Bob Shaw Weighs In: The industry’s most prominent leader offers his thoughts - Aug/Sept 2022

Interview by Kemp Harr

It’s safe to say that Bob Shaw, co-founder of Shaw Industries and founder of Engineered Floors, has a unique perspective on the flooring industry after more than seven decades in the business. Here, he shares his thoughts on the dynamics of the current market.

Q: In an era when hard surface is taking share, now has Engineered Floors, a carpet-centered manufacturing venture launched only 12 years ago, found success?
A: I was 75 when I retired the first time back in 2006. After a few years, I got restless and decided that the soft surface flooring industry needed new investments that used the latest technology and eliminated inefficiencies in throughput.

The efficiencies we have today in comparison to when Bud Seretean built these offices is unbelievable. We’re using only about 15% of this 60,000 square foot building, and we’re doing nine times the amount of business that Coronet did. By reducing our dependence on manpower, Third World countries cannot beat us with their only strength: cheap labor.

In addition, Engineered Floors is a privately owned company. We have built right at seven million square feet of buildings in northwest Georgia since we started this company in 2010. None of our competitors have built anywhere near that amount in the same period. Our competitors really decided that they’d rather be distributors than manufacturers-that’s what you are when you are buying something, inventorying it and selling it.

Public companies must focus on how investors might react to a lack of growth. So public companies spend most of their time focused on Wall Street and not their core business.

If you decide to go into the carpet business today, you’re talking about roughly three years to ramp up, especially with no outside fiber producers. Who is going to do that? Yes, we did it 12 years ago, but the truth of the matter is, I didn’t like Berkshire Hathaway approach. Warren Buffett’s got 70 to 80 different businesses. He doesn’t become a citizen of any community. My mother taught school at Dalton High School before I was born. I’ve lived here for 91 years now, and my family is pretty connected with northwest Georgia.

Q: Is the U.S. headed for a recession?
A: Yes, we’re in a recession-no question. You can’t print new money like we have without eventually getting into a recession. All we’re doing is revaluing our dollar.

I’m not sure a recession is going to hurt the carpet business, because only 10% of our carpet has ever gone into new construction. The more people stay at home, the more they’ll spend disposable dollars redecorating their home. I see the carpet business doing well, and I see the LVT business doing well. And in the next ten years, most of the LVT produced for our domestic marketplace will be made here.

But I still think most of the opportunity is with carpet. We use one-third of the energy to make carpet compared to LVT. I call that pretty green. And what about water? Today, we use about 15 million gallons. We used to use 50 million gallons back when we wet dyed it. That is a drastic change.

Q: What kind of floor will the Millennial generation want to live on?
A: Millennials are going to rent more, and when you’re renting, you’re going to live with rugs on top of LVT, particularly in multifamily. Noise is a factor in these multilevel units, and carpet is the best solution for solving the noise issue.

I’m not sure we can guess what the next generation is going to want, but I do know they aren’t going to get as much for their money as we did. I remember when you could build a house for $10/square foot. Today, it’s $200/square foot, so a 1,500-square-foot house is $300,000. We’re in a strange time with devalued currency and 9% inflation.

Q: Will there ever be a time when Engineered Floors sells more LVT than carpet?
A: No. One is not going to replace the other. They serve two different markets. If you put LVT down, you’re going to put a rug on top of it. I expect the LVT producers will broaden their focus and move up the walls and into other areas.

LVT is mostly clay with a faux visual. Yes, Engineered Floors is going to start making it, but I have high hopes for the carpet business moving forward. It’s been a luxury statement in homes for over 200 years.

I’ll be 91 next month, and there is something to be said for the safety of carpet. At my age, I like having a rail to hold onto and something soft underneath me…just in case. And our population, quite frankly, is getting older.

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