Last month’s offer (Sept. 6) by Warren Buffet’s Berkshire Hathaway to purchase a major stake (80.1-86%) in Shaw Industries should produce a new push for profitability throughout the industry. With the economy hitting on all cylinders, Buffet’s move seems particularly well timed.
Imagine the return on investment that Berkshire Hathaway will have to realize in order to repay its monumental investment. Many accountants have poured over the financials of Shaw and seen the company’s considerable opportunity for expanded profits. Why else would a takeover company be interested in entering the floor covering industry? Outsiders recognize the low profit margins and see vast potential to capitalize by entering our industry.