Vendors go to extremes with new rug designs
July 27, 2001,
Atlanta — These days area rugs is a business for the have-lots or have-nots.
As seen at the Atlanta International Area Rug show earlier this month, area rug manufacturers are positioning their offerings for the two extremes of retail, luxury and mass. The middle ground, vendors say, has lost its footing.
Riding that same wave is Karastan, which is reverting to the sales tactic of reduced price points it used three years ago to promote a new introduction, Palazzo, a 100 percent New Zealand wool line that includes three designs in seven sizes. A 5' x 8' Palazzo rug is priced at $499 — 20 percent less than Karastan's average price tag.
"Our customers want the Karastan brand, but because of the weak state of the economy they also want more value," explained Phil Haney, senior vp, marketing and sales. "The whole market is screaming for value and products that are more cost-sensitive. But Palazzo still offers the same level of quality you'd expect from us."
Palazzo is targeted for Karastan's usual customer base of department and specialty stores, Haney added.
Oriental Weavers introduced three new collections as part of its value effort — Nubia, made of 10-color, two-yarn construction; Rosetta, 12-color and 13-millimeter-pile-high rugs; and Carved Accents, a single-ply product. The latter is priced at $149 for a 6' x 9'; Nubia and Rosetta are both priced at $249 for 6' x 9' sizes.
"Most people use the $299 price point. We are being intensely competitive by reducing to $249," said Paul D'Huyvetter, senior vp. "Retail is a little soft, and there are a few bankruptcies. So we are trying to do our part by creating new product and new yarns so our retail partners have the inventory at competitive prices."
The launch of Shaw Rugs' new Tommy Bahama line of licensed rugs drew 50 percent more retail traffic than the company typically sees during shows in Atlanta, said Jeff Meadows, division vp. Shaw introduced 15 new Kathy Ireland rugs to the licensor's collection of mid-priced rugs.
Trans-Ocean covered all its bases with its new introduction of tufted rugs that span three levels of price points. The Indian tufted wool rugs are priced at $399; Chinese tufted wools cost $299; and Chinese tufted synthetics are set at $199.
"It's always been an important part of our program to offer several price points, and the value of tufted rugs is still the best out there," said Charles Peck, president.
Feizy stepped up its offerings this summer to"a little more luxury" with higher fashion and fine wools, among other new introductions.
"We are focusing in general this market on high fashion and comfortable setting pieces because in a recession the people with money go out and buy more than usual because they think they are getting a bargain," noted Ray Ehsani, vp, sales. "They think retailers are reducing prices because of the weak economy, even though in many cases they aren't."
Hellenic Rug Imports' "coolest" introduction, boasted Steve Mazarakis, president, was its new 100 percent leather shag rugs that are set to retail at $399 for a 5' x 8'. "It's geared for the more upscale specialty stores," Mazarakis said.
828 International has boosted its average ticket price for new introductions to the $600 to $800 range from $399 to $499. Ivan Phillips, vp, sales, said 828's goal is to become a "one-stop shop" by offering more selection. The higher price points, Phillips said, complement its recent success.
"We're having a record year. As we like to say at our meetings, 828 has chosen not to participate in the recession," he said. "Business is down in the retail environment. We aren't a Nourison yet, but we are getting a disproportionate share of the market."
At Orian Rugs, "high-priced product is what's selling," said David Starr, national sales manager. That movement prompted the introduction of the new Interlude Collection — a jacquard woven rug made on a 400-reed machine to provide deeper density and a clearer design. Orian also introduced new colors — expresso, Merlot and olive, among others — to its existing Enchantment Collection of two-ply heat set rugs made with specially treated yarns.
One of Capel's biggest intros was plaid viscose rugs made in India and new domestically made Sailor Boy collection of cotton blend braided rugs.
The plaid viscose line sets Capel at a higher price point in the category, to $249 from $199, and Sailor Boy, likewise, boosts Capel's average ticket for similar product, to $229 from $199. The main reason Capel is raising price points, said Kea Capel, marketing and creative services, is the high quality of the rugs designed to serve retailers starved for better product.
"We believe the retail channels succeeding in these categories are further extending their levels of quality," Capel said. "At higher levels of retail the merchants have realized the area rug category requires more quality at higher price points."
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