danger alert, page-19

Hi Hendrous,

I have had previous experience in this market.

Their compressed range of solid click floating bamboo was what I was referring to. Given the weight and lengths of the packs, the comparably difficult installation process and the retail prices being charged - i see it being a difficult task in Style grabbing a bigger slice of the market with these products. And they do expand/contract! - which means they need matching floating floor accessories.

For their direct stick products, they were actually quite good - probably market leaders imo. But when Joe Bloggs can fly to China and buy a container of compressed/horizontal/vertical bamboo, import it himself, sell it 30% cheaper to the market and contract his own installer's - end-price savings to the architect/builder/buyer converts to a sale for a Style competitor.

Also the fact that Style uses only certain layers (in what really is an unlicensed free-for-all trade) means their booking times blow out during peak periods ie Christmas/Easter which also costs them sales.

Unfortunately for Style those 'tacky vinyl looking floors' are selling like hot cakes through thousands of stores worldwide to the point where you can buy a container from china direct for $6.00 per sqm and get it landed in Australia for just under $9/sqm.

If Style are serious about turning their financial's around, they should seriously look at competing in this market by manufacturing a floating bamboo laminate (8mm and 12mm)with a HDF membrane with their compressed range of colours and designs - AND PATENT the darn things and ENFORCE them. There are absolutely NO global competitors which would make it attractive for a Bunnings or probably a bigger player to step into. Manufacturing times/risks would be reduced, installation times/costs would be cut dramatically, gp could be kept at 20-30% easily, cash flow and turnover would improve off the scale and sales staff would make a motsa (at the same time re-invigorating some energy/belief into their staff across the board).

Have an Oz marketing budget of about $150K-$250K for some daytime TV ads and newspaper adds over 3 weeks.

If they announced any intentions of this type I would buy bundles and bundles of SYP then probably send my resume in to be employed as their GM.

The majority of people simply can't afford to pay $100-140/sqm for solid bamboo anymore - especially when the solid timber market is finding a level of about $90-110/per sqm and has been around for a very long time. Even sanders/polishers bag the crap out of solid bamboo and theyr'e the ones that are contacted by top-end retail clients every 5-10 years.

A bit long winded, but hope it helps.