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MOHAWK FLOORSCAPES^® CONVENTION EMPHASIZES PROFITABILITY,
POWER OF DEALER NETWORK

Current business conditions make it critical to understand the true profitability of a floor covering store. This is essential for survival.

The Mohawk Floorscapes^® system lets dealers see exactly where their money is being spent, and make immediate adjustments that improve profitability. And for 2008, dealers will be able to compare their stores’ results with the best retailing minds in the business.

PHOENIX (November 30, 2007)--It’s the ultimate business question: Where does your money go?

Research shows that many businesses have little understanding of their actual profitability, and even the savviest of businesspeople feel they could do a better job of managing the bottom line.

This is especially true in the floor covering industry, where most stores are independent and run on a wide variety of accounting and operating systems.

But Mohawk Floorscapes^®dealers are about to get a powerful new tool for measuring profit, one unprecedented in the flooring business. And not only will they understand their own stores better, they’ll be able to see how they measure up with other Mohawk Floorscapes^® stores across the country.

In 2007, Mohawk Floorscapes^® dealers entered a new phase in the development of the store system. In addition to products, merchandising, and promotion, dealers began developing an in-depth analysis of their business operations, working with a new team of Mohawk regional managers to build profiles on operating costs, margins, human resources, and other key business elements.

Almost immediately, many dealers began to see ways to make significant improvements through this newfound knowledge.

Now, Mohawk Floorscapes^® dealers will be able to take this information to a new level. A new benchmarking tool for comparing Mohawk Floorscapes^® dealer financial performance has been created. This tool allows dealers to work around state tax laws and other issues that cause differences in financial statements, and directly compare the operations of Mohawk Floorscapes^® stores in different areas of the country.

The Mohawk Floorscapes^® Advisory Board, a panel of dealers representing regions across the nation, were the first to participate in using this tool.

“The results were remarkable,” said Manny Llerena, Vice President of Retail Marketing for Mohawk. “This benchmarking tool lets dealers see if their approach to the key aspects of their business is the most effective and profitable method. If it’s not, they have the information to identify a better solution.”

Llerena said the ability to compare is like the General Manager of a baseball team being able to look over his competition and understand where his weaknesses are. “If I’m a GM and I can look at the standings and know that I need better left hand pitching, I can solve my problem,” he said. “In the past, a floor covering store didn’t have the information to make these decisions.”

But with the new Mohawk Floorscapes^® benchmarking tool, dealers will be able to directly compare results—with stores that have their same business model and operating structure.

“A dealer will be able to look and see if he or she is paying too much for sales compensation or banking and finance charges. The dealer will then be able to look at the best practices of peers, and know that a solution to a problem has been proven to work. The floor covering industry has never had anything like this, and Mohawk Floorscapes^® dealers will be the first to take advantage of it,” Llerena said.

Mohawk Floorscapes^® dealers will begin loading their 2006 information into the system in late December, with 2007 information being added shortly after the end of the year. The result will be a two-year database that will allow stores to get a very clear picture of the true cost of their operations.

And that, Llerena noted, may be the most valuable element of the Mohawk Floorscapes^® program introduced to date.

In fact, Mohawk is developing a communications network exclusively for Mohawk Floorscapes^® dealers that will allow interaction, provide them with product opportunities, dealer-to-dealer tips, financial specials, and other valuable information.

Building on Key Business Practices

The benchmarking tool is the latest in a year’s worth of work on the business operations of Mohawk Floorscapes^® stores. In the last year, dealers, working in conjunction with their Advisory Board, have established seven key business practices that are designed to help stores better use technology, branding, and the core principles of the Mohawk Floorscapes^® concept.

Mohawk Floorscapes^® dealers’ Key Business Practices include:

1.  Participation in convention to take advantage of networking with their peers.

2.  Using the educational resource provided by Mohawk University. Floorscapes^® dealers get two free courses each year, plus unlimited access to more than 50 online business courses.

3.  Taking advantage of technology with a computerized business system and high-speed internet connectivity.

4.  Using the power of a private label credit card program which boosts average tickets from $600 to more than $2,600.

5.  Including the Mohawk Floorscapes^® logo in all advertising to leverage the millions of dollars in consumer advertising Mohawk buys each year to build awareness.

6.  Store signage that also draws on the co-branding power with Mohawk, recognized as one of the most powerful brands in flooring.

7.  Using the Mohawk Floorscapes^® merchandising system (developed during two-years of in-store research) to capture consumer attention and build trust. Studies show that consumers decide within the first 20 seconds if they will do business with a store, and the Mohawk Floorscapes^® system is based on earning this confidence.

