The pool tile industry has been the center and circumference of commercial activities for partners Brent Tucker and Larry Seevers. It's what brought them together and keeps them together. Initially, they focused on the installation of decorative pool tiles. But extra long hours on the job and a desire for entering the more cash-productive side of distributing product lured them away from labor-intensive installations.
"We were making a good living installing pool tile," says Larry Seevers, the partner at Sarasota-based Luv-Tile Enterprises Inc. in charge of finances. "But there was no future in it if we didn't work 12-hour days. Every sunny Sunday we'd be working."
Those laborious Sundays were to make up for hours missed when the usual afternoon rainstorms interfered with installation schedules.
Six years ago Tucker and Seevers decided to get out of installing. It wasn't that they were dissatisfied with their careers. They had a greater vision.
"When we walked away from a job we were very proud of it," says Brent Tucker, the partner who manages product procurement. "But when we looked down the tunnel to our future, there was very little light on labor. We could work hard, but we wanted to work smarter, not harder. Distribution is much more lucrative."
No double dipping
Initially, they tried installing and distributing pool tiles, but soon discovered an inherent conflict of interest. "You can't install and distribute, because then you're selling to your competition," Tucker says. "But our reputation for a job well done led us to many of our customers in the beginning."
Their customers are swimming pool subcontractors and homebuilders throughout Florida. They began with a handful, but that has grown to 500 or more. "We knew some people to sell to," Seevers says. "But vendors to buy from was a whole new game."
The partners didn't anticipate the many roadblocks they'd encounter in establishing themselves as distributors. "We placed a lot of phone calls and got a lot of turn downs because products were already being sold by other distributors in the area," says Tucker. "We had to find ways to get into the market."
So, they backed their way into their new line of work. First they started distributing to customers outside their own market. "We sold to other vendors out of state," Tucker says. "Then we started finding our own sources, and we're not done yet. Gradually, one at a time, we have transitioned to buying directly from manufacturers."
Luv-Tile Enterprises imports its ceramic pool tiles from Japan, Korea, Thailand, Italy and Spain. As the company has added manufacturers to its sample of products, the size of its facility has mushroomed. "Our first year we grew from 1,200 square feet to 2,500," Seevers says. "A year later we rented 7,200 square feet; now we're at 10,700."
The next step in their growth plan is to build a 20,000-square-foot distribution center along the I-75 corridor in Sarasota. They're looking for land.
They currently employ 15 people, but started by themselves. "Brent and I did everything," says Seevers. "We would handle the phones, pull orders and deliver them, do the billing. As it got busier, we started adding staff. We just added a bookkeeper last month."
Over the years Seevers has handled the bookkeeping responsibilities himself, coming into the office at 4 a.m. to get the work done before dealing with customers. "We need to keep involved so we don't lose touch with what's going on," he says.
"I like to get out into the showroom and hear the decorators working with their customers," Tucker adds. "It keeps us close to what customers want."
Going and going and ...
And it is that knowledge which apparently has had some impact on the growth in annual sales at Luv-Tile over the years. Sales of $674,000 in 1995 climbed to $4.2 million last year, and revenues this year are projected to reach $6 million.
"We've had a steady progression and it just keeps going," Seevers says. "At one point we decided on no new customers. We wanted to keep our current clients happy. We've built our reputation on quality service and if we can't handle growth, it's not worth handling."
The revenue growth has earned the company a 39th-place ranking on the 1998 Florida 100 list of fastest-growing privately-held companies, as determined by the University of Florida's Warrington College of Business. Luv-Tile ranked 57th on the 1999 list. "Our banker nominated us," says Seevers. "Once we made the list, we're invited to keep applying. We don't know if we'll be on the 2000 list {the new list will be announced in December]. But we're happy with our rate of growth. We can keep a handle on it. I couldn't imagine if we had 20 times what we have now. We'd probably start messing up."
Pool tile niche
While the ceramic tile pool industry is a small niche industry, it can be quite competitive. "There are five major players [in the nation] that just sell pool tile," says Tucker. "The first vendor we worked for put a store here and became our competition. We found another supplier and switched out and pulled their samples before they cut us off. We had to fight."
As if it weren't bad enough the first time around, Tucker and Seevers had to respond when a second vendor executed the same strategy. "We fought by ordering large quantities," Tucker says. "We used to buy from these other vendors in smaller quantities."
