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Suppliers Optimistic Heading into Market

The July International Area Rug Market is typically slower than its January predecessor each year. But because the economy was at such a low point six months ago and so many retailers reluctant to write orders — or in some cases, even make an appearance — this month's event might prove stronger by comparison.

Suppliers surveyed by HTT agreed their appointment books are thin but possibly stronger than they were in January, giving them hope for new business in the second half of 2009.

"There is more energy now than in January because I see most of the buyers looking to buy," said Cyrus Yaraghi, vp, Port Washington, N.Y.-based Safavieh. "In January we saw some cancellations. But our appointments are picking up more this time around. The mood in this country has changed since January, and the stock market is going up."

Alex Peykar, principal of Saddle Brook, N.J.-based Nourison, is cautiously optimistic because he hears many retailers are, too.

"And those are the dealers who usually go to market, so we are expecting to see enough of them in Atlanta to make it not as slow a show as everyone might have expected," he said. "I will say, we do not expect this market to be very busy, but busy enough to make it worth our while."

Also comforting is that the larger chains will for the most part have a presence at the rug market, based on suppliers' estimations. Independent retailers, however, are apparently staying away this time around, suppliers warned.

"The people coming are looking forward to a better season in the fall and winter before the holidays," said Sheila Rahmanan, product manager for Obeetee Inc. The Indian company operates offices in New York City as well as a new facility in Secaucus, N.J.

"We don't expect huge orders, but we expect some orders from our clients who need to replace their Obeetee inventory that has moved out of their stores," she said.

Such clients consist of retailers who "didn't purchase anything or much in January. Summer markets have traditionally seen a lot of traffic. But because January traffic was really down and people didn't buy a whole lot, we are hoping they are coming back to place some orders, even if not for immediate delivery, even if for later in year."

To lure retailers to market, suppliers are using a variety of tactics.

Calhoun, Ga.-based Surya Inc. has for the first time created several set packages of coordinating rugs, decorative pillows, throws and wall art and kept them at sharp price points — under $399, under $699 and under $999.

"We are also throwing in the [point-of-purchase] materials and all the stuff they need to make a vignette of the products in their stores," said Seth King, vp, sales and marketing. "We have created special marketing displays, as well, to give them the whole package."

Couristan, based in Fort Lee, N.J., is more secretive — for competitive purposes — about its newest "special incentives" to lure customers to market, said director of advertising/sales promotion Larry Mahurter,.

"And it's working," he said. "We've had above moderate inquiries, and we're getting positive feedback from our customers. We think the traffic will be on heavier side, unlike a typical July market. We've come to market with some out-of-the-box incentive programs that we feel will increase traffic in our showroom, and seeing that this effort is working."

While Couristan does expect movement in its showroom, the company is bracing itself for modest orders — as are many others.

"I don't think you'll have any store purchase high inventory — those days are done," Mahurter said. "But to freshen their appearance in their stores, you'll see some business."

"Value" is the other avenue suppliers are taking to grab retailers' attention.

For Anderson, S.C.-based Orian Rugs, that means special shags and heat-set polyester USA-made rugs that can retail at opening price points, starting at $98.

"I know it's been said a million times, but I'll say it again — the consumer just wants value. She wants to feel that the money she is spending is well worth it," said Paul Sullivan, svp, sales and marketing.

Domestically made area rugs are also at the forefront of Central Oriental/Natco Home's newest assortments for market.

"Value — that is what we are working on offering," said Jim Thompson, vp, sales and marketing. "We have new product from our factories. We have 8-by-10's that can retail for $299, and these rugs are not the kind you'd be ashamed of. These are good quality, value rugs. We also have polyester shag priced to retail for $149 for a 5-by-8. It has the right touch and colors."

United Weavers of America, based in Dalton, Ga., is coming up with new product categories, like juvenile rugs, "because we're gaining interest from new customers, simply because there is not an overabundance of product right now," said Diane Carleo, director of marketing.

As many of the major rug mills have shrunken production because of declining demand, Carleo said her company has stepped up to offer new products to meet renewed requests from retailers — many of them new customers for the company.

"It seems a lot of rug companies haven't been producing as much, and there seems to be less product available out there," Carleo said. "This is giving us more opportunities."

She said her appointment book for the Atlanta mostly filled with major retailers and fewer independent stores.

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