Shaw showcases mass-market thrust in N.Y.
By Lissa Wyman -- Furniture Today, April 18, 2004
NEW YORK — NEW YORK— Buyers attending the home textiles market here last month got the first look at Shaw Living as a new player in the mass-market major leagues.
The company's new 7,000-square-foot showroom clearly indicated that Shaw Living, an important supplier of rugs to furniture stores, wants to be the Alex Rodriguez of the mass-market channel.
"When Shaw enters a new product category or distribution channel, the intention is to be either number one or number two," said Jeff Meadows, vice president of the Shaw Living division of Shaw Inds.
By 2005, Shaw Living expects to reach $300 million or more in sales, with about 70% of that in the mass-market channel and 30% in its current core markets of specialty floor covering and home furnishings stores, he said.
"Currently, our sales proportion is about the opposite — 70% in core channels and 30% in mass," he said.
Shaw defines mass market as national or regional retailers with multi-store outlets.
Last year, Shaw began laying the groundwork for its mass-market penetration. The acquisition of Georgia Tufters gave it a base of tufted bath and top-of-the-bed products as well as a solid customer list. In October 2003, the Shaw Rugs division became Shaw Living, reflecting the company's broader direction.
The building of the infrastructure is continuing. In early January, Shaw Inds. completed the purchase of certain assets of The Dixie Group. Dixie's Bretlin mat division went to Shaw Living as part of the acquisition.
"The Bretlin line gives us a solid base of equipment and technology to become a major part of the mat business," Meadows said. "In the coming year, we will concentrate on bringing innovative products into that segment of the market. We see a strong potential for that market."
Shaw also has purchased a great deal of manufacturing equipment from the now-defunct Pillowtex Corp.
While Meadows declined to comment on future plans, he noted the company is always open to acquisitions that fit long-range strategic planning.
In the near term, Shaw Living made its first major introduction of mass-market products at the recent New York Home Textiles Market. The company unveiled new bath rugs and printed rugs, and showed the Mary-Kate and Ashley line, which had been introduced in January.
For the long term, Meadows indicated there will be further differentiation between Shaw's core area rug line and products developed specifically for home textiles and mass-market channels.
"These are two separate and distinct markets, and they each require a separate marketing approach and product presentation," he said.
Shaw Living will make its penetration of the mass-market channel through new product categories as well as developing new looks for opening and midrange rugs.
"Presently, we are developing new products for top-of-the-bed markets, but we are not in the sheet and towel business," Meadows said. "However, we are open to developing coordinated home accents such as pillows and throws."
While many companies are going offshore for mass-market products. Shaw is committing most of its production resources to domestic manufacturing.
"In order to bring a full product assortment to market, we do have some imports," Meadows said. "For example, our hand-tufted Tommy Bahama line is imported. However, at this time we do not plan on making imports a major part of our business. Our strength is in manufacturing."
Looking forward, he predicts the rug business will become more consolidated.
"The rug business is certainly an integral part of the floor covering industry, which has gone through a period of major consolidation in the past 10 years," he said. "So it wouldn't be surprising to see further consolidation in this part of the industry over the next few years."
As more consumers buy rugs in mass-market stores, consolidation also becomes a necessity for vendors, Meadows noted. "Only very large companies have the capacity to supply major retailers," he said.
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