By Matthew Spieler
Dalton—Robert Shaw, the face of Shaw Industries and one of the main architects of the modern floor covering industry announced his plans to step down effective Sept. 1. He will remain on the board and will advise, at the request of management, on long-range planning which includes potential acquisitions. Vance Bell, executive vice president of operations, has been elected to succeed Shaw. At the same time, Randy Merritt, executive vice president of sales and marketing, was elected president, succeeding Julian Saul, who retired July 14 (see Bell, Merritt story this page).

The only CEO the company has ever known since the position was created in 1958, Shaw, who turns 75 this month, will leave behind a legacy dreamt of by many yet achieved by very few.

Warren Buffett, the world famous head of Berkshire Hathaway, Shaw’s parent company since 2001, noted the level of success Shaw has achieved during his 48 years with the company is a rare feat. “There aren’t many stories like his,” he said. “In effect, he’s the equivalent in the floor covering industry as legends in other industries have been.”

Upon his retirement, he will leave behind a business that began as a small dye house to a company with approximately 30,000 employees; more than 70 manufacturing plants in seven states and scattered over 32 communities; 31 regional distribution centers across the U.S.; one of the largest private trucking fleets in the country; a product range that consists of more than 25,000 styles and colors, and annual sales approaching $6 billion. Its operations are so massive, that every year Shaw manufactures more than 700 million square yards of floor covering—enough to wrap a 6-ft.-wide path around the Earth’s equator seven times.

The Dalton high school alumnus began his career in the early 1950s selling yarn and chemicals after attending the University of the South. He later joined the family business in 1958 as CEO.

Shaw Industries officially got its start in 1946 as the Star Dye Co. It was a company that dyed rugs, spreads and robes, and was purchased by Bob’s father, Clarence, who ran the operation.

When the elder Shaw passed away in 1958, Bob took over the family business, becoming its first CEO, and quickly decided to expand the company into finishing carpet. The business name was also changed to Star Finishing.

In 1968, Star Finishing was put under the umbrella of the Philadelphia Holding Co., a business organized by J.C. (Bud) Shaw, Bob’s older brother, a year earlier to purchase Philadelphia Carpet Co.

Three years later, with annual sales of $43 million, the brothers took Philadelphia Holding Co. public as Shaw Industries.

It is at this point when Bob started to revolutionize the industry with a series of moves that would eventually make Shaw the world’s largest carpet manufacturer, as well as a full-service flooring supplier.

His first was in 1972 when he bought a yarn plant, which was followed up a year later with the purchase of a continuous dye plant. These early acquisitions set the framework to make the company the industry’s low-cost producer and giving customers added value and better service.

Important Advancements

The 1980s was a period filled with important advancements for Shaw and, in turn, the industry. A major under taking to modernize all plants and equipment in the early part of the decade allowed Shaw to quickly respond to new technologies such as stain resistant carpet.

In 1982, Shaw took a bold move to service independent retailers directly, and created a trucking subsidiary which dramatically improved the quality and speed of shipments to retailers nationwide.

A year later, six regional distribution centers were set up, with three more opening up in the next two years. Today there are 31 centers across the country. The year 1983 also saw Shaw acquire six yarn spinning mills, furthering its vertical integration.

The year 1985 saw Shaw officially become an American icon. He had grown the business to more than $500 million in sales and saw it listed for the first time on the Fortune 500 as one of America’s largest corporations.

Not content to rest on his laurels, Shaw led the charge for industry consolidation with numerous acquisitions. In 1987 it was WestPoint-Pepperell’s carpet and rug division and the Cabin Crafts and Strattan brands. Two years later it was the carpet division flagship Evans & Black brand of Armstrong. Then came Salem Carpet Mills and the Sutton brand, followed by Amoco’s polypropylene fiber production facilities, which made Shaw the largest extruder of polypropylene in the world.

Its largest carpet acquisition came in 1998, when it purchased Queen Carpet for approximately $600 million, then the fourth largest mill with sales of $800 million.

Jump forward to 2003 and Shaw bought the north Georgia operations of the Dixie Group, acquiring such brands as Carriage Carpets, Bretlin and Globaltex.

Just last year, Shaw’s acquisition appetite continued with the purchases of SI’s backing operations and Honeywell’s Anso and Zeftron production facilities.

In addition to carpet, Shaw recognized the trend to be a full-service flooring supplier. It started in 1993 when Shaw Rugs was formed. As the 20th century was coming to a close and moving into the early part of the 2000s, ceramic, laminate and wood were added to the mix, including a laminate manufacturing plant in Ringgold, Ga.

While 1971 could be marked as the start of the modern Shaw Industries, 2000 will be remembered as the year Shaw entered its next phase of life. That is when Shaw agreed to the acquisition by Buffett’s Berkshire Hathaway. Two years later, the investment company acquired the last of Shaw’s stock, thus giving it 100% ownership.

Continually differentiating its service and adding value for customers motivated every major move in the company’s development. “Our business is about meeting customers, figuring out what they need, and supplying that need,” he said. “That’s been our commitment from the beginning.

“I would also like to thank all our people, customers and suppliers for their support and for the loyalty they have shown me and Shaw Industries over the years.”