Shaw exiting area rug business
January 6, 2014,
DALTON, Ga. — Shaw Industries, the country's third largest area rug supplier as ranked in 2013 by Home & Textiles Today, has announced that it is exiting the area rug business and will convert its current Ringgold, Ga. rug facility into a new state-of-the-art luxury vinyl tile manufacturing facility.
An exact timeframe has not been set yet. But Susan Rich, Shaw Industries' director of corporate communications, told H&TT that the company's Shaw Living rug division will be participating in the Atlanta International Area Rug Market this week, and will treat the transition on a customer by customer basis.
"Supporting our customers through this transition is extremely important," Rich explained. "We have available inventory to service our customers through a transition period, which may vary by customer."
In a company statement, issued this morning, Shaw Industries' chairman and ceo Vance Bell offered an explanation for the division's closure.
"The economics of the rug business today simply do not allow for future growth or encourage further investment," he said.
He added that the company has been "intentional about exiting this business at a time when more opportunities exist for our associates," and that the vast majority of the 400 associates employed by Shaw Living will have opportunities at other locations in the company.
Based on H&TT research and reporting, Shaw Living experienced a 2.5% total sales increase in 2013 to $280.9 million from the year-ago's $274 million. 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.
However, Shaw Industries noted luxury vinyl tile (LVT) "is the fastest growing category in the flooring market today." The company has been participating in this market for three years, but up until this point has not manufactured LVT. In repurposing the current facility to a new LVT manufacturing site, Shaw said it will be able to shorten the timeframe to begin manufacturing the product, utilize an existing facility, and keep jobs in the Ringgold area.
Shaw plans to invest over $100 million in its new LVT manufacturing facility and when complete, the investment is expected to generate 200 new jobs in the Ringgold, Ga. area. This investment follows $250 million in other recent expansion announcements by Shaw in carpet tile, hardwood flooring, yarn extrusion, and distribution.