Dalton—Bob Shaw has always been the ultimate disrupter. Bypassing traditional distributors. Backward integration. Trying his hand at retail. And those were eons ago. The living legend has a way of shaping the flooring industry.
More recently, about 15 years ago to be exact, Mr. Shaw at age 77 came up with the idea to launch another carpet company. Not just a carpet company. A carpet company that rather than focus on the traditional nylon and post-dyed PET fibers would instead sell solution-dyed polyester. It was going to be a way to better control quality. It was certainly going to be another way to disrupt.
Mr. Shaw thought the industry needed a better mousetrap and pre-dyed or solution-dyed yarns was the answer, a.k.a. PureColor. “We were using way too much energy, way too much water in dying the carpet—plus, there was the challenge of consistently making one dye run after another in the same color with a match across side to side, end to end,” he had told Floor Covering News.
A decade and a half later, he says Engineered Floors makes the best piece of carpet in the industry. There are many who would not argue with that statement. The company sells more than $1.5 billion of carpet annually.
Now Mr. Shaw and Engineered Floors are returning to the well once more, borrowing a page from the same playbook as PureColor with its brand-spanking-new SPC facility here. Again, the company will not just be making SPC. Whereas solution-dyed polyester was the differentiator with carpet, digital printing is being positioned as the difference maker on the hard surface side. In fact, EF is the only domestic manufacturer with digital printing/digital embossing capabilities currently spitting out quality product. That product is called PureGrain.
Why digital printing? Just like with solution-dyed polyester, it’s all about quality, design, value and control, Shaw told FCNews. “If we say LVT is going to be manufactured in China, that’s an absolute mistake. You can get a much better return with a container filled with Nike shoes or clothes than LVT. You can’t ship clay across the world [competitively]. Once you get into heavier materials, [producing domestically] is like having what I call a moat you built around you because the importers can’t compete. Just like carpet has always had a moat built around us [because of the weight of the product].”
Engineered Floors opted to invest tens of millions of dollars into digital printing/digital em- bossing as opposed to the traditional film for the visuals. “We can show with film you’re having a repeat pattern every 4 feet. And if you’re buying your film and buying your base and all you’re doing is putting them together over here, it’s the same principle as when we used to say we were carpet manufacturers but didn’t make our own yarn. Or it’s like the automobiles. We say we make our own automobiles but we are just bringing in the parts and putting them together here.” PureGrain is the opposite. “We get our clay from Kentucky and Tennessee. We don’t have to go anywhere to get our raw material,” he said.
Mr. Shaw will tell you that Engineered Floors’ solution-dyed polyester is the best value for the dollar in carpet. He says that same philosophy holds true for SPC. “It holds on everything we do,” he said. “This will be the best product out there for the money. Best product, less expensive, better value, more competitive.”
Focus on quality
Quality was also a driver for creating the SPC production line in the same build- ing that once housed Coronet’s $195 million carpet business. “We saw so much coming in from China, and then what was being sent over to Vietnam trying to beat the tariff,” Shaw said, noting that the consistency of the product could not be assured. “You really don’t know about the quality of a product until it’s on the floor. It has to go through all the [fluctuations] of temperature, expansion, etc. The last thing you want to do is get a bad reputation going into a business. You want to be slow; you have to prove to yourself that you can repeat the excellence.”
Shaw again likened this to the disruption of solution-dyed yarns. “We knew 12, 15 years ago that we were making pass- able seconds when we were piece-dying, but we had white yarn and either had to beck dye it or continuous dye it,” he said. “But once you got to pre-dyed, the consistency of your manufacturing went up tremendously. So 90% of your residential carpet business right now is going to be pre-dyed yarns.”
According to Mr. Shaw, it’s all about giving the consumer a better product. “We can’t be a good resource unless we’re in business for the long term. So, we’re re- ally working as a partner to that retailer, giving the consumer a better product. And once we give the consumer a better product, then both we and the retailer are going to win.”
Shaw says that because of solution-dyed yarns, the industry is making better carpet than it ever has. “It’s because you’re consistent with color. You don’t have it going through a bath, you don’t have to make sure your pile is going in the same direction because you’re setting your pile and dying. You don’t have to worry about that when you pre-dye.”
It’s the same concept for Engineered Floors’ digitally printed PureGrain, Mr. Shaw said. Better on design, better on quality. “This value is much more than not repeating your pattern. Value is the consistency of the product on how it’s going to be installed and lay on the floor. You have to go through all the temperature and moisture testing before you put it into the market.”
One of the reasons why digital printed SPC is superior to film is because you are actually making a print in the material itself, he said. “And you can make it where it’s continuous, where it looks like hardwood. Let’s face it. What we’re trying to do is duplicate hardwood because hardwood at one time was the single biggest flooring. And with hard surface, people want to know they’re not getting clicks when they walk on it. They want something very similar to having hardwood in their house.”
Engineered Floors is launching PureGrain with limited capacity to ensure quality. One line is currently in operation but another will be fully operational within 14 months. Mr. Shaw said eventually he envisions six lines that will be able to produce over 400 million feet assuming three shifts. “I think we will be manufacturing a billion dollars in less than five years,” he said. That would require some expansion beyond the old Coronet plant. The current facility can probably support two lines and somewhere around $300 million in sales.
Expansion doesn’t necessarily mean adding many people in the plant. So much of the production is automated, which has always been Mr. Shaw’s blueprint. “We have two things that we know will inflate for the rest of our lives: labor and energy. And if you can have less energy and less labor, you win the game.”
When you can combat the ris- ing costs of labor and inflation, the result is profit. “Profit, regardless of any business, you first have to make up your mind if you can be competed with because of something they have outside the country that will make you noncompetitive. Take the textile business. Once our labor cost got to be 20% to 25%, all that business left the United States. So when we look at labor cost, we are not going to do anything that takes more than 8%. Because you’re not building a permanent business.”