“The main purpose of your business is to run it so you can sell it at a profit should you choose,” Llerena said. “If you can’t do this, you don’t own a business, you own a job. The systemic business approach of Mohawk Floorscapes^® helps dealers keep stores thriving, even in the most challenging economic conditions.

“Better yet, these tools are the best ever created for flooring retailers to know precisely how profitable their stores can be.”

 

NEW FLOORSCAPES^® PROGRAMS OPEN NEW OPPORTUNITIES,

ENHANCE PAST SUCCESSES

It’s called “Continuous Concept Renewal,” and it’s a core principle behind Mohawk Floorscapes^®. Every product and program within the Mohawk Floorscapes^® concept is subject to routine review and scrutiny—all designed to give dealers stronger selling advantages.

For 2008, Mohawk Floorscapes^® is rolling out a series of new products and ideas that are designed to boost profitability in an ultra-competitive marketplace.

Mohawk Ad-Vantage: Advertising Made Simpler. And More Effective.

Last year, Mohawk introduced its Ad-Vantage Advertising Center for dealers. This year, it takes a major leap forward. Mohawk Ad-Vantage allows dealers to get television commercials (prepared and customized), radio spots, newspaper ads, direct mail, vehicle wraps, in-store graphics, on-hold messages, room scenes, and even tips on how to put ads together all from one source.

For 2008, Mohawk has partnered with Banner Advertising, a retail specialist known for its work with Ashley Furniture stores (independently owned furniture stores with a business model very similar to Mohawk Floorscapes^®).

Banner will produce a total of six fully integrated sale packages for dealers during 2008, including television, newspaper, circulars, direct mail, radio, in-store signage, and e-mail. These integrated packages will focus on major selling periods and are based on effective, proven themes.

Mohawk will continue its two national aligned dealer promotions each year, the “Bouquet of Beauty” Sale scheduled for this Spring, and “Mohawk Anniversary Month” slated for Fall.

Best Sellers Strengthen “Green Stories”

As consumers become more conscious of the environment, products with strong “green” benefits have become more attractive. Two of Mohawk best-selling carpet products offer some of the strongest green stories in the flooring business. Mohawk’s EverStrand™ PET fiber is produced from 100% post-consumer content recycled soft drink bottles. In fact, Mohawk is one of the largest recyclers in the world. One out of every four soft drink bottles recycled in North America is converted into Mohawk carpet—since 1999, that’s more than 17 BILLION bottles. And because the FDA requires such high quality PET for food and beverage applications, the recycled fiber is often much higher quality than the synthetic fibers used to make other brands of carpet yarn.

An even bigger green story for 2008 is Mohawk’s use of SmartStrand® fiber made with DuPont™ Sorona^® renewably source polymer. With this innovative fiber, exclusive to Mohawk, corn sugar replaces a portion of the petroleum used to manufacture Bio-PDO, a key polymer ingredient. As a result, 37% of the fiber content comes from renewable sources rather than oil. The production of Sorona polymer requires 30 percent less energy than the production of an equal amount of nylon. In addition, greenhouse gas emissions from the production of Sorona are 63 percent lower than nylon manufacturing. This energy reduction results in approximately one gallon of gasoline saved per every seven square yards of carpet.

Even before Mohawk SmartStrand fiber made with DuPont Sorona polymer became renewably sourced, it was recognized as the biggest fiber innovation of the last 20 years. Its stain resistance is built into the fiber, so it doesn’t wear off like stain treatments applied to the fiber. It also offers softness and resilience, and exceptional value.

Mohawk EverStrand and SmartStrand products are part of the Mohawk Floorscapes® Family Living collection, and their remarkable stories are being enhanced for 2008 the Family Living information kiosk. These screens provide an ongoing presentation of product benefits, and explain to consumers the value, performance, and environmental benefits of Mohawk’s fastest growing product line. (Learn more about Mohawk green projects at www.mohawkgreenworks.com.)

New Products Put An Exclamation Point on Fashion Statements

In 2008, Mohawk Floorscapes^® dealers get more access to Mohawk’s fashion products through additions to the Fashion Statements line. New looks include additions featuring Mohawk’s LCL tri-level technology and other luxury styling. A new information kiosk for Fashion Statements showcases the value and style of the new products.

The Largest Wood Introduction Ever

Mohawk Floorscapes^® dealers will be among the first to benefit from Mohawk’s acquisition earlier this year of Columbia Hardwood. With this purchase and strategic partnerships, Mohawk is launching its most aggressive wood flooring product campaign to date. Mohawk Floorscapes dealers get products including:

• Nature’s Eloquence - Domestically produced solid oaks in a variety of colors, grades and edge treatments

• Antique Artisans - 3/8” hand scraped oak species

• Tradition Expressions – 3/8” oaks and domestic exotics featuring Mohawk’s exclusive UniClic^® Edge, recognized as the most secure, easiest-to-install locking system in the business.

