With about 75% of this year in the rear-view mirror, most manufacturers are looking ahead to 2025, a year projected to be stronger than 2024. There are reasons for optimism: interest rate cuts, lower inflation and no Presidential elections to contend with. Shaw Industries is among those well positioned to capitalize on a stronger 2025 as the company has been taking a long-term view for some time as illustrated by its many investments. FCNews publisher Steven Feldman recently sat down with Tim Baucom, CEO, and Ben Liebert, executive vice president of residential, to discuss the recent past, the present and the future.
This has been a tough year for just about every company. What fundamentals have created the biggest challenges for Shaw?
Tim Baucom: We anticipated this year would be challenging, but our business is strong and we’re ahead of our plan. Our expectations included multiple interest rate cuts but we may only see one, and it’s likely too late to make a significant impact. Our greatest challenge has been residential housing, where demand is strong but supply is constrained by high interest rates. Until these rates come down, the pent-up demand for new and existing homes will remain unmet. The aging housing stock, with many homes built around 1980, also needs renovation, but the cost of financing those projects is a barrier. While we hoped for improvement by mid-year, ongoing uncertainty, especially around the election, continues to weigh on the market. Despite these challenges, we remain focused on innovation and long-term growth, ensuring that our products and services continue to align with customer needs and market shifts. This proactive approach helps us stay resilient in uncertain times.
I understand your commercial business remains strong.
Baucom: Yes, our school, institutional, retail, hospitality and turf businesses are all performing well. Turf, in particular, has seen a shift to synthetic products.
Ben Liebert: We’re fortunate to have a diverse portfolio across three business units—residential, commercial and turf. Within residential, we also think about our business in a portfolio model—retail, multifamily, single-family. And now that single-family isn’t competing as much with existing home sales, we feel very optimistic about this segment—even if it’s not at pre-2019 levels.
How do you manage a business in the face of declining sales?
Liebert: We understand that economic cycles happen every five to eight years. The key is to build a resilient, long-term business model that adds value to all parts of the ecosystem, especially in retail. It’s not just about Shaw—it’s about providing value to our partners, even in a downturn.
Baucom: Being part of Berkshire Hathaway is an advantage. They focus on credibility, autonomy and long-term thinking. In this down period, we’re reshaping our assets to meet future needs—especially in residential carpet where consumer preferences have shifted from solid color carpets made with nylon to patterned and multicolored carpets made with polyester. This transition has been costly and difficult, but it’s essential for staying relevant in the market.
What role does Berkshire Hathaway play in the direction this company goes in? How does it benefit the retailer?
Baucom: Berkshire operates with integrity and a focus on long-term health. They support us in making smart, sustainable investments, giving us the autonomy to grow across multiple categories—from carpet to LVT and engineered hardwood. This allows us to build lasting relationships with our retail customers by offering diverse, high-quality products that meet evolving market demands. Understanding the entire sales ecosystem—from the retailer and RSA to the installer and influencers—allows us to offer tailored solutions that benefit everyone involved in the customer journey.
We talk about business being tough, but we hear Shaw was an exceptionally profitable company in 2023. How did that happen?
Baucom: We focused on long-term planning, improving efficiency and adding value. Our customer-centric growth mindset empowers us to control our destiny. Profitability should naturally follow if we’re doing the right things. Profit is essential, but it’s a byproduct of making smart, long-term decisions.
What needs to happen in Washington D.C., aside from lowering interest rates, that will benefit Shaw and flooring retailers in general?
Baucom: We need reasonable, predictable and stable interest rates. Regulations also need to make it easier to build housing—whether single-family or multifamily. Housing affordability is a crisis, and it’s becoming unreachable for too many people.
There have been numerous changes here over the last six or seven months, specifically within the sales force. How does this benefit the company and the floor covering retailer?
Baucom: We’ve shifted to a more consultative approach—something we’ve heard that our customers desire. Retailers want salespeople who understand their business and help them achieve their goals.
Liebert: Change is necessary for growth. The pace of change has accelerated, and we need to stay ahead. The changes we’ve made are designed to strengthen relationships with our customers and associates, ensuring longevity and resilience in the business.
You have shifted some very talented people from the commercial side to the residential side. Talk a little bit about the mindset behind that, and how that benefited this company.
Baucom: The pace of change has increased, so we need decision makers who can act quickly and close to the customer. Moving talent between segments helps us align better with customer needs. Sustainability, for example, has long been a focus in commercial but is now more important to residential consumers.
Liebert: Cross-functional talent brings fresh perspectives to problem solving. The diversity of experience allows us to innovate and improve. Internally, it’s also a testament to the longevity of a Shaw career—you can have a full, varied career within our portfolio of businesses.
