Shaw departing area rug business
Thomas Lester -- Home Accents Today, January 6, 2014
Shaw Inds. announced on Monday that it is exiting the area rug business.
In conjunction with the announcement, the Dalton, Ga.-based company, which is wholly owned by Berkshire Hathaway, Inc., revealed plans to convert its Ringgold, Ga. rug facility into a state-of-the-art luxury vinyl tile manufacturing facility.
"The economics of the rug business today simply do not allow for future growth or encourage further investment," according to Vance Bell, chairman and CEO in a statement. "We have been intentional about exiting this business at a time when more opportunities exist for our associates."
Shaw plans to invest more than $100 million in its new luxury vinyl tile manufacturing facility and when complete, the investment is expected to generate 200 new jobs in the Ringgold area. This investment follows $250 million in other recent expansion announcements by Shaw in carpet tile, hardwood flooring, yarn extrusion, and distribution.
"We will continue to invest in businesses where we see future growth and opportunities," said Bell. "Over the past few years, we have developed a significant business and market-leading position in the LVT flooring category. This new facility will provide domestic manufacturing for a portion of our product line, allowing us to further enhance our product development, service, and overall customer satisfaction."
The release noted that the vast majority of the 400 Shaw Living rug division employees will have opportunities at other locations in the company and customers will be serviced through a transition period. Shaw Living will be at this week's Atlanta International Gift & Home Furnishings Market.
"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."
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 when it did, 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.
Based on sister publication Home & Textiles Today's research and reporting, Shaw Living experienced a 2.5% total sales increase in 2013 to $280.9 million 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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