DALTON, Ga.–Shaw Industries has announced that it is exiting the area rug business and plans to convert its Ringgold, Ga., rug facility to a state-of-the-art manufacturing facility for luxury vinyl tile.
“The economics of the rug business today simply do not allow for future growth or encourage further investment,” said Vance Bell, chairman and CEO. “We have been intentional about exiting this business at a time when more opportunities exist for our associates.”
Shaw said the vast majority of the 400 employees in its rug division will have opportunities at other locations in the company. Its customers will be serviced through a transition period.
The company will still exhibit at the Atlanta International Area Rug Market and the Las Vegas Market this month, a spokesperson said, though these showrooms—which also include ones in New York and in High Point, N.C.—will be vacated over the next few months and turned back over to the respective landlords as the leases expire.
Shaw has been in the area rug business since 1987, after its purchase of West Point Pepperell’s carpet and rug business. The rug category accounts for two percent of Shaw’s total consolidated revenue, the spokesperson said.
Calling luxury vinyl tile the fastest growing category in the flooring market today, Shaw has been participating in this market for three years, but has not manufactured this product up to this point. In repurposing the current rug facility to a new luxury vinyl tile manufacturing site, Shaw will be able to shorten the time frame to begin manufacturing the product, utilize an existing facility and keep jobs in the Ringgold area, the company said.
“We will continue to invest in businesses where we see future growth and opportunities,” Bell said. “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.”
Shaw said it plans to invest more than $100 million in its new luxury vinyl tile facility, and, when finished, the investment is expected to generate 200 new jobs in the Ringgold, Ga., area. This follows the company’s previously announced $250 million targeting expansions in carpet tile, hardwood flooring, yarn extrusion and distribution.