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Fashion and the love of tiles
John Signorino's enduring success is renowned. The man and the business are held in high regard because they help to set the benchmark for quality and design in the tile industry.
What are tiles, really? While that can seem something of a nonsensical question, it begins to make more sense when you listen to John Signorino. That's because he has understood something that is essential to the tile industry, but often gets lost in the necessary technicalities of the industry: tiles are, for the most part, more about sheer fashion than anything else.
Yes, they are practical, yes, they represent great value (and John thinks that today their value remains under-appreciated). But if those qualities were at the top of the list when it comes to floor coverings, then every home would use some kind of rubberised non-slip material, in a tasteful shade of mid-grey, or (heaven fobid) vinyl flooring "planks".
It's the sense of fashion that makes clients go "oooh" when they see a particular tile design. It's fashion that makes many rooms — private and public — a great place to visit. So, importantly, it is going to fashion that helps to sell tiles by creating a sense of desire and enthusiasm for tiles as a means of expression.
For example, John has this to say about his revolutionary Tile and Stone Gallery showrooms following their recent renovation. "I would suggest you might be impressed by it because it's not looking like a tile shop at all. I don't want it to. I don't like to sell tiles, I like to sell fashion. I'm very passionately committed to design and fashion. This is just my nature."
And he goes on to say: "I've always believed in the fashionable aspects of tiles. I believe tile is undervalued. It is the underpinning of the whole home. We've got a very high standard in this country, in design. And I learn a lot from the people that are my clients, in fact. I learn a lot because I've got to try and satisfy their requirements…It's a pleasure to do that rather than just sell off the shelf … I don't believe in that for the tile industry. [Tiles] are far more exotic and far more stylish than that."
John is optimistic for the tile industry through to 2022, as the construction business gradually recovers from the pandemic. He bases much of that optimism on the extent of pre-orders the company has on its books.
"I believe we will enjoy what's called the slingshot effect when we come out of COVID, because if nothing else, there's going to be a back up of a lot of projects that have gone way too far to stop, and they're at the stage of having ordered their tiles.
"I am very confident because we have a very high number of orders in the system or as a work in progress. Yes, there may be a percentage that will drop off because it depends what the banks are going to do. But overall, I'm quite confident, with all those tiles in our warehouse — and I'm referring to a very big number of the imports over the month of July and specifically August."
In particular, John sees a big difference between the upcoming financial difficulties, and those Australia went through in the 1990s.
"This time around, contrary to the recession [in 1990], good, strong, sound businesses are probably going to remain good, strong, sound businesses because banks haven't handed out money willy nilly, like they did last time.
"If COVID doesn't continue on and linger, I truly think that by the first half of the [next] financial year, which is financial year 2022, that there's going to be quite a recovery."
Markets for tiles
While he is positive about both pent-up and sustained demand, as well as a recovery in the overall economy, John also believes the pandemic will see some market dynamics stay the same, and others undergo some changes, as Australia works its way out of recession. He said:
"Any business that's strong can manage to trade out of this, along with the government helping by deferring tax and so forth, and with the demographics of Australia, I believe that nothing is going to change that much."
Signorino is a case of a company that is doing what it can to emerge from the pandemic better than ever, mainly by reworking some of the brand's existing retail space. John said:
"During COVID a bad thing can always be turned into a good thing. I completely 'bombed' the Tile Gallery…And with great modesty, it's absolutely amazing. I don't want to brag, but it's 30 years that I've had the same showroom. Now it's been given an amazing face lift."
The same resilience, John believes, will be found in the market as well, with a desire to spend a bit more to get over the difficult times.
"The people that have a lot of disposable income will go back to leading the same life they've always led. Everyone's going to want to get back to a quality of life that we once enjoyed. In some respects, we might even spend a little more, because we spent a whole lot less for some months. But generally speaking, someone who was driving a Porsche will probably go and buy himself the new model. Someone who was driving a five-year old Toyota with a lot of stability and good employment, he's probably going to go and upgrade his model.
"So I don't know that anything much is going to change because otherwise it means that society has just absolutely taken one giant step backwards, and I just don't see that being really possible."
John sees this as applying to high-end residences, which have a natural resilience even in a downturn, but also to residences lower down in the market as well.
"High-end residences will go back to pre-COVID-19, and so will residential middle-market apartments, go on to create great demand. People are going to want to live closer to the city."
What John does see changing, however, is that there will be more caution in the market.
"People who understand the risks of putting out too much money and buying a house, the dream home — I think a little bit more reality will set in and people are going to start to be a little bit careful with the amount of money they will borrow.
"Banks are probably going to make it more difficult for some time anyway, and so downsizing and more frugal habits, will probably be something that'll come out of COVID. I think a number of people will have learnt their lesson and understand, they can't always be 'rich'…
"The pandemic has been a bit of an eye opener. It is going to possibly help a lot of people understand that they aren't infallible. It's not always going to be rosy forever, indefinitely. And if not for them, then their children. So a sense of protection, preservation, and nurturing may become more important…"
Yet, while people may be more cautious with their money, John does not think this will drive them to buy cheaper products. Instead, he thinks there will be a move towards quality.
