Shaw Industries

Shaw Industries – Flooring Giant

“We are a one-industry company: carpeting” So said Robert E. (Bob) Shaw, president and CEO of Shaw Industries in 1985 when interviewed by Textile World magazine for their annual Mill of the Year award.(1)  Since then, Shaw technically is still a one industry company, but that industry is flooring.  Several years ago, they began diversifying into every industry that sold something that people walk on.  Now (2010), they are the largest floor covering company in the world.  The competition then: Shaw competed in an industry where 90% of the manufacturers were engaged in the same enterprise –tufting- and 81% of their product was made using the same basic fiber- nylon.  How did a small north Georgia supply firm make its way to the top U.S. carpet producer and then to the top total flooring company?  According to Shaw: “Through implementing.  We put a concentration of sales people around our regional warehouse.  We put in the right computer system.  Through it all, we remained the low-cost producer.”  Couple that with astute acquisitions and purchase of the best equipment available as soon as a new development appeared and you have a strategy for success.  Citing statistics for the 1985 Award, Record sales of $454.2 million for the fiscal year ended June 30, 1984; a 51% jump over 1963; Record earnings of $22.9 million, a 130% increase ; Net return on average equity of 26.2%; Sales/employee of $96, 638; and earnings per share of $2.70.(1)

The company started as a Dalton, Georgia finishing house called Star Dye Co.  Bob and his brother inherited the business from their father in 1960 and changed the name to Star Finishing Co.  By 1967, Star was a $3 million business – they acquired Philadelphia Carpet Co., a woven carpet mill founded in 1846.  Shaw Industries began.  For the company logo, Shaw chose the star emblem with a Liberty Bell in the center.  Along the way, Shaw had standing orders with the finest equipment suppliers such as Kurt Zimmerli, owner of ZIMA Corporation, Spartanburg, SC who represented the Kusters continuous dye applicators. (4)  Shaw also began a backward integration to become more and more a vertical operation.  In 1985, Shaw had six yarn-producing plants:

1970 Built Plant 5 in Dalton;
1974 Bought Calhoun, Georgia plant from Syntex Corp.;
1976 Bought Decatur, Georgia plant from Filtex;
1981 Bought Valley Head, Alabama plant from Desoto Falls Inc.;
1983 Bought Fitzgerald, Georgia plant from Modern Fibers, Inc.;
1984 Bought Stevenson, Alabama plant from Avondale Mills.

Expansions at these plants occurred almost continuously.  

In 1985, Shaw was the world’s largest producer of tufted carpet.  They built three of their six carpet plants and bought three. (2, 3)

The story goes on and on with further acquisitions of carpet companies and fiber producers and can best be told by other references.  Berkshire Hathaway Inc. acquired the company in 2001, Bob Shaw retired in 2006.  In 2010, the company had sales over $5 billion. (2)

Sources:

  1. L. A. Christianson, Jr., “Shaw tends to its tufting and piles up record sales,” Textile World. June 1985 p 35-59.
  2. Wikipedia, “Shaw Industries.” is most up-to-date.
  3. http://www.fundinguniverse.com/company-histories/Shaw-Industries-Inc-Company-History.html an excellent history through 1993.
  4. Kurt Zimmerli and Kusters, http://www.kusterszima.com/Main/history.php