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Luxury carpet maker acquires firm for global growth

September 19, 2014
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Luxury carpet maker acquires firm for global growth
Scott Group Custom Carpets makes luxury carpets and rugs for a range of commercial and residential markets, including aviation. Courtesy Scott Group Custom Carpets

A maker of custom luxury carpets and rugs is planning to "scale" in the international residential market with a recent acquisition.

Scott Group Custom Carpets in Grand Rapids said this week that it has acquired Hokanson Carpets in Houston, a maker of luxury residential carpets and rugs.

Scott Group said the combined company is now the largest U.S. provider of luxury handmade carpets and rugs.

Terms of the deal were not disclosed.

Residential “scale”

Hokanson Carpets, founded in 1987, makes custom carpets and rugs for affluent residences around the world and operates six showrooms across the U.S.: Los Angeles, New York, Chicago, Dallas, Houston and Boston.

Hokanson products complement some of the most prestigious spaces in the world: the restoration of the Royal Palaces in St. Petersburg, Russia; the office of Canada’s speaker of the house; and the Burj Khalifa, the world’s tallest building, in Dubai, United Arab Emirates.

The acquisition provides Scott Group the opportunity to expand rapidly in the luxury residential market, a major focus of its strategic growth plan.

“Our company plays very strongly as a supplier into the business jet sector and into the residential and corporate sector, but we aren’t as strong internationally as we want to be on the residential sector,” said Mike Ruggeri, president and CEO, Scott Group Custom Carpets. “This is an opportunity to scale into that sector rapidly.”

The company will also take advantage of Hokanson’s showroom network.

“This is really a move that strengthens both companies and will bring more product to bare through our showrooms,” Ruggeri said.

“There are plenty of opportunities for us to cross sell product through one another’s sales organizations and ultimately blend those two together, making a much more robust company supplying into the interior design sector.”

Additional acquisitions are likely to follow, according to Ruggeri.

Integration

Ruggeri said prior to the acquisition, Scott Group employed about 180 people. It now employs 200, and the company expects to add 20 people by the middle of 2015 to support the acquisition.

“We anticipate supporting the growth associated with the acquisition, and we will need additional people in production, design, customer service and inside sales,” he said.

“Our brands align, as do our visions, which will facilitate integration of our teams and our business practices. Scott Group will continue to produce all our products in our Grand Rapids, Michigan facility, while the Hokanson brand will continue globally sourcing its products.”

Ruggeri said all of Hokanson’s employees will be retained, and Larry Hokanson, Hokanson’s founder, will join Scott Group’s leadership team as the director of residential development.

“I am very energized about this next phase for Hokanson and am equally excited to be joining the leadership team of Scott Group,” Hokanson said. “I started Hokanson nearly 30 years ago with a vision of becoming the premier provider of custom rugs and carpets to interior designers and architects. By joining forces with Scott Group, we will be able to complete that vision, as this enables us to become a truly global brand.”

Scott Group

Scott Group Custom Carpets operates a design and production facility in Grand Rapids, which features a modern dye operation and mill, where all of its products are produced.

Scott Group has representation in the U.K. and Europe and in four U.S. cities: Los Angeles, New York, Chicago and Dallas.

Scott Group carpets can be found in private aircraft, luxury retail stores, corporate offices, yachts and residences around the world, including the State Dining Room and Oval Office in the White House.

Scott Group was founded in 1969 in Cleveland and moved to Grand Rapids in 1982, following the acquisition of a small rug-making company located in the city.

It was purchased in 1997 by its current senior leadership team — Michael Ruggeri and Tim Hill in Grand Rapids and Rich Ruggeri in Dallas.

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