Countertop Makers Find A SOLID NICHE

Lower prices trigger rise in mainstream demand; four new facilities opening

By Mike McLean
May 17, 2007
Journal of Business

A rising mainstream demand for natural-stone, stone-tile, and manufactured-stone countertops is driving a recent expansion of fabricators and installers in the Spokane-Coeur d’Alene area, industry representatives here say.

Longtime Spokane Valley stone fabricator and installer Mario & Son Inc. is building a second, larger facility in Liberty Lake, and Coeur d’Alene-based Great Floors LLC is building a granite fabrication plant in Post Falls in projects that are expected to be completed in August and mid- June, respectively.

Import Stone Inc., an Anaheim, Calif.-based natural stone wholesaler, is planning to open a 13,000-square-foot service branch with five employees in June in the same Spokane Valley complex as Precision Countertops.

“There’s more than enough demand for everyone,” says Ken Bartolotta, local operations manager for Portland-based Precision Countertops Inc., which this month opened a 40,000-square-foot retail, warehouse, and fabrication facility in the Spokane Business & Industrial Park, at 3808 N. Sullivan.

Bartolotta says the Precision Countertops facility opened up with 22 employees, and is about to add another 14 workers.

He says the major contributor to the consumer desire for stone countertops is that the price is half what it was a decade ago due mostly to automation in stone fabrication.

Precision Countertops also has plants in Seattle and Portland, where it is primarily a wholesaler of countertops. Spokane Valley is the company’s first entry into the retail market. It expects to make about half of its sales here directly to consumers and the other half to contractors.

“We have forecasted Spokane will be in the top 10 markets for growth in the next decade,” he says. “That’s what we’re here for.”

He says Precision Countertops can measure 20 kitchens one week, make custom countertops for those kitchens, and install the countertops the next week.

“We’ll bring in more machinery as the lead time starts to extend,” he says.

As reported earlier, Mario & Son Inc., a Spokane Valley stone fabricator, is constructing a $5.5 million, 44,000-square-foot facility at 2750 N. Eagle Lane, in Liberty Lake, but now plans also to retain its lease on its current 13,000-square-foot plant at 6523 E. Main, says Joey Marcella, the company’s president.

He says people choose a solid- or manufactured stone surface for countertops because of its “timeless” appearance.

“It’s also durable,” he says. “It doesn’t burn, and it’s difficult to scratch.”

He says a quartz-composite type of manufactured stone is continuing to gain momentum, because it’s less expensive than granite and doesn’t need a sealant like some natural-stone surfaces that are more porous.

“Quartz is 40 percent of our business,” Marcella says. “Nationwide, it’s 17 percent of the countertop market.”

Stone countertops are in high demand for remodeling projects, he says.

“The first thing people remodel is the kitchen,” he says. “We’re replacing a lot of laminate with stone or quartz.”

Marcella says he once considered custom-home countertops to be Mario & Son’s niche, but the company has been expanding down into the mid-level housing maket for the past five years in part through its association as a subcontractor with Spokane-area Home Depot Inc. stores.

“We’ve put stone countertops in $150,000 homes,” he says. “Until recently, that was unheard of.”

Marcella says Mario & Son’s revenue has been growing about 30 percent annually in recent years. He’s expecting about $60 million in revenue this year, up from $2.5 million in 2004.

The company has about 30 employees and expects to add 20 more by the time its Liberty Lake facility is fully operational, Marcella says.

Corey Condron, vice president of Condron Construction Inc., the longtime Spokane-based home builder, says stone countertops aren’t yet the standard for that company’s starter- to mid-priced new homes, but are common upgrades.

Condron Construction builds homes that range in price from $180,000 to about $450,000, he says.

About 20 percent of buyers of homes built by Condron Construtction order stone countertops today, up from 5 percent just a few years ago, Condron says. “In our price range, that’s a significant swing.”

Condron says the company started putting solid stone in some homes it built speculatively, meaning without a buyer lined up, when potential buyers began to turn away from homes that didn’t have them.

“I’m learning,” he says.

Home buyers are much more likely to put extra money into the kitchen rather than bathroom countertops, he says. For a standard-sized kitchen, a slab-granite upgrade, in which a countertop is cut from one piece of stone, adds about $5,500 to the price of a house.

The granite-tile option is cheaper, adding $2,500 to $3,000 to the base home price.

“I prefer to put granite tile in spec houses,” he says.

Spencer Freeman, manager of the Great Floors LLC store on Spokane’s North Side, says a growing number of home buyers want and expect stone countertops.

The Coeur d’Alene-based chain is building its 23,000-square-foot Great Floors Granite & Stone Center at 3293 Seltice Way in Post Falls, and plans to open it in June with 15 to 20 employees.

Freeman says just about any new home bult today with a value of more than $300,000 will have natural or fabricated stone countertops in the kitchen area and often in the bathrooms.

“Customers pick out kitchen flooring, countertops, and cabinets all at once,” Freeman says. “That’s how a flooring company ends up in the countertop business.”

John Rhineberger, president of Import Stone, says Precision Countertops is one of its big customers.

Rhineberger says he hears other stone distributors may also be looking at the Spokane market.

“This is a great business, and a little competition is good,” Rhineberger says.