New Laminate Merchandising—Including A DIY Kiosk

Mohawk Floorscapes^® laminate sales were up more than 20% in 2007, thanks to an enhanced product line and new merchandising. For 2008, the laminate program will have an even broader reach with a new DIY display center which provides consumers information on products, installation, and accessories. Dealers can take advantage of consumers’ comfort level with DIY laminate installation and appeal to their desire for higher quality, high-style products with the Mohawk Floorscapes laminate line.

There’s also a new display header for dealers who have the laminate display not positioned in an alcove. The new “WoodWorks” header draws attention to the laminate line and the styling that Mohawk offers.


More Main Street Business With A New Modular Carpet Tile Line

For the first time, Mohawk is adding a modular carpet tile line to its Home and Office Collection for Floorscapes^® dealers, opening up more commercial opportunities.

This line features dynamic styles and innovative design options combined with superior performance, ease of installation and waste reduction. To further Mohawk’s pledge to be environmentally responsible, the new Home & Office tile line is PVC free, using extruded thermoplastic instead. It features 35% pre-consumer recycled content, and the tile itself is 100% recyclable without separation. It also features Mohawk’s Encycle® backing, which is produced in an ISO_14001-certified and Clean Air Class 1 facility.

Mohawk Floorscapes^® dealers will get 18x18 cards, architect folders and a story board as part of the Home & Office update package.
 

Mohawk ReCOVER Network Makes Insurance Claims A Powerful Profit Center

Over a thousand times each day, homeowners experience damage caused by weather, water, fire or smoke. In most cases, these losses require substantial flooring replacement. The Mohawk ReCOVER Network links qualified Mohawk dealers with insurance claim centers and pre-qualified sales prospects.

In 2007, this network generated more than 1,100 referrals and direct assignments in 21 states, with more states scheduled to be added in 2008.

A Total Floor Care Solution

Floor care is a critical issue for consumers, and a tremendous opportunity for dealers to maintain relationships with customers between buying cycles. Mohawk has partnered with Global FloorCare Solutions to establish Mohawk Authorized Service Centers across the nation, under the Mohawk FloorCare Essentials Professional brand. This is the first time Mohawk has allowed use of its brand by independent floor care professionals.

For the past year, Global FloorCare Solutions has been working closely with top floor care professionals from around the nation to build a network of Authorized Service Centers that consumers can rely on for professional care—much as they rely on factory-authorized service centers for appliance or auto repair.

The Mohawk FloorCare Essentials Professional Network will cover the spectrum of professional floor care, including carpet cleaning, hardwood refinishing, tile and grout cleaning, and area rug cleaning.

In additional, Mohawk FloorCare Essentials offers dealers turnkey carpet cleaning and hardwood refinishing programs so they can start their own floor care profit centers, plus a complete collection of consumer cleaning products for carpet, hardwood, laminate, and tile that provide exceptional cleaning power—and bring customers back into Mohawk Floorscapes^® stores on a regular basis.

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Mohawk is a leading supplier of flooring for both residential and commercial applications. Mohawk offers a complete selection of broadloom carpet, ceramic tile, laminate, wood, stone, vinyl, rugs and other home products. These products are marketed under the premier brands in the industry, which include Mohawk, Karastan, Ralph Lauren, Lees, Bigelow, Dal-Tile, American Olean and Quick-Step. Mohawk's unique merchandising and marketing assist our customers in creating the consumers' dream. Mohawk provides a premium level of service with its own trucking fleet and over 250 local distribution locations.

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Floorscapes Convention Logo

The Mohawk Floorscapes concept was developed after two years of research.  Mohawk Floorscapes stores have higher margins, better sales per square foot, and greater profitability.

New Family Living Kiosk with video screen showcases the "green" stories of bio-based SmartStrand and recycled EverStrand products.

Mohawk Ad-Vantage gives Mohawk Floorscapes dealers a single-source website for advertising materials, including National Sales like the upcoming "Bouquet of Beauty."

 With Mohawk SmartStrand fiber made with Dupont Sorona polymer, corn sugar replaces a portion of the petroleum used to manufacture Bio-PDO, a key polymer ingredient. As a result, 37% of the fiber content comes from renewable sources rather than oil.

Read more about Mohawk's environmental efforts at www.mohawkgreenworks.com.

With the acquisition of Columbia Hardwood, Mohawk's wood introductions are the most aggressive ever.

New carpet tile introduction into Home and Office give retailers opportunities for additional Main Street commercial business.