Partnering to Build a Category Killer in Hard Surface Flooring

Floor & Decor is a leading omnichannel specialty retailer of hard surface flooring, offering one of the broadest selections of tile, wood, laminate, and natural stone flooring at competitive everyday prices due to its highly effective global supply chain.

At the time of Freeman Spogli’s investment in November 2010, the Company had 24 warehouse stores and had opened just one new warehouse store in the previous three years. Freeman Spogli saw the potential for the Company to open hundreds of warehouse stores and become the category killer in the hard surface flooring industry.

Early in our hold-period, we invested heavily in organizational development and corporate infrastructure to position the Company for long-term growth. In the first 18 months, we helped the company make numerous key leadership hires, including Tom Taylor who took over as CEO from founder Vincent West in 2012. Tom was a 23-year veteran of Home Depot who held senior positions in store operations and merchandising during Home Depot’s rapid growth period. Tom had firsthand experience leading exactly the type of growth we were planning for at Floor & Decor. Other key hires included the CFO and Chief Merchandising Officer and other key roles within store operations, merchandising, human resources, supply chain, IT, marketing, real estate, e-commerce, and corporate counsel.

Under Tom Taylor’s leadership, the Company executed an aggressive organic growth plan, more than quintupling its number of warehouse stores from 24 at the time of our acquisition to 126 at our final exit. The Company significantly increased sales per warehouse store driven by intense focus on the professional customer, product category expansion, and improved localized assortments. Floor & Decor also invested in its e-commerce platform and omnichannel capabilities, increasing e-commerce sales from 1% to 10% of net sales.

To facilitate this fast pace of organic growth, Floor & Decor invested in new IT systems and moved from a 3PL distribution strategy to an internally operated network of distribution centers.

In April 2017, Floor & Decor completed an initial public offering on the New York Stock Exchange. At pricing, it was the highest valuation for a retail IPO since Lululemon went public in 2007.

Over our nearly 10-year hold, the Company opened over 100 warehouse stores, created over 6,000 jobs, and grew its Adjusted EBITDA eight-fold. The Company grew from a small regional operator in eight states to a leading national player with warehouse stores in 30 states. Their strong and consistent performance was rewarded by the public markets, and the public stock price tripled in the 3.5 years after Floor & Decor went public until our final exit in 2020.