EDGE Bob Shaw: Engineered Floors will 'get a good bit' of carpet growth

EDGE Bob Shaw: Engineered Floors will 'get a good bit' of carpet growth

April 1st, 2018 by Mike Pare in EDGE

Contributed photo Catherine Cansler Photography / Bob Shaw, founder and chairman of Engineered Floors, talks with Piet Dossche, founder of USFloors, at the recent Junior Achievement of Northwest Georgia Business Hall of Fame meeting.

Photo by Contributed Photo /Times Free Press.

“The carpet industry is on the mend. We're going to get a piece. We're going to get a good bit of it.”
Bob Shaw, founder and chairman of Engineered Floors

When it comes to carpet and housing starts, businessman Bob Shaw likes to say there has been "a depression" over most of the past decade or so.

"We started down in 2006 and hit the bottom in 2008 and early 2009," he says. "We've been in a depression since then if you look at housing starts."

But the 86-year-old executive says things are looking up in 2018 for both housing and the carpet business. He expects 2018 to "probably be the first up year," with housing starts slated to hit 1.3 million this year.

"The carpet industry is on the mend," he says adding that "We're going to get a piece. We're going to get a good bit of it."

For Shaw, that's good news for him and the Dalton-based carpet company he founded nine years ago called Engineered Floors. But while Shaw says there has been a "depression," Engineered Floors has grown rapidly over the decade to become a major player in the industry with more than 4,600 employees and plans to hire more.

Contributed photo Catherine Cansler Photography / Bob Shaw drinks a toast as he was named to the Junior Achievement of Northwest Georgia Business Hall of Fame.

Contributed photo Catherine Cansler Photography / Bob Shaw...

Photo by Contributed Photo /Times Free Press.

Last year, Engineered Floors bought substantially all the operating assets of competitor Beaulieu Group, which had earlier sought Chapter 11 bankruptcy protection. Engineered Floors' U.S. sales in 2016 were put at $659 million by industry magazine Floor Focus.

Kemp Harr, publisher of Floor Focus, says he expects Engineered Floors sales in 2018 to come in at more than $1 billion. The level of revenue will catapult Engineered Floors to the third largest carpet company in the U.S., he says.

Shaw made a name for himself in the carpet business over many decades when he headed Shaw Industries, building that company into a giant in the sector. Shaw Industries was sold in 2001 to Berkshire Hathaway Inc., the holding company of investor Warren Buffett.

Shaw retired from Shaw Industries in 2006, and then decided to create Engineered Floors at age 77.

"I think it's kind of unusual," says the company's founder and chairman.

The emergence of Engineered Floors was due in large part to what Shaw calls "a step-change" in the carpet industry.

"We called it disruptive technology," he says. "We were making some carpets a little bit different than competitors."

Harr says Shaw made investments in the latest technology, which helped take costs out of production with the use of "super-efficient" equipment.

Some of his success is thanks to the special technology that eliminates the step of dying the yarn before it is turned into carpet. Instead, the yarn is dyed at the same time it is made, saving millions of gallons of water used to dye the yarn, millions of dollars in heat energy used to dry it, not to mention the money saved on labor.

"It helped speed up the process," Harr says, adding that the creation of Engineered Floors was "a big deal" in the industry.

Shaw says that, to him, disruptive technology means two things — making a better piece of goods and doing it at a less costly price.

"I've yet to find disruptive technology that makes something more expensive," the carpet manufacturing pioneer says.

Also, Shaw has focused on producing carpet while hard surfaces have penetrated the marketplace. But, he says, hard surfaces are much more expensive than carpet.

He quips that he's a great believer in one thing: "I've yet to find any hard surface put over carpet. I do find rugs put over hard surface. As soon as they put an ugly floor down, we'll cover them up."

For Dalton, the so-called carpet capital of the nation, the downturn in the economy a decade ago was, by any measure, severe. Last September, its unemployment rate of 5.0 percent finally toppled to its lowest mark since September 2007. The metro area's jobless peak took place more than seven years ago at 13.6 percent.

For Shaw, Dalton is back on the rise.

"Our businesses are back on their feet. Our bankers are smiling again. Let's declare the depression over with and I think as Trump says we're going to return to great," he says. "We're proud people up here."

Shaw says he believes Dalton's horizon is considerably larger than it was even in the past.

"If you go back 50 years, there was no serious dollars in Dalton," he says. "We have serious capital dollars in Dalton. We don't have to go out and beg the bank if you go out to do something. We're prepared and ready to take on projects that are worthwhile."

As joblessness falls, many companies worry about getting enough qualified workers. Shaw says the Dalton area's workforce is much more educated than it was in 1980, for example.

"A lot of what we're doing is we've modernized," he says. "Rather than making yarns at one mill, making carpet at another, dying at another, we've put it all in."

Shaw touts what he calls an Engineered Floors "mega-mill" at 2.7 million square feet in size.

"We believe it's the largest manufacturing facility in the Southeast under one roof," he says. "We'll claim that until someone else claims it. They've got to prove us wrong."

Shaw, recently named to the Junior Achievement of Northwest Georgia Business Hall of Fame, says Engineered Floors couldn't have done what is has without "good people."

"We've got a lot of trained people here in Dalton," he says. "I'll say our crew is having fun. They know we're making progress."

Asked about his personal plans are for the future, Shaw has a one-word answer: "Work."