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November 3, 2008

Slumping sales continue to plague Mohawk

From Staff Reports



Floorcovering sales for Calhoun-based Mohawk Industries continue to fall this year as the company has laid off workers, closed plants and increased prices in hopes of counteracting the slowing global economy.

The problems are expected to continue into next year.

Jeffrey S. Lorberbaum, Mohawk chairman and chief executive officer, said the company will close staple yarn plants in Dillon, S.C., and Fort Oglethorpe as well as several regional distribution centers in the fourth quarter. Also later this year, Mohawk “will reduce inventory with increased (production) shut downs and be impacted by a decline in product mix,” Lorberbaum said.

During the third quarter of this year, net sales were $1.76 billion, down 9 percent from $1.93 billion during the same period in 2007. Net sales for the first nine months of 2008 were $5.34 billion, down 8 percent from the same period in 2007 ($5.77 billion).

Lorberbaum said the Mohawk segment was impacted the most in the third quarter by the economy’s downturn. Sales for the segment, which includes carpet and rugs, declined 11 percent, from $1.07 billion in the third quarter of 2007 to $953 million in the same period this year.

Lorberbaum said the fourth quarter outlook “is challenging due to the slowing economy, tightening credit and falling consumption of consumers and businesses.”

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