Rug vendors work to maintain momentum
By Lissa Wyman -- Furniture Today, April 25, 2005
High Point — With a successful round of winter markets already in the hopper, rug vendors are confident the momentum will continue through the spring market here.
Fashion (high) and prices (low) are the key ingredients to success in the rug business, most executives agree. Price points continue to drift downwards, even in the traditionally high-end furniture and department store channels, but the demand for design excellence also is relentless.
"I guess I'll never change; I'm always an optimist," said Alex Peykar, president of Nourison. "It looks like there will be a big turnout at market, and we have booked a good number of appointments."
Peykar said new products from January markets are now being delivered to stores.
"Retailers are more fashion-oriented than ever before, and the spring represents the period of fashion change-over at the retail level," he said. "When the January introductions start moving at retail, then we will have a much better idea about how strong business will be for the year."
The demand for value-oriented yet fashionable rugs is exemplified by Nourison's new Calvin Klein Loom select collection, a machine-made group. At a suggested retail of $700 for a 6 by 9 size, it adds a midmarket price tier to Nourison's high-fashion licensing program.
"We think this collection will add a new appeal to that line," said Peykar.
Based on reports from home furnishings retailers, the High Point market should be well attended, said A. Leon Capel Jr., president of Capel. "Retailers are looking for fairly substantial increases this year, so we are also optimistic," he said.
Capel will be introducing a range of U.S.-made Wilton-woven rugs in High Point, a first for the company, whose machine-made products previously have come from overseas. "By contracting products from a U.S. maker, it's a way for us to expand in a new direction.," he said.
The sorry state of the U.S. dollar versus the euro is certainly a factor in shifting production to the United States, but Capel is adding a unique twist.
"In addition to conventional sizes, we are stocking these rugs in mansion sizes from 10 by 14 to 14 by 21," Capel said. "They will be priced from $2,000 to $2,900. Those extra-large sizes are available primarily in one-of-a-kind hand-knotted construction at much higher prices."
Abbyson is a relative newcomer to the High Point scene, but Yavar Rafieha, vice president of sales and marketing, said the benefits already are rolling in for the West Coast importer.
"We've only been here a year, and our international customer base has increased 50%," he said. "I attribute that directly to the number of worldwide visitors who come to High Point. By exhibiting here, we also feel like we are part of the international home furnishings business."
Furniture stores have become Abbyson's principal focus for growth.
"In the beginning, we were oriented more to rug stores," said Rafieha. "But in the last year or two, we have focused on programs for furniture stores. It's a natural. When people furnish their house, they want access to rugs as well as furniture."
Arash Yaraghi, a principal of Safavieh, said, "The reason we come to market is because this is where our natural customers are. We specialize in fashion-forward retail stores who want rugs that also reflect the latest in styling trends. Not only do they come here to look, they also buy at High Point. You can't beat that combination."
Safavieh recently has moved to new headquarters in New York, and also is opening a new showroom in High Point in Market Square. "We're very busy. Business is good and we are keeping the forward momentum going," said Yaraghi.
Joan Catello, vice president of sales and marketing for Kas, agreed the mood of the market is likely to be much more optimistic this season.
"Retailers are very hopeful," she said. "Everyone has a lighter spirit and they're not afraid to look at more adventurous fashion items, rather than considering price alone."
Colors are beginning to emerge from the subdued brown and beige palettes that have dominated the rug business in the past few years. "Colors are becoming brighter and clearer, and that always indicates an improving economy," said Catello.
Steve Codella, Couristan's vice president of sales for the Eastern division, said the company has booked appointments with major department and furniture stores.
"Retailers report there is a lot more traffic and sales activity at the store level than in recent years, so we're also more optimistic than ever," he said. "We're also expecting to see more of the large regional furniture dealers. These stores are a growing factor in the business."
Couristan, like many other rug vendors, will continue to strengthen its position in the contemporary design category. "Even with our traditional patterns, we are updating the color palettes to reflect what is selling in furniture," Codella said.
Many vendors said the upward business trend has been building for several months.
"January market was strong and our business has continued to grow since then," said Bob Kirby, president of Jaipur Rug. "I can't really say if it's because of our strengthened product line or because the economy is generally improving. It's probably a combination of those two factors."
Lee Harounian, a principal at Harounian Rugs International, said the rug business is changing quickly as larger stores have begun to dominate the market. "In the past, independent stores dominated our business," he said. "Now the larger accounts are becoming much stronger."
As a result, rug suppliers are developing new products that have broader price appeal. "Hand-tufted rugs are now being offered at $299, and even hand-knotted rugs are coming in at less than $1,000," Harounian said. "Rugs offer consumers better value than ever before."