"I think coming out of COVID and being more aware of one's expenditure, I truly believe people will appreciate quality more…and they may dig a little deeper if they can afford it, to have a better product, because they understand that they won't buy another tile. They will intend to stay in their home or apartment, for a very long time.
"Now there's the culture change…People will, I believe, probably appreciate getting a little bit more quality for their bucks. They're not going to say, 'Three years from now, we're going to sell and build another one'. I think that's going to really slow down for some years. Until we're really back on top of the heap, it's not likely that people are going to be so capricious."
That said, while the level of activity and opportunity may come back, John also sees the industry as undergoing some profound shifts. Some companies are going to close or fail.
"I believe [the pandemic] has been a bit of a leveller, a bit of a cleanser. You shake the tree, and stuff's going to fall out. It's unfortunate, but it's inevitable. And we'll find out in due course, to what extent.
"I believe that the government and certainly the union movement, are going to push hard to resuscitate and revive as quickly as possible, the building and construction industry. The second backbone of Australia, and certainly Victoria. It's inevitable because we don't really have industry production, manufacturing. We've lost most of that anyway, so what is our backbone? The same backbone we had before COVID."
John sees the smaller companies as the ones likely to be affected the most.
"With the very small players, the shutdown has really hurt them. They've got a mortgage and all these things. The banks aren't going to be sympathetic or empathetic. And so they may not have a choice but to walk away."
While part of that trend will be down to COVID-19, it's also something John sees as having developed over a period of time in the tile industry. The pandemic may just accelerate a change already underway.
"I see that the smaller, little suburban store may go. I see the bigger chain stores becoming more recognised or supported than they are today…[W]here price is capped at $30 or $35 a metre, they are the experts. Well, they put a lot of effort into that level of product and they cater for that demographic."
The tile
When all is said and done, however, what really sets John and Signorino apart in the market is passion about the art and design of tiles. If John is worried about anything in the market, it's not the effects of the pandemic, it's the long-term decline in fairness and recognition when it comes to evaluating tiles, marketing tiles, and paying attention to quality.
"It's when tile retailers ask $70 for [a cheap product], because it looks very similar to an Italian tile, where it's all wrong. And I would like to think that this gets fixed.
"If you're selling Kias, you sell and represent a Kia and you can only charge what the Kia value is worth. If you're selling a Mercedes, you get more money, but you're giving more value. It can actually be better value for money, but it's a lot more expensive than a Kia.
"Now, that's what I wish the correction in the industry would be about. Transparency, realistic value for money, not a concocted one. You cannot put a retail price of $70 on a Chinese tile and then say, but we're going to give you a 30% discount. That's wrong.
"I disagree completely with that approach or process. That's wrong ethically, in my opinion. It is as though I am being convinced that a Del Monti suit is worth $2,000, but I can have it for $300, with two pairs of pants. No. I got a Del Monti suit, with two pairs of pants, that's worth $300. That's what I got. Remember that commercial? (Del Monti men's suits had a popular TV advertising campaign in 1985.) What I liked about that ad was its pure honesty.
"Two pairs of pants, with a jacket, for $300. That's it. No frills whatsoever. Sadly, that doesn't go on in our industry, generally speaking, without pointing fingers.
"Signorino is seen as being the [tile industry] equivalent to the Rolls-Royce in the car industry. However, we're actually also very active in public works.
"My philosophy is, there's an entry level, even for a Mercedes. It may be made in South Africa instead of Germany and it's $40,000, just a little bit more than what a Toyota might cost. And then of course there is the flagship $500,000 Mercedes. I'd like to think, Signorino is actually a Mercedes, but from the entry level upwards.
"But I'm not here to sell a used car. I won't sell a used car or a Kia. Not that I have anything against Kia, but you know what I mean.
"I prefer to just sell on a level of quality. But entry level actually, if I can put it bluntly, it's actually not much more than a Chinese tile, sold by my opposition."
The Italian tile company Panaria is one of Signorino's main suppliers, and one that is close to John's heart. That's not just about the tiles, it is also about the people.
"I was a very early starter, at 17. I decided then that I would choose people over companies. I've had a long history with Italy, and I was even a part owner in a large tile manufacturer. They are the most organised, most professional and overall, most transparent and honest people. Truly honest people.
"The Panaria people, the [Mussini] family, from the very beginning were special. I still see the founder. He's now 86 and still comes to work every day. Doesn't do much, but just comes out to see it all happening. And the management they have there, there's no politics. They are genuine people that have embraced the position they've been given and will give their very best at that position. They are collectivists and not individualists.
"I've always said, Betty, anyone can be a hot shot and likable when things are good. [They are] put to the test when it gets tough.
"We've lived through recessions together, we've lived through everything. They own a chain of stores in America, USD150 million they spent. They are a privately owned, public company but they still think like a family business, even though they're a really big company.
"I choose people before the company, so that's why I promote them. I also will add, they make tiles with soul and passion, it not just about the dollar. How can I say? Simpatico. We are very connected, we interface beautifully together, in other words.
"So there is an emotional connection. Our principles and ethics are identical, and I've never had an argument in 30 years.
"That's how long I've been dealing with them. We've had issues but we fixed them. It's never a problem, we fixed them. Now to me, that's worth a lot of money. They may cost a little more, but I've never, ever been put in a position to let down or disappoint a client."
StephUC2020-12-15T09:16:32+11:00
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