Everyone talks about Shaw commissioning Ernst & Young to look at the company. Tell me about some of their recommendations that you’ve implemented and how any of those may benefit the dealer short term and long term?
Baucom: EY’s experience in building materials helped us learn from other industries. Flooring is a key part of the interior space, but we’re not always recognized for that value. EY also helped us speed up decision making and get the right information to the right people.
Liebert: Their recommendations emphasized working closely with customers to solve their challenges. The real value lies in execution—bringing customers into the process and ensuring the strategies we implement directly benefit them.
Did you learn anything?
Liebert: Starting in January gave me access to a lot of data, but it’s more than just following the numbers. We asked, “What does this mean for our customers and products?” The customer was always at the center of the analysis, which was crucial. One key focus was how we can work more closely with our customers to make their lives easier, helping them tackle challenges in their business. While strategies are easy to outline, the real value is in execution—bringing our customers into the process and building a future together. Right now, we’re rolling out new concepts and decision-making tools, and the customer is at the heart of all of it.
Baucom: Each time [we explored findings from EY], I was impressed with how much untapped value we can bring to the customer. For example, the installation process is a major challenge in our industry, but we have solutions that make it faster and more efficient—like COREtec, which simplified acclimation and installation. EY also highlighted how we focus too much on technical details when we should be emphasizing the benefits to the customer. And with 40% of consumers deferring their flooring purchase due to an overwhelming process, there’s a big opportunity to simplify the experience and capture that deferred business.
Ben, you’ve been here eight months. First 90 days, you observed. Talk about the last 150 days. What have you been focusing on?
Liebert: We’ve been focused on processes, data and brand development. We’ve restructured, and we’re starting to see the benefits. The goal is to make faster, more informed decisions. We don’t wait for perfect information—we move forward with sufficient information. The focus has been on aligning our brand and product development efforts with market opportunities.
Tell me what you believe Shaw does better than every other company out there to help the retailer?
Baucom: Our relationships with retailers are genuine and long-standing. We hold ourselves accountable to being their most reliable supplier.
Liebert: Our customers value the relationship, but we want to go further. Our goal is to make ourselves and our customers better every day, not just solve immediate problems. That’s the next chapter for Shaw.
You’ve become the leader in WPC, SPC. Last year was challenging. Any plans to make a bigger commitment to domestic production as a result of that?
Baucom: Our strategy involves both domestic production and sourcing. Commercial products are often made-to-order, which aligns well with domestic manufacturing. On the residential side, sourcing has been more prominent due to the speed of innovation, but we continue to diversify our supply chain. The issues we faced last year were more about documentation clarity than production.
Carpet share continues to decline in relation to hard surface. Yet, you guys invested half a billion dollars in the Aiken yarn and fiber plant. Talk about Shaw’s commitment to carpet.
Baucom: We firmly believe carpet remains a crucial part of how people live, work and play. Open floor plans have become the norm, making hard surfaces ideal for public areas of the home. However, in private spaces, carpet is still the best option—it’s quiet, comfortable and offers great value. Customers tell us they want products that fit their lifestyles—whether it’s sound reduction, ease of cleaning or creating pet-friendly environments. Our Pet Perfect and Pet Perfect Plus lines are examples of how we’re delivering high-value, durable carpets that meet these needs, whether installed wall-to-wall or cut into a custom area rug.
The reason we’ve made such a significant investment in Aiken is that carpet remains vital for our specialty retailers. Carpet’s variety, customization and unique material handling make it a highly localized product category, and that’s where these retailers are most competitive. You won’t see big-box stores like Floor & Decor or MSI investing heavily in carpet because they’re more focused on products like ceramic and wood, which can be standardized and shipped easily. Specialty retailers on the other hand, thrive on offering customized carpet solutions, and we are committed to supporting them with products that differentiate them in the marketplace.
Liebert: We see managing our portfolio as key to our strategy. Carpet isn’t just one isolated category—it’s an important part of a broader ecosystem that includes LVT, hardwood and other surfaces. We understand how these products work together for our customers, and that’s where Shaw’s strength lies. We can offer a full range of flooring solutions, allowing our customers to find the perfect products for every part of their home or business. This holistic approach helps our retail partners by positioning them as one-stop shops for their customers, which is a major competitive advantage.
Costs are going through the roof for every business. Do you foresee price increases on the horizon?
Baucom: We’re focusing on efficiency to manage costs. There’s always a balance between cost and demand, but right now we’re working hard to hold the line where possible.
2025 is a Shaw Flooring Network convention year. Always a big deal. What can we look forward to?
Baucom: I hope our customers will see actions behind the words. At SFN two years ago, we committed to carpet and invested in Aiken. Now, they’re starting to see the products come to market. We want them to walk away seeing how everything we’ve planned is fitting together.
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