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Rug Makers Rally in Atlanta

Suppliers Upbeat in Tough Times

Cecile Corral, Staff Staff -- Home Textiles Today, January 12, 2009

After closing the door on a year described as the most difficult period in business in decades, many rug suppliers are keeping their chins up as they return to the AmericasMart here and open their showrooms to pitch a slew of new wares during the Atlanta International Area Rug Market.

"This has been certainly the most difficult year this industry has had," said Alex Peykar, principal, Saddle Brook, N.J.-based Nourison. "We can weather this storm. But we are not going to just sit back and wait for better days. We are doing a lot of new products that reflect today's times. We have many new introductions for January."

Suppliers anticipate — or at least hope — retailers will be coming in force to fill voids on rug racks since many stores proceeded with caution on filling orders for new merchandise, preferring instead to maintain low inventories in late 2008 when sales were at their worst.

"I would think there has to be some pent-up demand," said Jim Thompson, vp sales and marketing, West Warwick, R.I.-based Natco Home. "Many retailers haven't bought since October, or didn't stock up for the season, because they were trying to be careful in this economy. So we hope in Atlanta we'll see retailers who have serious holes in their racks and are coming to stock up and buy what they didn't buy in the fall."

To woo these buyers, Natco's new product lineup includes a healthy offering of U.S.-made products, including the casual Peshawar-inspired Acadia collection, which employs a blend of three yarns — space-dyed nylon, heat-set and frisé— to achieve a textured feel and the proper palette "at a very good price," Thompson said. The company is also introducing its recycled plastic bottle fiber Sanibel Hook collection of hand-hooked rugs.

Relaxed lifestyle is also the focus of Oriental Weavers USA (Dalton, Ga.) this market. "We're known for our casual transitional design and fashion, so we've got strength there in the market," said Mike Riley, president.

But as shoppers look to stretch their limited dollars on more lasting looks for their homes, Riley has seen a surge in traditional tastes. To make these styles more palatable to today's shoppers, OW is introducing more traditional styles that are updated with "more trendy colors — we absolutely have to do that."

There will also be many "very casual and comfortable" new designs in both handmade and machine-made constructions from Kas Rugs (Somerset, N.J.), which in total is introducing more than 100 new rugs at market, said Wendy Reiss, key accounts manager. Positioned as a highlight among these is an expanded offering of poly-acrylic blend hand-tufted rugs.

Unlike many of its competitors, Kas experienced growth in 2008 thanks to an expanded customer base in the West Coast region, anchored by the company's new showroom at the Las Vegas World Market.

"We have seen growth in some areas of our business, and part of that stems from the restructuring and building of our sales force," she explained. "We have developed new accounts and strengthened our business with mid-tier accounts, which is a huge plus for us. What we are doing is positioning and strengthening ourselves for when the economy takes a turn for the better."

Safavieh, based in New York, is also looking ahead to a brighter future, and is paving its path the "high" way with three new upscale designer collections. The company attributes its 30% growth rate in 2008 partly to sales of its high-end brand offerings, such as Martha Stewart and Thomas O'Brien.

"We're continuing with the strategy we had last year and expanding and increasing it this year," said Cyrus Yaraghi, vp. "The high-end side of the business is where we see the movement."

Look out, Martha — Safavieh is unveiling three new collection with interior designers Jaime Drake, David Easton and Suzanne Kasler.

"These three new designer collections represent our highest price points," he said. All of the rugs in these groupings are handmade and span traditional to contemporary looks.

Capel Rugs, which also aggressively pursued wealthy consumers with high-end rug styles last year until the category "leveled out" in the late fall, is taking a new approach to this sales tactic.

The Troy, N.C.-based family-owned and operated company is launching a faux-Chobi collection that can sell for as much as one-fifth of one of its authentic Chobi rugs.

"We have really taken a dramatic step to go into high-quality products that sell at value price points," said Allen Robertson, vp sales. "We're doing it because people are squeezed and looking for the best price they can get. They want an expensive look for an inexpensive price."

Titled Classic Chobi, these rugs are machine-made in China. (Real Chobi rugs are hand-knotted in Pakistan and Afghanistan.) "We think we've got best Chobi duplication," he said.

Classic Chobi rugs are set to retail for $800 for a 9-by-12. By comparison, an authentic Chobi rug by Capel retails for $2,000 to $4,000 for the same size.

Price is not an issue this market for Fort Lee, N.J.-based Couristan, which is offering new products with suggested retails that are "across the board," said Larry Mahurter, director of advertising and marketing. New offerings include wool and synthetic shag styles, two new outdoor collections, and hand-knotted wool varieties.

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