Shaw leaving area rug business
Thomas Lester -- Furniture Today, January 21, 2014
Dalton, Ga. - Shaw Inds. said last week it's exiting the area rug business.
The company, which is owned by Berkshire Hathaway, said it will convert its Ringgold, Ga., rug factory into a luxury vinyl tile manufacturing facility.
"The economics of the rug business today simply do not allow for future growth or encourage further investment," Vance Bell, Shaw chairman and CEO, said in a statement. "We have been intentional about exiting this business at a time when more opportunities exist for our associates."
Shaw Living showed at last week's Atlanta International Gift & Home Furnishings Market. The company said existing customers will be serviced through a transition period.
"Supporting our customers through this transition is extremely important," said Susan Rich, Shaw Inds. director of corporate communications. "We have available inventory to service our customers through a transition period, which may vary by customer."
Shaw said it plans to invest more than $100 million in the vinyl tile plant, which it said is expected to generate 200 new jobs in the Ringgold area when complete. This investment follows $250 million in other recent expansion announcements by Shaw in carpet tile, hardwood flooring, yarn extrusion and distribution.
The release said the majority of the 400 Shaw Living rug division employees will have opportunities at other locations in the company.
While the timing of the decision was unusual due to the beginning of the winter market cycle, Rich said Shaw officials felt that by making the announcement now, customers would have time to react accordingly.
"We want to be honest and transparent with our valued associates and customers. Once the decision was made, it was important to communicate to those impacted," Rich said.
It was unclear at press time what the decision means for Shaw's licensees, including Bob Timberlake Inc. Rich said the company's existing agreements would be handled directly with the companies or individuals.
Jim Slagle, president of Bob Timberlake, Inc., said he got the news about Shaw's exit on Jan. 6, the day the company made the announcement. Slagle said he enjoyed working with Shaw and he's sorry to see it leave the rug manufacturing arena. He indicated that Timberlake will continue to work with Shaw through the transition as officials determine their next step.
"We've already met (with Shaw officials) and we'll meet with Bob later this week to discuss his wishes for floor covering within our whole plan here at Timberlake," Slagle said. "We're constantly monitoring our options and how things like this can change and what our intentions would be going forward."
Based on sister publication Home & Textiles Today's research and reporting, Shaw Living had sales of $280.9 million in 2013, up 2.5% from $274 million in 2012. This growth was attributable to strides the company made in the home center and higher-end retail channels, as well as to Shaw Living's reorganization of its sales team for its flooring/furniture segment.
Shaw Inds. remains active in carpet, carpet tile, hardwood, resilient, laminate, tile and stone, and sports turf for residential and commercial markets.
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