Rug vendors get innovative to combat tough economy
High Point Market Guide: Product strategies
Lissa Wyman -- Furniture Today, April 7, 2008
HIGH POINT — Rug vendors are coming to High Point with a healthy attitude despite the sick economy.
Looking at the current state of the home furnishings business, they are not expecting this market to be a record-breaker. However, many vendors have developed a new wave of innovative products and merchandising services to help them gain market share in the furniture store channel.
“I’m actually excited about this market,” said Arash Yaraghi, a principal of Safavieh. “We’ve developed some very interesting new products and we also have new ideas about how furniture stores can show rugs effectively with the least amount of investment.”
Yaraghi is realistic about the current business climate. “There is no denying that business is tough right now. But in tough times, we need more innovation.”
Safavieh is one of the vendor-sponsors of Martha Stewart’s personal appearance at High Point Market this season, and that event should build positive market momentum and get the Safavieh name out to a broader audience, according to Yaraghi.
In addition, Safavieh is offering a new line of machine-made rugs that duplicate the look of hand-knotted rugs.
“We have made a major investment in a manufacturing facility in China to develop this product, and we think this collection will be one of our best-ever introductions,” said Yaraghi.
The outlook doesn’t look promising for the economy, “but we don’t want this to be a self-fulfilling prophesy,” said Kami Navid, executive vice president of Jaunty. “In bad times, innovative marketing and merchandising becomes more important.”
Navid noted that furniture stores have shown increased interest in Jaunty’s Showtime marketing system, which allows furniture stores to show multiple small-scale rug samples in a merchandising unit that requires little floor space and inventory investment.
“The fact that we refuse to sell to Internet retailers is also a major plus for us,” said Navid. “This policy means we’ve lost the e-commerce business, but it is ultimately to our benefit to protect our traditional brick-and-mortar customers. Our policy sets us apart from other rug vendors.”
This market, Feizy’s Market Square showroom has been transformed into an Asian fantasy land complete with Chinese lanterns. The showroom extravaganza marks the rollout of a series of new collections under the umbrella name of “Bling Dynasty,” said Leah Feizy, assistant to the president. “Asian design is definitely a trend, and we want to create an exciting market environment.”
Steve Sorrow, Feizy’s vice president of design and product development, said the company’s Bling Dynasty theme covers every construction from hand knotted to machine made. The style themes range from “Heavy Asian to Asian lite.”
Sorrow said he is not expecting crowds at market, but “the people who are coming are the ones that will weather this economic slowdown and ultimately succeed.”
Satya Tiwari, president of Surya Rugs, also stressed that innovators fare best in a down economy.
“This is certainly not the best of times, but we understand our role,” he said. “If we work together with our customers to develop new ways of presenting our products, consumers will buy.”
Surya has developed a coordinated package of rugs, wall art, throws and pillows, with new product categories coming on stream over the next year.
“Our program is geared to the smaller furniture retailers who may not have a visual merchandiser on staff. We fill that function for them,” Tiwari said.
According to Reza Momeni, president of Momeni, the stores that are coming to market are the ones that are doing the best.
“There is no doubt that retailers are suffering now, but the stores that are doing well will be coming to market,” said Momeni. “We encourage everyone to come to all markets to see what’s new.”
Couristan is expecting a busy High Point market, particularly in the outdoor rug category.
“High Point is where much of our outdoor rug business is written, and as leaders in this category, we are making major line extensions with new generations of outdoor rugs,” said Ron Couri, president of Couristan.
Amir Loloi, president of Loloi Rugs, articulated what many rug vendors are feeling in the current economy.
“There are certainly a lot of issues in the marketplace, but we can’t sit back. We have to bring out new products and new ideas that will help to give our customers new ideas and confidence for the future,” he said.
“We are not expecting a tremendous turnout at this market, but we think there is a chance that it will be good. Retailers are getting ready for fall, and we think business will pick up then.”
Joe Barkley, executive vice president of Kaleen, noted that “People who are coming to High Point are pre-qualified. They are there to buy and fill in their assortments.”
Barkley said that the current downturn reminds him of an old marketing principle — that when times are tough, great companies put their expansion plans together.
“On a small scale, that’s what we are doing,” said Barkley. “With the introduction of our Paula Deen line in January, we’ve got a great spokesperson and great products. It gives us an advantage in a very tough market, and we are actually ahead in terms of sales.”
Hari Tummala, executive vice president of Kas Oriental Rugs, said he doesn’t have high expectations for this market, given the current state of the economy. “But we are ready for the market, and we will be showing a lot of new product.”
Will price become more important in a down market? “While we do have value-oriented products, our priority remains color and design rather than price alone,” said Tummala.
“Considering what is happening with the economy, our expectations are not so high, but hopefully we will be pleasantly surprised by the market,” said Lee Harounian, a principal in Harounian Rugs International.
“High Point remains a very important market for us,” noted Michael Shabtai, president of The Rug Market. “We see many serious and committed buyers at High Point, and the major vendors are all present.”
Shabtai said the Rug Market has made its reputation as a high-fashion vendor that concentrates on home accent and furniture stores.
“We closed our Atlanta showroom because we want to focus primarily on the furniture and designer channels,” he said. “Our new Walt Disney Signature line is bringing us to the next level of higher-end rugs, and we feel very good about it.”
Ravi Tiwari, vice president of Chandra Rugs, said his company is building on the collections it previewed in January. “We work closely with our customers to develop products that we know will sell. It’s a real joint effort,” he said.
“We are still a start-up company, and we’ve made great headway in the last two years. It seems odd in a terrible economy, but we are growing.”
One of the most important segments of Chandra’s business is the Internet, he added. “It’s a great business and it has transformed the rug industry. With online retailers, we are able to show our entire collections, so ultimately it’s the end consumer who decides the design direction.”
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