As new rug styles come onstream, it's imperative to get rid of slow movers and dead heads. In the current business climate, cleaning out inventory has been a challenge. In fact, many vendors say it's currently the industry's No. 1 concern.

"There is a lot of inventory out there," observes A. Leon Capel, president of Capel. "We've got to help our retailers get rid of it so everyone can be ready when business starts moving again. When consumers go back to the stores, they don't want to see the same old stuff. They will want fresh new looks."

Retailers and vendors are working together to develop new ideas for inventory reduction, according to Mike Riley, vice president of marketing for the Sphinx division of Oriental Weavers.

"Many customers have asked us for help in developing creative ideas to get rid of overstock," Riley says. "We are encouraging them to develop hard-hitting promotions, to take deep markdowns and to be aggressive in getting rid of old merchandise."

Norm Sweeters, president of Mastercraft Imports, recalls that excess inventory was never a problem 30 years ago, when there was only a handful of rug vendors in the marketplace.

"Now there is such product proliferation that overstock is a growing issue," Sweeters explains. "We are urging dealers to structure a creative, focused approach to the problem - even if it means using such tactics as 'buy one, get one free' or having a tent sale in the parking lot."

Vendors are also developing new ideas to help keep SKUs and inventory at manageable levels. "Retailers need all the help that we can give them in terms of quick-ship programs," says Rao Yarlagadda, president of KAS Oriental Rugs. "We carry much of the responsibility for inventory. We're trying to help retailers concentrate on selling, not stocking."

Milliken is also developing new merchandising ideas that save retailers valuable space on rug racks, according to Dane Owen, the company's director of marketing and sales.

"Rug arms are valuable pieces of real estate, so we've developed a way to maximize every arm," says Owen. "For our top-selling styles, large 6-by-9-foot samples are also available with a 'blanket' showing the different colors. That means the design takes just one arm rather than four or five.

"Because of our fast manufacturing turnaround, the retailer can usually have a special order in a week," Owen adds. "That keeps down inventory costs, as well."