines’ market presence is running deeper in the Carolinas; Charlotte is near to its spanking new main distribution center; and Charlotte is also home of the NASCAR Hall of Fame. So it was appropriate that Rusty Wallace, former driver and NASCAR Hall of Famer, was the keynote speaker.
As both Wallace and Greg Vale, senior vice president of sales for Haines, pointed out, there are similarities between NASCAR and Haines’ trajectory. Both organizations have evolved from their roots; NASCAR’s history dates to Prohibition when runners—people who delivered moonshine—souped up their cars so they could outrun the feds, to today’s aerodynamic and technical marvels. Haines has evolved from a Maryland-based distributor serving the Mid-Atlantic to the largest wholesaler in flooring, with revenue double the size of the No. 2 player and a footprint the length of the East Coast. “We are evolving and our ability to adapt has helped our customers adapt,” Vale said.
The newest piece to Haines’ growing business is the Concord hub, which replaced the old CMH Wadesboro, N.C., as the central station for products. The 500,000-square-foot facility can store 250 trailers and has 33,000 primary storage locations. Haines’ ultimate goal is to provide next-day delivery to any customer in its network. Currently, next-day delivery is at 85%. As Barrett explained, “A lot of distributors can offer next-day delivery but in small increments. We want to do it across 15 states. Nobody else can do what we can do given our portfolio size.”
Barrett took over as president and CEO of Haines about 15 months ago. He is one of several new or elevated members of the executive team who are tasked with transforming a $500-million distributor into a nimbler giant. “We have to go faster, and our team has embraced that. We’re focusing on customer facing improvements, better inventory planning. Our technology is aimed at improving customer-focused systems. We’re looking at the bottlenecks in our processes to make it easier to do business with us. We want to be the best at customer focus. We’re not there yet, but we feel we are further along the road now.”
In the past year, Haines has built out its executive team, brought on a finance/supply chain analytics team and an HR squad to improve effectiveness of people in the organization. It also has a new IT staff to help manage the business.
On the transportation side, Haines has completed phase two of its optimization, which is to have JB Hunt handle outbound delivery.
There were also external moves. Late in 2017, Haines formed a strategic alliance with top-5 distributor Belknap-White Group. Belknap became a minority stakeholder in a collaborative arrangement that will open doors for both companies. In early 2018, Haines executed an agreement with long-time supplier Armstrong to expand distribution coverage in the South and East.
“This business is transforming with lots of changes in the past year and more to come,” Barrett said. “Some moves are necessary to become more scalable and sustainable.”
Long-time Haines Loyalty Club retailers were supportive of the moves. “Haines has made some good decisions over the last several years,” said Ryan Commerce, owner of Indoor City, a Lancaster, Pa., flooring dealer, who has been with club since the beginning. “When you double in size following the CMH acquisition, you are going to struggle to combine those resources. I think they have cleared those hurdles and are on the other side of that. The mass and scale they have will provide value for everybody up and down the chain.”
For other dealers, it is about the bottom line. “I couldn’t ask for more from this group,” said Rob Smith, owner of RPS Carpet & Floors Wholesale, Baltimore. “Last year we were up 20% and I get great backing from their reps who support my business very well.”
Bill Zeigler, co-owner of Charles F. Zeigler & Sons, Hanover, Pa., added, “Considering the low cost, benefits and huge portfolio of products offered by Haines, there isn’t any program in the industry that compares.”
Haines Loyalty Club retailers and some suppliers were happy with the news that starting in 2019, Haines will have one summit. It will be held March 14-15 in Savannah, Ga. In the past, Haines has held a Northern Summit (usually near Baltimore-Washington) and a Southern Summit in Orlando. The Savannah summit will be held at the Westin Savannah Harbor Golf Resort & Spa and is positioned as a destination with more entertainment added. “I think that is a really a smart move, a great idea,” Commerce said of the single event. “Hopefully it will allow them the resources to provide even more for their members.”
John Himes, president of Wood Flooring International, said that as long as the Loyalty Club members attend, he’s all for the one summit. “To get in front of their customers is the goal, so if we can do it one set-up, so much the better.”