Rug market leaves industry optimistic
By Lissa Wyman -- Furniture Today, February 5, 2007
Atlanta — Last week's Atlanta International Rug Market was described as one of the most successful events in years, giving the rug industry a dose of optimism after a particularly challenging 2006.
Big vendors and AmericasMart, the market's venue, created a party atmosphere with a series of promotional events.
Safavieh introduced its Martha Stewart rug collections, with Martha Stewart herself on hand to make a presentation at a posh invitation-only reception. In another big introductory event, Nourison unveiled its Liz Claiborne rug collections.
"The introduction of the Martha Stewart line generated a lot of positive energy for the entire industry. We had more premarket appointments than ever before. If everyone who set up an appointment bought just one rug, we'd make our year," said Cyrus Yaraghi, a principal of Safavieh. "Everyone wanted to see Martha Stewart in person. You think they wanted to see me?" he laughed.
"The Oriental rug business really needs a shot of excitement, and we are prepared for a major expansion in sales. We've increased our sales force, our inventory and warehousing. We are also expanding our furniture lines," Yaraghi added.
The Atlanta Rug Center floors had a different look. Shaw Living unveiled a 13,000-square-foot showroom as an anchor tenant on the Mart's busy sixth floor.
"Atlanta was one of the great markets of all time," said Kimberly Barta, brand manager for Shaw Living. "Every vendor went all out to generate a lot of excitement."
Discussing the outlook for 2007, Alex Peykar, a principal of Nourison, said he doesn't listen to forecasts of doom and gloom. "Our philosophy is that the people who sit back are the ones that get behind. If you are positive and do your best, you'll do well, no matter what happens to the economy."
John Feizy, president of Feizy, said hard work creates its own rewards.
"There continues to be downward pressure on prices worldwide, and consolidation at the retail level," he said. "As a result, we have to work twice as hard to produce increased profits. Fortunately we have developed a great marketing staff and sales force to be able to accomplish our goals in a changing market."
Joe Barkley, executive vice president of Kaleen Rug, said the company would be able to generate higher sales in 2007, no matter what happens in the general economy. "Rug vendors who work hard are going to do well," he said.
After a challenging 2006, vendors are entering 2007 with momentum from a surprisingly strong fourth quarter. Rug sellers feel that the Atlanta market sets the tone for the year.
"In 2007, the industry will continue to fight hard in terms of pricing. There continues to be downward pressure on prices and the consumer is fighting for every dollar," said Bruce Hric, president of Capel, Inc. He added that the company "had some exciting new products and Atlanta produced some solid results for us."
"Retailers and consumers are hungry for new products that are unique in the market. Our business continues to grow because we fill that need," said Amir Loloi, president of Loloi Rugs.
Directions in the home furnishings business have a profound effect on rugs, according to David Moyer, product manager for Mohawk Select, a division of Mohawk Inds. that specializes in mid-range price points.
"We see major growth in the furniture retail segment, and for Mohawk Select that means moderate price points," said Moyer. "If a furniture group is selling at $1,499 to $1,999 for a seven-piece set, the rug needs to be $199 to $249, with $199 as the biggest mover."
Hari Tummala, executive vice president of Kas Oriental Rugs, said the company has expects 2007 will be "a lot better (than 2006) as consumer confidence returns." He said that in Atlanta, the company introduced a broad range of products.
"We introduced 10 new collections and 425 new designs in Atlanta. This is by far our biggest and best assortment of introductions in the company's 25-year history," he said.
"We had our best appointment line-up ever, so Atlanta was a very robust market," said Satya Tiwari, president of Surya Rugs. In 2007, Surya expects to add decorative pillows and throws to its product mix and expand into new channels of distribution.
