ARLEY REPORTQuarterly Newsletter

SUMMER 2016

Arley Wholesale, Inc., a family-owned, third generation wholesale supplier of ceramic, porcelain, stone, glass mosaic tiles and sundry materials, once again provided three focused days of business, fun and major league networking… all within a totally professional atmosphere. The firm hosted its 14th Annual Arley Wholesale Tile & Stone Exposition on Tuesday, July 12th at the Radisson Lackawanna Station Hotel in Scranton, Pennsylvania, concluding a three-day non-stop celebration that included the hugely popular Arley Golf Classic on Monday.

Longtime Arley customer, Rocky Wright, president of Wright Flooring from Silverdale, PA, commented, “We’ve been working with Arley for many years. Because I coach American Legion baseball, which has games through June, I’ve missed the last seven years of the Arley event. This year, with its July dates, we could make it… and I’m so glad we did. The trade show gave us a chance to see new products in 3-D, not just in pictures. There were many new innovative, large modular products, in particular the porcelain slabs. Additionally, we saw lots of new decorative products that we hadn’t seen previously.” When asked about his relationship with Arley, Wright added, “Arley is a go-to company. We

absolutely have a strong relationship working together. When I need any tile or tile supplies, they deliver it! As a matter of fact, Arley trucks are delivering materials to us two times every week.”

Arley’s 14th Annual Golf Classic and Tile & Stone Expo. Focused. Fun. Fulfilling for All.

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Last October, our top management decided to hand company reigns to the next generation. We became not a “NEW” Arley, but Arley 2.0, built upon past traditions/guidelines with amazing future plans. There have been multiple changes.

-All products were folded into one purchasing department to leverage the technology created in our tile division with

Tile Talk

Change is good!

Scott Levy

the explosion in our sundry division. Peggy Morahan had managed both the sundry purchasing and Arley’s inventory. After moving sundries into the tile-purchasing department, Peggy now focuses on inventory and trucking, enhancing our overall strengths. Upgrade possibilities with sundries are limitless; their “upsell” profit is HUGE.

-Terry Ford has been appointed “Customer Experience Manager,” helping customers in more ways than we have space to describe in this Arley Report.

-Our Syracuse facility will stock more material, transferring it to Scranton on a daily basis. The current office becomes a modern sample production facility; more samples will be produced faster and even more professionally.

-New trucks have been added to handle more material with greater ease of delivery, soon to expand throughout the 26 states we service.

-We now offer even more tools. For example, we have enhanced the Arley Evolution app. All lines are now on it in greater photographic detail. There are more realistic room vignettes now on the app!

-The Arley iCat Catalog is available at no charge as an iPad download. It offers every product picture found in the app, and also, informative PDF “sell sheets,” as well.

-We’ve created a new Arley website, which blends consumers with customers by pushing all purchase inquiries to our regional customer partners, while incorporating the iCat into the website… use it as a resource for all Arley items!

-We have enhanced our Customer Online Access system AGAIN; now see what items are on backorder; there were over 11,000 logins to the system last month!

Arley’s Christiana Gianzanti demonstrated the Arley App at the Trade Show.

-Our Social Media program has exploded; many customers work with us on our Facebook, Twitter and Houzz platforms, increasing their profitability.

-We have invested in new product and marketing categories, including 6mm tile to be inventoried in the 2’ by 4’ size. We also offer custom and large size panels up to 5’2” x 11.’ Clearly, a fascinating product category for commercial and high-end residential installations!

-Arley is also investing in porcelain pavers. We see huge profit opportunities for our customers by connecting the outside to the inside of the home.

-To enhance your profits, we created Qualis Ceramica, a trademarked, fully private-labeled division created to be a partnership between certain suppliers and Arley. Suppliers wanted an e-commerce platform giving them nationwide name recognition; we set a policy that private-labeled Qualis products could not be advertised online. This way, Arley Qualis customers avoid national Internet competition on their products. WIN-WIN for everyone!

-We wondered how to best leverage our stocking and delivery systems with a higher-end division to give protection to our customers and greater sales possibilities to our manufacturers. The result: The Riviera Tileworks division. Its product lines offer member pricing for customers co-investing with Arley in the unique sample packages we have created. This authorized dealer system guarantees those who do not co-invest will receive retail pricing for the products… stopping people from infringing on the work/time that you have put in with your consumer.

Combine all of this with the Arley Guaranteed Inventory program, AND with the Arley Outlet program… you can feel why we’re so excited for the future! Change is good!

