Flooring maker AHF Products Inc. has laid off 30 nonmanufacturing employees across the company, including several at its West Hempfield Township headquarters, the company’s president and CEO confirmed this morning. “As part of our ongoing efforts to streamline operations and enhance efficiency, we have made the difficult decision to reduce our workforce through targeted layoffs, impacting about 30 white collar positions across the company, less than half in Lancaster County,” CEO Brian Carson wrote in an email responding to questions from LNP | LancasterOnline. “These decisions that impact the lives of our employees are never made lightly; however, after a strategic review of the business this restructuring is necessary to position our business for future growth and better align our resources with current market demands,” Carson wrote. AHF has about 3,300 employees, including about 600 locally. The company bought six businesses in the last five years even as demand for residential building products has remained stagnant. Housing demand is crucial to the floor covering business since 60% of the market comes from homeowner and builder purchases.
Market poses challenges
Industry trade journal Floor Covering Weekly reported in July that U.S. floor coverings sales declined in 2023 after two years of relatively strong growth. A Catalina Research report said rising interest rates resulted in a declining housing market that led to a drop in flooring purchases. Total U.S. housing demand (resales, new starts and manufactured home shipments) decreased 28.6% between 2021 and 2023. An increase in commercial sales did not offset the drop in the residential market, according to Catalina’s report. Catalina reported that the wood flooring sector – the high-end sector in which AHF began – experienced some of the sharpest sales decline (about 11%) in the industry in 2023, as customers sought lower priced solutions. In August, AHF announced its plan to shutter its Arkansas solid hardwood flooring manufacturing facility to consolidate production to its Beverly, West Virginia, facility, the largest solid hardwood flooring plant in North America, and the AHF West Plains, Missouri, plant. That closure followed a $7 million purchase of two sawmills in West Virginia as part of a strategy to vertically integrate AHF’s wood flooring products in April. The integration anticipated a resurgence in the wood flooring market, the company said. The acquisition of the two sawmills in West Virginia came just six months after AHF Products acquired tile maker Crossville Inc. AHF Products began in 2018 as a small, wood-flooring spinoff from faltering, iconic and now defunct Lancaster County-headquartered Armstrong Flooring. The company has grown threefold through the acquisitions that included factories of bankrupt Armstrong Flooring in 2022. Most production is in the U.S., except for a wood plant in Cambodia. AHF Products is the largest American company in Cambodia. AHF is privately held by Texas-based Paceline Equity Partners.
