SIC 2273 Carpets and Rugs

Encyclopedia of American Industries | 2005 | Copyright

SIC 2273
CARPETS AND RUGS

This industry includes establishments primarily engaged in manufacturing woven, tufted, and other carpets and rugs such as art squares, floor mattings, needle punch carpeting, and doormats and mattings from textile materials or from twisted paper, grasses, reeds, coir, sisal, jute, or rags. Coverage includes aircraft and automobile floor coverings, except rubber or plastics; bathmats and sets; dyeing and finishing of rugs and carpets; and Wilton carpets.

NAICS Code(s)

314110 (Carpet and Rug Mills)

Industry Snapshot

In 2003, 80 percent of the world's carpet was manufactured within 50 miles of Dalton, Georgia. Carpet mills specialize in producing carpet backing, as well as carpets and rugs. In 2001 the value of shipments totaled $12.1 billion, up slightly from $12 billion in 2000. The industry posted gains each year since 1991 and has been dominated by sales of tufted rugs and carpets, which accounted for 92 percent of the industry's revenues. Woven carpet and rugs totaled just 4 percent. All other varieties (primarily needle punch) totaled 6 percent.

During the early 2000s the industry's growth slowed due to weak economic conditions. Confidence in the future of the economy ran low, causing consumers to put off nonessential purchases, including new rugs and carpets. However, low interest rates created a robust new housing market, which sustained demand in the otherwise sluggish economic environment.

Organization and Structure

In the mid-1990s, 238 of America's 383 manufacturing plants were located in the state of Georgia. Carpet mills specialize in producing carpet backing, as well as carpets and rugs. Intense competition in the 1980s led forward-looking companies to acquire both manufacturing and retailing operations in an effort to cut costs.

Tradition, profits, and consumer preferences, more than a specific management approach, have historically dictated the organization of the carpet industry. The product flows to residential and contract clients primarily via the following two methods: directly from mill to client or from mill to dealer or wholesale distributor, then to a retailer who sells to a client. If manufacturers in the industry continue to follow the lead of Shaw Industries, Inc., the contemporary industry leader, the industry's organizational mode may be revamped. According to analysts, Shaw's acquisition-based growth coincided with the company's novel management approach. First the company hired aggressive, no commission, straight salary sales representatives. Next, in another cost savings move, Shaw signed shorter, more flexible agreements with retailers and in the process eliminated distributors, a long standing entity in carpet promotion. Whether this strategy is adaptable industry wide remains to be seen; however, carpet manufacturers foresee several outcomes. For example, retailers are expected to begin buying most carpet directly from the mills. Secondly, total industry recovery will require the development of strategies to create more unified partnerships between manufacturers, retailers, and cleaners that would allow them to serve and sustain customer confidence.

Background and Development

The first carpet mill opened in Philadelphia in 1791. Until the mid-1800s, carpet manufacturing in the United States was a tedious process using hand operated machines. High quality, artful appeal, and high cost described the carpets of this period. However, during this period and continuing over the next century, several events changed the manufacturing and utility of rugs and carpets. Much of the impetus for industrialization of the carpet industry began when Erastus B. Bigelow, known as the "Father of the Modern...

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