A band of disaffected Carpet Court franchise owners have broken away from the group to form a new rival retail flooring venture.
The new 40-store Flooring Xtra co-operative - which includes 18 former Carpet Court store owners - looks set to challenge the might of the 55-store Carpet Court group.
Formerly a co-operative, Carpet Court has undergone a structural shift into a franchise model, following Auckland businessman Rodney Martin's investment vehicle Lincoln Capital Partners taking a controlling interest last year.
Flooring Xtra chairman Henry Van Dyk said the change meant it was no longer "financially acceptable for several stores. An alternative had to be found, which resulted in the creation of Flooring Xtra."
Van Dyk is joined on the Flooring Xtra board by Don Barry, Rex (Butch) Goodwin, Paul Rillstone and Andrew White - all of whom were previously involved with Carpet Court at management, advisory council or board level.
The co-operative, which has adopted an environmentally sustainable approach to much of its practice, already has 40 stores nationally, with a gross revenue of more than $100 million.
Van Dyk expects a further eight to 10 retailers to take up the Flooring Xtra brand before Christmas.
"It was our aim to be the best quality retail chain in New Zealand, not the largest, but such has been the response to the vision for our brand this may well happen."
The newcomer will compete directly with Carpet Court in some areas such as Tauranga and Albany in Auckland, but Martin was unfazed.
"They're our competitor - they're obviously growing into a strong competitor, but that's business.
"The franchise model is a more disciplined business model and I continue to believe that it will outrun any other business model, including the co-operative business model."
Despite gaining eight franchisees in the last month, the departure of the 18 Carpet Court stores means Martin has lost a total of 10 stores, with annual group revenue falling back to $165 million from around $200 million previously. But Martin said the goal of having the group control 50 per cent of the New Zealand market remained.
"We're still on the path for acquisitions in New Zealand and Australia."
The incumbent - Carpet Court
* Country's largest flooring retailer.
* 43 stores in rural and city locations, plus 12 outlets of sister brand, The Floor Store.
* Annual revenue of $165 million.
The challenger - Flooring Xtra
* New retail flooring co-operative.
* 40 stores around the country, including 18 former Carpet Courts.
* Annual revenue exceeding $100m.