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New Co-CEO Just One Addition At CCA Global

BY Kate Fazzini

On the heels of its divisional winter conventions, flooring giant CCA Global Partners announced a major executive appointment sure to make spring a season of change.

On Jan. 18, the conglomerate that includes member-owned banners Carpet One Floor & Home and Flooring America announced Rick Bennet would take over as co-CEO at the company’s St. Louis-based head quarters. The company looked outside the CCA Global net work for Bennet, a veteran of some of the country‘s biggest department store names.

Bennet served with May Department Stores for more than 27 years, as president and CEO of Famous-Barr department stores and later president and CEO of Kaufmanns. Bennet later became vice chairman of May.

“I have gotten to know Rick very well. He is a strategic thinker, tactical operator and a developer of people. He has earned my absolute confidence and trust,” commented Howard Brodsky, chairman and co-CEO of CCA Global Partners.

Trust will be of the utmost importance in this partnership—Ben net will take on the role last held by Alan Green berg, Brodsky‘s long time close friend, with whom he co-founded CCA Global Partners in 1984. Greenberg died in August 2007 after a battle with cancer, following a career in the flooring industry that spanned nearly 40 years.

The tone of the Carpet One winter convention, held Jan. 10 to 12 in Houston, was focused on coping with a difficult sales environment and marketing efforts to reach a savvier consumer audience. Like all home improvement retailers that specialize in major purchase items, Carpet One faces the challenge of grabbing consumer attention.

“ It’s pretty doom and gloom out there,” said Carpet One chief operating officer Eric Demaree, specifically referring to the retail climate as portrayed in the media. But Demaree went on to say that he’s heard a great deal of optimism in the field, and iterated a company policy to help member-owners facing financial difficulty.

“ Let us know [about financial problems] so we can work with you and we can help you,” Demaree said in his address to members.

Mark Stinson, owner of Stinson Carpet One Floor & Home, said that in light of the downturn, “Marketing efforts need to be more attuned to the [consumer].” Many customers are weighing their options, he said,“ Do we buy flooring? Do we go on vacation? Do we upgrade our entertainment center?”

In response, Carpet One unveiled a new marketing campaign featuring Amy Wynn Pastor, who was the carpenter for reality show “Trading Space s” and has an upcoming home improvement program on the DIY Net work called “Make a Move.” The reality show tie-in speaks to Carpet One’s “core consumers,” specifically, upper-middle-class women, said Carpet One president Evan Hackel.

Carpet One executives also announced two new programs at the group’s general session, held Jan. 11. The company said it now will offer a trademarked “Beautiful Guarantee”—a warranty option for upper-level carpet and flooring products that includes reinstallation costs of a project if a consumer is dissatisfied.

Additionally, the company announceda planned “National Green Select Day ” on April 19. Carpet One members will have the option of choosing an environmentally themed cleanup project in their hometowns. The project is meant to involve community members in a “grass roots” green movement, said Demaree.

“Green” has been an on going topic at CCA Global’s conventions in terms of product selection for some time. But in practice, individual stores have experienced differing demand for green flooring materials.

For example, while Gayle Selden of Ed Selden Carpet One has seen an up tick in natural cork purchases—“We used to do about one job per year, and we had five just this past year,” she said—other stores haven’t experienced the same demand. Jolene Tupper of nearby Bill’s Design Carpet One in Aberdeen, Wash., said her store has instead seen an increase in sales of “Marmoleum,” a floor covering amalgamation of raw materials like linseed oil and jute.

CCA Global’s other divisions also will see some major marketing changes this year. At its convention, held in Houston just prior to Carpet One’s, Flooring America unveiled a new marketing approach that includes an updated store design.

“Right now, we’re in a very challenging economy for retail in general and floor covering in particular,” said Vinnie Virga, president of Flooring America and Flooring Canada. “We won’t be seeing double-digit growth as we have in the past, and this situation is likely to persist until mid-2009.”

In the interim, the retail group will focus on a more modern store design and commensurate marketing materials. The new store concept, created by Cincinnati-based FRCH, includes an expanded hard surfaces selection area, a large children’s play area and other touches, such as a tile display on tables alongside brightly colored knickknacks.

Time will tell how these upgrades aid the individual CCA Global businesses in the long-term. Most recently, the conglomerate ranked fifth on the Home Channel News Top 500 list of home channel companies, with 2006 sales of $9.6 billion.

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Weyerhaeuser reports loss in fourth quarter

BY HBSDEALER Staff

Federal Way, Wash.-based Weyerhaeuser reported a net fourth-quarter loss of $63 million, swinging from earnings of $507 million in the same period last year. Sales were $3.9 billion, down 23.1 percent from $4.8 billion last year.

For the year, the forest products company had net earnings of $790 million, up 74.4 percent from $453 million in 2006. Sales dropped, however, to $16.3 billion from $18.7 billion last year, a decline of 12.8 percent.

Steven Rogel, chairman and CEO of Weyerhaeuser, characterized 2007 as a “challenging year” and said the company has been implementing ongoing improvements to its packaging business, while implementing “growth strategies” in its timberlands business.

“The continuing erosion of the U.S. housing market created very unfavorable market conditions for our timberlands, wood products and real estate businesses,” Rogel said. “Despite difficult market conditions, which we expect to continue through 2008, Weyerhaeuser remains focused on managing through the downturn.”

The company’s real estate business took the largest hit, with earnings falling 52 percent. Orders were down 19 percent, and the company’s backlog of homes sold, but not closed, dropped 35 percent.

Weyerhaeuser is one of North America’s largest diversified wood products companies.

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NAR weighs in on Freddie Mac, Fannie Mae reform

BY HBSDEALER Staff

The National Association of Realtors has submitted a position to the U.S. Senate Committee on Banking, Housing and Urban Development, supporting increased loan limits in government-sponsored enterprises (GSEs) Freddie Mac and Fannie Mae.

Reform to the two main government-sponsored lending organizations has been a topic of debate in light of the damaged subprime mortgage market.

Proponents of raising loan limits say it is a needed stimulus for the housing market. Opponents say giving the lending organizations a route to the “jumbo” loan market could be dangerous without additional safeguards.

Currently, a cap of $417,000 exists on loans issued by the GSEs. The NAR and other proponents of the stimulus plan support raising the GSE lending limit to $625,000.

The NAR submitted testimony to the HUD committee saying, “Fannie and Freddie are our partners in the housing industry and are important to stabilizing and strengthening the housing market.”

The group said the package could help “as many as” 500,000 jumbo loan borrowers to refinance. Additionally, the NAR says a higher rate limit could allow a large number of borrowers to enter the home buying market.

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