Kas Rugs celebrates 25 years
By Lissa Wyman -- Furniture Today, January 15, 2006
Atlanta — "When you don't keep up with change, you're in trouble. If you resist it, you can't grow." That's the message from Rao Yarlagadda, president of Kas Rugs.
Yarlagadda and his wife Kas founded the rug resource 25 years ago. Its continued growth amply demonstrates how company principals have embraced rapid changes in the rug industry during the quarter century.
Kas, now based in Somerset, N.J., is kicking off its 25th anniversary year this week at the Atlanta International Rug Market. Its silver jubilee is being marked with an unusually large number of introductions as well as a gala dinner party in downtown Atlanta.
Yarlagadda gave up his career as a registered pharmacist to enter the rug business.
The couple got the rug bug while operating K&S Rugs, a New York retail business, from 1977 to 1981. Kas officially got off the ground as a rug wholesaler in 1981 when Rao and Kas Yarlagadda began selling rugs from a 1,000-square-foot space on Broadway and 29th Street in New York.
Hari Tummala, Yarlagadda's nephew, joined the company that first year, and the three handled everything from sourcing to product design, warehousing, accounting and sales. Tummala continues today as executive vice president and is a major contributor to Kas' success, according to Yarlagadda.
In 1987, Kas moved from Manhattan to the ORICA Oriental Rug center in Secaucus, N.J. In 1996, the company moved to its present 100,000-square-foot office and distribution center in Somerset. Kas also maintains offices in China and India.
Although Kas has grown into one of the rug industry's most solid sources, it remains a family business. In the past five years, Kas Yarlagadda retired from day-to-day involvement. However, Kas and Rao's daughters, Kranthi and Santhi, are now active in management.
The character of the Kas line has changed dramatically in 25 years, reflecting changes in retail distribution and consumer demands for fashion and value.
Today, Kas carries over 45 collections of hand-tufted, hand-knotted and machine-made rugs from India, China, Belgium and elsewhere. Prices for a 6 by 9 size range from $99 value-driven rugs to hand knots at $999.
"We are always looking for the next new thing, looking at ways to bring better quality and value to our customers and the consumer," Yarlagadda said. "Once, traditional high-end, hand-knotted rugs were the major part of our business. Today, we have only one hand-knotted line. Hand-tufted rugs are now a big portion of our business, a construction we added in 1994."
Kas is now deeply involved with machine-made rugs, reflecting the trend for suppliers to cover all or most of the major product and price segments.
The company introduced machine-made rugs from Belgium and Turkey in 2001. Last year, Kas expanded to Chinese machine-made production.
Machine-made rugs are growing in importance for Kas, said Yarlagadda. "In the machine-made construction, we have collections made of polypropylene, New Zealand wool and wool/silk blends. Now we are introducing space-dyed wool and space-dyed nylon collections," he said. "Machine-made rugs represent a great growth opportunity for us, particularly in the $399 to $599 price range.
"Today, value drives much of the rug business, particularly in the large multi-store channels," he continued. "Often, product development works backwards from a price point. But we still believe in building products on the foundation of quality, no matter what the price."
The key to success is quick response to market demands. "If you don't move with the marketplace, you'll be going backwards," he said. "You've got to be aggressive and embrace change."
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