Supplier Statements:

Featured ProductMagnum Collection

Big is BetterIn the last few years, the ceramic tile industry has been revolutionized by the introduction of large format, thin porcelain panels. These products are very much in demand because not only does their size allow for a “monolithic look,” because they’re less than 6 mm thick, they can be installed RIGHT OVER existing tile material. By doing this, demolition time, expense and overall messiness is totally eliminated.

Rex Ceramiche, division of the Florim Group, is the world leader in thin porcelain panel technology. “We recently invested $30 million US to upgrade our production capabilities in Italy,” stated Andrea Finozzi of the Florim Group. “The process and product offer a totally new perspective in both floor and wall design. No longer does size of tile define architectural designs. The A&D Community can actually choose the size panels they wish to specify. The panels are extremely easy

to cut; so easy, as a matter of fact, that professional tile installers can make these cuts right on-site using a process that is not unlike cutting glass.”Finozzi went on to state that many distributors within the U.S. and Canada now are stocking these panels in sizes up to 4’ x 8.’ “But,” he added, “they can be produced in even larger formats.”

“We consider Arley as our partner in marketing,” he concluded. “When we were introducing these new large scale products to the states, we counted on Arley in helping us in every possible way. They did not and do not let us down. The Florim Group enjoys a totally professional relationship with Arley. And the nicest part of this relationship, is that we continue to grow together.”

Andrea Finozzi of Florim

Arley’s 14th Annual Golf Classic and Tile & Stone Expo. (continued)

Guest Columnist Cover Story

A major highlight was the annual keynote speech delivered after Sunday’s dinner by Scott Levy, Arley’s President. This year’s focus was on “Change,” and how to best address it, embrace it… and, prosper along with it. Levy included a number of well known and historic “change quotes” in his delivery, one being from JFK, “Change is the law of life. And those who look only to the past or present are certain to miss the future.” Levy went on to discuss various ways Arley has changed with the times, in particular, when he stated, “Our owners decided last October was the time to hand the reigns of this company over to the next generation…so that we could accelerate the pace of change and innovation necessary to be the best possible choice for our employee, customer and supplier partners. They also wanted to create a stability going forward so that it wouldn’t be a “NEW” Arley… but rather, an Arley 2.0, built on the traditions and guidelines of the past with amazing plans for the future.”

Arley Wholesale, Inc. 700 North South Road Scranton, PA 18504 800.233.4107 fax: 800.652.7539 www.arleywholesale.com

Monday’s golf outing held at Glen Oak Country Club in nearby Clark’s Summit, included well over 100 tile industry professionals, all vying for lowest net team score, closest to the pin and longest drive prizes. Post-golfing was topped off by a patio cocktail hour, followed by Arley’s awards dinner at the Glen Oak main dining room. Directly thereafter, Arley’s vice president of sales, David Lowe functioned as Master of Ceremonies, delivering the post-dinner golf awards in his inimitable fashion.

Good news: the online home remodeling resource Houzz released its Q2 2016 Houzz Renovation Barometer, which tracks confidence in the home renovation market among industry professionals. The report reflected widespread quarter-over-quarter confidence for all industry sectors, and outlook for Q3 continues to be positive for all sectors.

More Positivity in the Flooring Sector

That’s great news for all of us.

The Barometer did, however, reflect a slight weakening in professional confidence among design-related sectors, with scores among architects, designers, and design-build companies falling 5%-7% in Q2 2016 relative to Q1 2016.

Half or more firms across all industry sectors report an increase in projects from Gen Xers (ages 35-54) so far this year, and projects from Baby Boomers (55+) also increased for more than one-third of firms across all sectors. Not surprisingly, significantly fewer firms (21%-28%) experienced an uptick in projects from Millennials (under 35).

Looking at other factors driving increased business activity, kitchen and bath renovations are hot, and a third or more firms experienced an increase in homeowners purchasing high-end products (32%-49%). More homeowners are also tackling multiple projects at the same time (22%-48%). The increases in these project types are smaller for architects than for other sectors.

As the new editor of Floor Trends magazine, I’m delighted to contribute to the Arley Report, and I’m glad to see there is so much positivity in the building industry—no matter what the focus.

In my case, the focus is flooring. Floor Trends is your resource for everything related to flooring, and we are excited to announce that we just launched a major delivery advancement, the Floor Trends magazine mobile app. With the new app, you will be able to read the latest Floor Trends content anywhere you go, formatted to take advantage of your mobile device’s capabilities. I encourage you to download the app and let us know what you think. You can reach me at kernt@bnpmedia.com.

Tanja Kern - Editor In Chief of Floor Trends

Florim’s large format porcelain panels were displayed...with hands-on installation techniques offered