Opportunity always there, but market has changed
Lissa Wyman, Rug Editor -- Furniture Today, March 25, 2007
Every time market rolls around, I hear about how furniture stores are becoming more interested in rugs. A decade ago, that would have meant opportunity for the high-end hand-knot business, but not anymore.
Now, the big furniture stores want to sell rugs at mainstream prices. That makes sense. A chain that offers $599 sofas isn't going to promote $2,000 rugs.
In the past five years, the "sweet spot" for rug pricing has been cut in half. The best-selling retail price points for 5 by 8 hand-tufted rugs are now $399 to $499. For machine-made rugs, it's $199 to $299 retail. Hand-tufted constructions now dominate the hand-made sector. For trade-up, there are Tibetan knot constructions, where prices also are dropping, now about $599 to $699 retail.
Where are traditional hand-knotted rugs? We don't see many of them in the mainstream. Hand knots are now reserved for the designer trade.
I believe the furniture channel offers a lot of opportunity for rug vendors but, like everything else, it's changing.
Some rug vendors are working with major furniture brands to create private-label rug programs. Over the past year, Klaussner has developed a rug line with over 125 patterns, each coordinated with its furniture. Retail prices? $189 to $499. Ashley had several rug racks in its Las Vegas showroom, each geared to a specific furniture line.
Several rug vendors have opened in recent years to work on direct imports for furniture chains. Many don't even show at traditional markets. There's also a trend to import directly from rug makers in India, China and Turkey.
In the "good ol' days," rug vendors opened their High Point spaces and furniture store buyers cherry-picked from different lines. They used the rugs as props in room settings, had a rack at the back of the store, or had a full-blown rug department. But those old ways are becoming less important.
If the furniture channel is to be truly important to the rug industry, vendors must invent new ways to get into the Top 100 chains. We're already seeing it happen with Klaussner and Ashley. I predict we will see more rug and furniture partnerships.
I like the saying, "Once a pickle, never a cucumber again." You just can't turn back the clock and hope that hand-knotted rugs will return as the dominant construction. The reality is that furniture stores, by and large, consider rugs a bread-and-butter accessory, not a luxury item.
Where does that leave the high-end hand-knot business? Surprisingly, many specialists are doing quite well. They stopped chasing high volume and developed their niche, wooing interior designers and the hospitality business, particularly posh hotels and luxe restaurants.
So, how will rugs fare at this market? That's easy. Smart, innovative producers will always be successful. Those that whine about the good ol' days will never be successful.
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Big boxes pull rug from under tradition
Jan 8, 2006 -
Rugs regain momentum
Jan 9, 2005 -
Hand-knotted rugs making a comeback
May 11, 2006
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