After a lackluster spring market season, and spotty retail sales activity over the last nine months, rug vendors are embracing two clear emphases to re-energize the rug business: value and creativity.
When buyers come to AmericasMart Atlanta for the Atlanta International Area Rug Market, July 19-22, they will be seeing quite a bit of both as they search for new ways to capture the consumer’s imagination and entice her to open her pocketbook.
“Consumers are changing,” observed John Graham, president of Sphinx by Oriental Weavers. “They have new expectations when they enter a store. They want assortment, service and value. Most importantly, they want to enjoy the shopping experience.
“Business is really tough out there at the retail level,” he added “As vendors, it is our responsibility to help retailers drive consumers back into the stores with really exciting new looks.”
“The old ways of presenting product don’t work anymore,” pointed out Kea Capel Meacham, director of marketing and creative services for Capel.
The company, known for its traditional braided rugs, has embraced the “lifestyle” category with a series of brighter colors, new constructions and an accessorized in-store merchandising unit for cash-and-carry selling.
“Consumers want something that’s fun,” Meacham explained. “They don’t want to be intimidated when they buy a rug. They couldn’t care less about technical details, but they do understand how different designs and constructions fit in to the way their family lives. We’ve got to help retailers merchandise product in a fresh new way.”
Momeni offered two value-oriented machine-made lines from Iran. The wool collection retails for $399 and the polypropylene group retails at $199 in 6-by-9-foot format. “These rugs generated the most pre-market excitement we’ve ever had,” said Reza Momeni, company president.
Iran may be the cradle of the hand-knotted rug business, but the country also has a large machine-made industry. “Iran has a 500-year tradition of rug making, and they are very anxious to explore the American market,” he explained.
“The designs are traditional Persians, but everyone is curious about the color. We’ve been working closely with our sources to develop the right colors for the U.S. market,” Momeni added. “Our customers say we are right on target, but we will see further refinement in July.
“We’ve got to respond immediately to changes in the market,” said Paul D’huyvetter, senior vice president and general manager of Oriental Weavers—Sphinx Division.”The only way to keep our competitive edge is to get a steady stream of new products out there. That applies to retailers, as well. If you want to survive, you’ve got to go to market and see what’s new.”
Feizy Rug is coming to market with a wide group of new lines, covering the entire price range. “When the economy is uncertain, we’ve got to work even harder on new products,” noted Amir Loloi, Feizy president. “In a downturn, the companies with the best and newest designs and services will get a larger share of the business.”
Ron Couri, president of Couristan, which celebrates its 75th anniversary this year, said things are already looking brighter. “Retailers are definitely more positive about the second half (of the year),” he said. “They are going ahead with promotional programs and they have responded well to our new merchandising systems.
A major trend in construction is the melding of handmade and machine-made sensibilities. In the major middle-market price points of $600 to $1,500 for 6-by-9-foot rugs, the method of production is now less important than styling and coloration. Handmade producers such as Nourison and Feizy now make power-loomed rugs. Machine-made vendors such as Karastan and 828 International Trading have introduced handmade products. Price points for hand-knotted, hand-tufted and power-loomed products regularly intersect.
In recent times, efficiencies of manufacturing and distribution have brought rug prices down into the realm of decorative accessories. With most rugs retailing at less than $1,000 in 6-by-9-foot size, it’s a category that is somewhat immune to many of the vicissitudes of the economy.
“Rugs are not a major purchase, so business is not greatly affected by whether the stock market is up or down. The business is relatively healthy, even in rough times,” observed Jim Clardy, president of 828 International Trading.
Area rug vendors are developing products and merchandising techniques custom-fit for each retail channel. It’s a marketing shift that was clearly evident in this spring’s New York Home Textiles Show and High Point Furniture Market. In Atlanta, merchandise for all the retail channels converge in a single venue.
“Rugs sell in roughly two retail environments,” said Jeanne Dufort, vice president of Merchandising for Trade Am. “The textile setting is oriented to bedroom, kitchen and bath, and the furniture setting is oriented to living rooms and dining rooms. The textile environment is soft and relaxed; the furniture environment is serious.
“For both the consumer and the store buyer, the frame of reference and the buying psychology is completely different — and so is our presentation.”
The bottom line for every kind of merchandise is inventory turn, noted Alex Peykar, a principal of Nourison. “Our efforts are aimed at providing high turnover items to retailers,” he explained. “Fast turnover and re-orderable products help to keep profit margins high. Especially in this period of economic uncertainty, high turn is the name of the game.”
As a result, contemporary styling has become a significant trend. It is manifested most consistently in such “lifestyle” looks as geometrics, basketweaves and easy-going swirl motifs. “It’s a friendly kind of contemporary, not something that consumers are afraid of,” said Ray Ehsani, vice president of sales for Feizy Import.
Designs aimed at the lifestyle customer generally have more nuance and less flash. This trend is exemplified in highly refined wool and silk looks.
Vendors as diverse as Nourison, Feizy, Costikyan, Harounian Rugs International, Karastan, Trans Ocean, Shaw, Oriental Weavers USA and Oriental Weavers Sphinx had recent introductions in this style category. Price points ranged from as low as $199 to well in excess of $1,000 in 6-by-9-foot size. The rugs are sometimes made in true wool and true silk, but manufacturers are also stretching their fiber technology with combinations of wool and viscose, wool and mercerized cotton, wool and linen, polypropylene and nylon, and even polypropylene and polypropylene.
For some vendors, a slowdown in the economy signals a new era of growth.
“We have expanded and solidified our sales staff, and now have coverage in all the major markets,” said Rod Short, a principal of Scotia Designs. Scotia’s specialty is a coordination story of jacquard woven rugs and pillows. Now the company is expanding into other home accents areas such as top-of-the-bed items, lamps and small occasional furniture as well as traditional handmade rugs from India.
“As a niche company, we have to offer something different in a market that is pretty saturated,” Short explained. “We are market- and design-driven rather than manufacturing driven. As such, we’ve got to react very quickly to new trends, and work closely with our retail customers on a partnership basis.”