SHAW LIVING EXECS TARGET SPECIFIC RETAIL CHANNELS TO GAIN MARKET SHARE

By Lissa Wyman

RINGGOLD, GA -- Shaw Living, the rug-making arm of giant Shaw Industries,  is targeting specific channels of retail distribution to gain overall market share.

While the economic downturn has far-reaching effects on all business, that should not deter Shaw from its business plan, according to Jeff Brown, interim vice president of Shaw Living.

Brown and sales vice president Jim Curtin recently hosted an exclusive interview with Rugnews.com at company headquarters here.

"There is no denying that traffic is down in furniture and floor covering stores and both retailers and consumers are looking for value," Brown observed, "but at the end of the day, our position is to have more market share than our competitors. The economy will take care of itself."

In addition to rising gas prices and sluggish spending, costs are rising for all producers of flooring. Recently, there was a round of price increases in the carpet industry, the second of the year.

"It's very difficult to pass on our cost increases in a tough economy," said Brown. "We seem to be in a perfect storm situation right now."

Shaw, now a Berkshire-Hathaway Company, is a vertical producer of all types of floor covering. The company began manufacturing rugs in 1993. Brown came to the Shaw Living rug division in 2003 when Shaw acquired Georgia Tufters. He headed Shaw Living's mass market business and became acting vice president of the division in January 2008.

Curtin has been vice president of sales for Shaw Living since September, 2005. He has held a variety of sales positions with Shaw Industries for the past 18 years.

Brown is now responsible for the entire Shaw Living division, but continues to focus much of his effort on the mass market side of the business while Curtin concentrates on the  floor covering, furniture, rug specialty and buying group channels. 

In a rapidly changing business, both Brown and Curtin agree that each retail channel offers challenges and opportunities.

"The industry dictates which type of retailer is getting the emphasis at any given time," said Brown. "But with our channel and design leadership, Shaw will gain market share."

Brown and Curtin said the home center business is continuing to grow, and the company is also picking up market share in national furniture, floor covering and home furnishings chains.

The current state of the economy also plays an important role in the growth of  home centers and mass merchants, noted Curtin. "In general, those types of stores have better locations. With the cost of gasoline, people are not snooping around so much anymore."

Both Brown and Curtin also noted that the sheer number of mass market stores is also an important factor. "Let's face it, the mass market stores are everywhere," said Curtin.

Shaw's marketing strategy to slice-and-dice the various retail channels is helped by the fact that the company has the resources to develop differentiated product for each type of retail store.

"We develop lines in partnership with individual mass merchants based on price points. Our designs for specialty stores are different," Brown pointed out.

"We want to protect our distribution partners in every channel," stressed Curtin.

While consumer spending continues to weaken and costs continue to rise, Brown is sanguine about the future. "We are in this business for the long haul, and we continue our research and development efforts to bring better product to the consumer," said Brown.

"Our goal is to continue to give our retail customers fresh new looks in order to attract the consumer. When the consumer is ready to start spending again, we'll be ready for them," Curtin added.

Discussing what's selling now, Brown and Curtin said that casual contemporary looks in soft colors continue to do well. Shags are also hot, they said. "We recently introduced a value-driven shag that retails for $159 in 5x8. It's killer," said Curtin.

Shaw Living has the advantage of manufacturing in the USA, and its business remains focused on domestically produced machine-made tufted and woven products. "Imports are isolated to stores and price points that warrant it, but are a limited part of our business," Brown noted.

Shaw  Living has permanent showrooms in Atlanta and New York. The company closed its High Point showroom after the Fall 2007 market. Shaw Living also shows at the Tupelo furniture shows and the  Shaw Industries traveling regional showcases which are held in six or eight locations a year.

In January 2008, the Shaw corporate road show took place at AmericasMart Atlanta and ran concurrently with the International Rug Market. "That event was a big success, even though the weather was rough. We look forward to  doing it again in January 2009," said Curtin.

The Las Vegas World Market Center remains under study, according to Brown and Curtin. Shaw has exhibited in temporary quarters during the Las Vegas markets for the past two years. This Summer, Shaw Living will have a showroom on the second floor of Building B at the Las Vegas World Market Center.

"We are looking closely at that market, but have not reached a decision for permanent showroom space," said Curtin. "We are calling on the large Top 100 furniture chains, and we also see a fair amount of furniture stores during the Atlanta market."

CLOSED LOOP RECYCLING

Shaw Living is making a major commitment to the  Green Movement with its "cradle-to-cradle" recyclable rugs. 
Shaw introduced the first recyclable rugs in July 2007 with the Premiere and Natural Expression collections.