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Slow rug market no surprise

By Lissa Wyman -- Furniture Today, July 20, 2008

ATLANTA — There were few surprises at the summer International Rug Market this year. It was sloooooooow.

But vendors were philosophical about the semiannual event, held at AmericasMart here July 13-16, overlapping the Atlanta Gift & Home Furnishings show that opened July 10.

“Business at retail is very soft, and it's a problem for everyone in the home furnishings business,” said Mike Riley, president of Oriental Weavers USA. “Our job is to keep on developing innovative products. It will help us down the road when consumers come back to the stores.”

The more immediate challenge for all vendors is to get the new products in front of their retail customers. With rising costs of planes, trains and automobiles, this summer's rug market was attended primarily by larger stores. Many smaller independent retailers decided to pass.

Chas Sydney, senior vice president of area rugs and new business for AmericasMart, said the mart had instituted incentive plans to make market attendance more attractive for rug retailers.

“A lot of the big buyers were here. The people who are serious about this business know they have to be prepared with new products when the economy turns around,” he said.

The showrooms in Atlanta were filled with innovative ideas. Oriental Weavers, for example, is diversifying into patterned broadloom carpeting and has also launched a rug underlay division.

Alex Peykar, a principal of Nourison, said market conditions were responsible for the lower attendance. “Traffic was about what we expected, and certainly lighter than the heydays. But the retailers who are serious about business were here and they want new products,” he said.

Surya, meanwhile, coordinates rugs with new categories such as pillows, throws and wall art, so the overlap with the gift and home furnishings show worked well for the company.

“We were open throughout both markets, so Atlanta was good for us. The gift and home furnishings stores really understand what we are trying to accomplish with coordinated product lines,” said Satya Tiwari, president of Surya. Tiwari said traditional rug retailers, however, are somewhat reluctant to broaden their product mix.

“We have some innovative rug merchants who are doing very well because they have expanded into new items,” said Tiwari. “They will eventually change the face of rug retailing. I hope that other traditional rug stores will also see the advantages of this type of merchandising.”

Austin Craley, vice president of sales for Momeni, said the company had expected market traffic to be light.

“I think it's fair to say that the economy has scared some people and kept them away from the market, but in some ways that's good for the people who did attend,” he said. Craley said the Atlanta market was about “quality not quantity,” with vendors able to sit down with customers to work out merchandising and marketing programs.

A positive attitude always helps, especially in hard times, noted Hari Tummala, executive vice president of Kas. “We're going into market with over 125 new rugs. If we don't have new things, it will only make matters worse. It's not a service to our retailers,” said Tummala.

When the economy is soft, the pre-market prep work is more important than ever, said Joe Barkley, executive vice president of Kaleen. And even in hard times, it's important to remember that retailers need fresh products, he stressed.

“Retailers are professional merchants. There are still sales taking place, and they need new merchandise,” said Barkley.

While there are fewer walk-ins at all markets, Bark-ley noted that drop-in business still exists if you've got a strong draw. “Since we introduced the Paula Deen line in January, we've actually had a lot of curiosity seekers, and we've been able to turn quite a few of them into customers.”

“There is still business out there, but you've got to fight to get it,” said Mark Ferullo, vice president of U.S. operations for Rizzy Rug & Home. Ferullo said the company has had great response to its aggressive Trash to Cash promotion in which retailers can swap out existing store stock for new Rizzy rugs.

“As the new vendor in the market, we know we face special challenges,” said Ferullo. “In tough times, retailers are not so willing to try new sources, so we have to find new ways to get people into the showroom and get our rugs onto their racks.”

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