Placing large orders directly with manufacturers led the partners to a relationship with Redding, Conn.-based American Tile Source, which brokers transactions between distributors and manufacturers. "They [Luv-Tile] are one of our larger accounts," says Carl Luster, the firm's president. "And we're their largest supplier at this point."
American Tile Source is a Japanese trading company and Luster has two Japanese partners. "All three of us have been in the tile business our entire lives," he says. "We sell containers of product from the Far East to Europe and America. The ceramic tile industry in Japan is a cottage industry. It's very old and traditional, and it's very difficult to get supplies smoothly."
Tucker and Seevers agree about the uncertainty of receiving shipments of product. It requires a good sense of timing to satisfy market demands. "We keep as much of an inventory as we can afford to pay taxes on," Seevers says. "We keep it balanced with sales. We don't want to run out of product. That would make our customers unhappy."
"We have a three-month turnaround under good circumstances," says Tucker. "In a perfect world it's three months. Our manufacturers have no inventory."
Luster, of American Tile Source, knew about the Sarasota partners before they began trading through his firm. "They started buying from one of my customers, a national distributor of swimming pool tile," he says. "It's difficult to get into the business they have. They've had phenomenal growth. They started buying small and then started buying bigger. My customer cut them off because they were taking up too much of the market in Florida.
"I felt good about what they were doing and their future," he adds. "I saw an opportunity to supply them with full containers of product from the Far East. Their business has doubled every year since we've begun trading with them. I've been in this business 18 years and have worked with the biggest tile buyers in the country. These people are more dynamic than any customer I've ever had. They're more driven. These guys are so smart it's scary. They're really good at what they're doing. They know what the market needs. That's the reason they're doing so well."
But ask Tucker and Seevers the secret behind their success and they have a different answer.
"If we'd had a pocket full of money when we started, we would have made a lot more mistakes," Seevers says. "You have to scrutinize your choices when you don't have leeway."
"It we try something, we have to make it work," adds Tucker. "When you choose a design and spend $15,000 on a mold, you want it to be good. It's something that's going to be in your program for awhile. A batch that the manufacturer makes will supply 700 to 800 pools."
The cost of ceramic tiles for a swimming pool can vary from $400 to $4,000 or $5,000. "And that's just the decorative part of the pool," Tucker says. "Accent pieces can cost $12 a tile."
Tile for Shania
One project in Naples the company supplied for a Fort Myers builder was decorated completely with accent tiles. "It was a $3,400 job for a small pool," says Seevers. "The builder said we wouldn't question the order it if we knew who the pool was for. I saw the [Shania Twain's] name on the ticket."
Another client in the Virgin Islands covered the entire pool with mosaics. And that's as good a surface as any other, according to the duo. "They'll just have to regrout after 10 years," Tucker says. "Pool chemicals affect the grout, not the tiles. The only problem with the tiles is they just get outdated."
While blues and greens have always been popular in swimming pool fashion, the current trend is a natural stone look. "Earth stone colors with a matte finish are popular now," says Tucker.
Another artistic touch is a mosaic of sea animals. It costs an average of about $130 a square foot. "We have dolphins, manatees, turtles, mermaids," Tucker says. "We can custom make anything. But these are fairly pricey."
While Tucker and Seevers are keeping up with customer demand, they're also planning strategically their next growth stage. "We plan to open a store in the Fort Lauderdale area to alleviate pressure here and build more clientele there," Seevers says. "We sell a lot locally, but this last year three of our top 10 customers are on the other coast."
They also plan to increase shipments delivered by their own trucks to customers along the Gulf Coast. "We used to deliver two days a week to Naples and now a truck pulls out full every day," says Tucker. "Our north truck started at three days and is now at four. Next summer we'll deliver five days a week. That way we can get customers whatever they need any day of the week. They like our personalized service. Our drivers take the tile out of the truck and stack it in our customer's warehouse. We've done better with our own drivers than sending product out on a semi where we have no control over the driver's service."
The partners, although probably working as many, if not more, hours than they did when they started out, seem happy with the niche they've created for themselves. They plan in the near future to go to the Far East to meet their manufacturers, including a grandfather and grandson in Japan who make ceramic tiles by hand. "This keeps a better relationship," Seevers says, "not to mention a nice vacation for our wives and us."
