Collins Educates NWDA Attendees on Latest Market Stats

July 22nd, 2013 by DWM Magazine

imprmarketsWhen members of the Northeast Window and Door Association (NWDA) met last week in Harrisburg, Pa., for its annual summer meeting, one of the educational speakers was Michael Collins who educated attendees on everything from housing stats to market trends to what we can expect in terms of acquisitions and sales. Collins, an investment banker and a partner in Building Industry Advisors, is an expert in the door and window industry and also serves as a columnist and blogger for DWM magazine.

Collins started by highlighting many key housing and economic indicators that all have posted impressive upward trends in recent months. These include improving housing markets, increases in remodeling, less household debt and improving employment numbers.

remodelingHe also highlighted key trends that apply to the door and window industry. Roughly one third of consumers are very ready to try new technologies, said Collins when citing a recent survey.

“This is important to remember when introducing new ‘gadgets’ and product features, as well as designing social media and similar strategies,” he said.

An increased focus on technology in all industries is also present in doors and windows. “Every company should have a plan for how the door operators they use are going to become tablet and smart phone accessible,” said Collins.

He also highlighted how all parts of the door and window chain need to embrace technology.

resconstr“There are companies that specialize in creating tablet presentations for sales teams to use with homeowners and commercial construction companies,” said Collins. “If well done, these presentations help the products come alive.”

The luxury home market is another bright spot that will continue, and proper training of the sales team is key here as well. Collins pointed to a Private Wealth magazine survey that states that there will be an increase expected in consumers with more than $1 million in assets. Between 2013 and 2016, households in this group will grow by 19 percent. Over the same period, the wealth of these households will increase by 25 percent.

Areas with the highest expected growth rates in this group include California, New York, Florida, Michigan, Connecticut, Massachusetts, Washington, D.C., Oregon, Utah, North Dakota and Alaska. All of these states will see growth in excess of 5 percent.

“Companies must train their sales force to sell upgrades to this group,” said Collins.

Regarding mergers and acquisitions in this space, Collins said the most common inquiries this far in 2013 is from companies seeking to buy other companies. Most companies considering a sale are unusually profitable for this stage in the recovery

“They will benefit from private equity funds having $400 billion they must invest or return to their limited partners,” said Collins. “Strategic buyers are hungry for acquisitions in this market.”

More good news is the fact that companies have shed facilities and have seen an uptick in sales, calming the fears of their lenders. Many are holding cash and seeking acquisitions as a means of investing and capturing the coming upswing.

But overall owners don’t want to sell until they are more profitable, and many have funneled cash back into the company in recent years. For that reason, it is likely 2014 activity will be much stronger than 2013, says Collins.

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