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Shaw Rugs sets push into big-box channel

By Lissa Wyman -- Furniture Today, September 16, 2001

DALTON, Ga. — DALTON, Ga. — Shaw Rugs is planning a major push into the mass market retail channel.

Jeff Meadows, vice president of the Shaw Inds. division, said, "We are looking at 12 or 13 customers who control half the (rug) business. If you're going to be a big player, you have to do business with the big retailers."

Currently, Shaw's mass-market partners include Bed, Bath & Beyond and Linens 'n Things, and a test program is under way with Target. "We're calling on Kmart, and all (the big-box stores) are on our radar screen," Meadows said.

"Mass market retailers need vendors they can count on to manufacture exclusive product lines and keep the store shelves stocked," he said. "Only a few companies such as Shaw or Mohawk have the resources to fully service these accounts."

Compared to other items in big-box stores, rugs sell for some six times the average ticket price and about two-and-a-half times the average profit margin, Meadows said.

Eventually, Shaw likely will get into the bath rug and textiles arena, probably through acquisitions, he said, adding, "Mass merchants prefer to work with suppliers who have a large range of products."

Branding is important in both mass market channels and furniture and department stores, said Meadows. "We may develop certain branded programs for mass merchants, but we also will continue to protect the high-end retail channels with exclusive products geared specifically to their needs," he said.

The Kathy Ireland brand has been added to Shaw carpeting and the company is currently evaluating Kathy Ireland Home in hard-surface products such as laminate floors, said Meadows.

Shaw Rugs and Kathy Ireland are teaming up for a children's rug presentation, which will debut at the New York Home Textiles Market in October, he said.

Tommy Bahama rugs were introduced in Atlanta this summer. Shaw is using that brand to get involved in the importing business and the hand-made rug market. In January, the company will introduce sisal and hemp rugs from India. "By next April, we may also have Tommy Bahama hand-made rugs from China," said Meadows.

Shaw Inds., parent of Shaw Rugs, is this country's largest carpet and rug maker. It became part of Berkshire Hathaway early this year. The latter owns several major regional furniture retailers.

Meadows

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