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Cecile Corral

Rugs Suppliers Step Up in Tough Market

Well aware of the recent slowdown of furniture sales in the wake of a declining housing market, rug suppliers exhibiting here at the International Home Furnishings market this week say they are tackling the downward trend by arming themselves with marketing tactics and new collections at prices aimed at stirring up business again by this fall and into early next year.

"It is really tough out there, but we're hanging in there by promoting more," said Allen Robertson, vp sales, Troy, N.C.-based Capel Rugs. "Some of the key areas like Los Angeles, Las Vegas, Phoenix, and Florida have been the toughest because the housing market has had negative effects on the home furnishings business."

But on a positive note, Robertson added, retailers seem to be more eager "than ever" lately to work more closely with their rug suppliers to motivate sales.

"I don't think I've ever had so many calls asking us how we can work together to be more creative in marketing product," he said.

One way to achieve might be to ramp up advertising, suggested Diane Carleo, director of sales and marketing for Dalton, Ga.-based United Weavers.

"Retailers need to advertise more because they have to stay in people's faces. In fact, when things slow down, you need to advertise twice as much," she said. "You also need to tell [shoppers] it is OK to entertain at home. Stress that message to them."

Carleo said United Weavers' business with furniture stores has grown in the medium price point bracket — $199 and lower — with machine-made olefin pieces. Shoppers are buying them because the price is right, and because these rugs were made to coordinate directly with specific furniture sets, she said.

"People want the complete look in one package," Carleo continued. "A lot of the younger generation wasn't schooled like the older ones. They need help in decorating. They need the stores to show them what looks good together. That's why all of those decorating TV shows are so popular."

On that same page are two Calhoun, Ga.-based companies — Surya Home and Rizzy Rugs, both of which are taking a similar approach, using new product category additions as direct coordinates to their rugs to stimulate sales.

"We're taking a full-package approach to help small stores maximize their business with us," said Satya Tiwari, president, Surya. "And so far it has helped us bring our business up 60% from last year."

Surya added decorative pillows to its line in January, and then wall art in July. For this market, Surya expands its assortment with more coordinate collections that match to its rugs.

"It is designed to help the customer cross-merchandise, but if customers just want our pillows or wall art, that is not a problem," Tiwari said.

One-year-old Rizzy Rugs quickly recognized the benefits of cross-merchandising its rugs with decorative pillows. The company selected its 100 best selling rugs and paired them to dec pillows for this market, said Mark Ferullo, vp.

Couristan is sticking to area rugs. But it too is banking on the "more moderate price zone" this market, said Kelly Watson, director of sourcing and product development for area rugs.

That bracket starts at $109 for an outdoor structured weave with a five-color palette, through $349 for 100% wool handcrafted items.

"The customer has a more sophisticated taste level," Watson said, adding that Couristan's new collections for this market all feature enhanced construction techniques that don't beg higher costs. "She wants a great price but the product has to be different and it has to hold up."

Los Angeles-based Jaunty Rugs was "strictly a hand-knotted" supplier when it was established in 1979. But today, the focus has shifted to the more affordable hand-loomed and hand-tufted products.

"Now people care about color and design and affordability, and less if the rug is hand-knotted or if it is from China, India or Pakistan," explained Kami Navid, vp sales. "So our approach in our marketing has been on expanding our assortment in the hand-tufted category because it is more affordable and creates more volume."

At High Point, Jaunty will push its 5.5-square-foot "marketing system" retail display that carries 62 samples.

"In tough times when the economy is tight, like now, and people don't have much open-to-buy or much money, they are interested in this kind of marketing," Navid said. "We maximize a small selling space."

In a similar display development, the Blanket Statements rack from Saddle Brook, N.J.-based Nourison allows retailers to show multiple rugs in a small footprint. A grouping of 24 rugs measuring 6-by-9 fit in this compact rack system. Each rug is hung with a runner blanket that shows swatches of that same design in three to five other colorways.

"We expect that retailers who are serious about their business will look past the current economic climate and plan for future growth in 2008," said Alex Peykar, principal of Nourison.

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