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Rug market peace at hand

Cecile Corral, Powell Slaughter -- Home Textiles Today, August 18, 2003

Area rugs have been locked in an unrelenting market share war against broadloom for the floors of the nation's homes over the past decade as hard surface flooring steadily displaced carpeting, simultaneously spurring demand for rugs.

Peace in the market segment may be at hand.

An increasing number of suppliers have begun coordinating area rugs with carpeting to create new programs and additional selling opportunities.

Some longtime players that participate in both categories, like Mohawk Home, Couristan and Shaw Rugs, are increasingly layering the two product categories.

Elsewhere, area rug suppliers have recently added broadloom to their offerings, as in the cases of Nourison, Burlington Rug Corp. and Hellenic Rug Imports. Some are forging partnerships with carpet suppliers to create cohesive collections, like Orian. Others are seriously considering entering the carpeting category themselves, including Sphinx and Feizy.

And then there are the broadloom suppliers that are taking a crack at the area rug category, among them DuPont and Stanton Carpets.

"We see the trend moving, and we're taking advantage of it," Jeff Lorberbaum, president and ceo of Mohawk Industries, told HTT. "We are coordinating our products in stores, leveraging our retail customers to provide them all of our product categories, and we recently started an advertising campaign in magazines where we show carpeting, hard flooring and our other products to promote all of our brands."

Like most trends, this one was sparked by a larger movement in the marketplace — the growing popularity of hard surface flooring at the expense of carpeting, historically the top-selling flooring product. In 2001, carpets and rugs accounted for 64.6 percent, or $13.05 billion, of the $20.2 billion floor covering industry, including hard and soft flooring products, according to Catalina Research Inc, St. Petersburg, FL. That marked a 6 percent decline from 1992, when carpets and rugs accounted for 70.6 percent of the total industry sales.

Although Catalina doesn't separate carpet and rug sales, Shaw Industries divisional vp Jeff Meadows estimates that broadloom has declined from 85 percent of the overall flooring business to roughly 55 percent.

One of the earliest players to catch the trend, Dalton, GA-based Shaw Rugs two years ago launched its licensed Kathy Ireland collection with both carpet and area rug offerings.

"We do it where it makes sense, which is especially the case for flooring dealers," Meadows told HTT. "It works well for us because it has a lot of consumer sell-through. It makes it easy for the sales person to move the products."

Nourison also saw the trend two years ago and jumped on it by adding broadloom for the first time to its roster. It started out with a program stemming from its Grand Parterre collection of area rugs. Now the Saddle Brook, NJ-based company has expanded that program to include coordinated programs with existing rug collections — Ashton Home, Hamilton, Surrey Garden, Cosmopolitan and Lumiere.

"It's a marketing reach," said Ed Vairo, director of creative marketing. "We're maximizing our opportunities for extra ticket sales as more and more retailers go multi-category [in floor coverings]. We've tried to layer our programs with area rugs and carpet so that if the customer buys an area rug for $800 to $2,000, then she might also see the roll runner that goes with it and buy it for $1,500 and then for another $3,000 or so she can have the broadloom program as well a complete ensemble."

Larry Mahurter, director of advertising and sales promotion for Fort Lee, NJ-based Couristan, noted that customers have begun treating rugs and runners as accessories to their homes and wall-to-wall carpeting as a fashion statement rather than a utility product.

Responding to that trend, the company is in the midst of revamping its advertising efforts to promote its broadloom with its various coordinating rug programs — not only in traditional rectangular sizes but also with roll runners and shaped rugs — particularly rounds and octagons.

Karastan, a division of Mohawk Home, introduced at the July Atlanta rug market its new Resort line of casual area rugs produced from the company's nylon broadloom offerings. The new line represents a more affordable price bracket for Karastan, $400 for a 6' x 9'.

"We're seeing customers that have select rooms where they do want the broadloom, giving us an opportunity for an add-on sale," said Bill Storey, senior vp, general manager.

Approaching the trend from a different angle is Anderson, SC-based Orian, with its broadloom partner since last year, Creston Carpets. Both use the same fibers to create their respective products but do not match up their goods for full coordination. They only market and brand them together, which suffices for this partnership, said David Starr, national sales manager, Orian.

The United States is the only market where Dalton, GA-based Sphinx does not currently offer broadloom, though the company may go forward with it. Sphinx distributes its broadloom offerings throughout Europe and Asia.

"We have Axminster capacity in place," said Mike Riley, executive vp. "And we know department stores all do broadloom and rug combination packages. It's something we are considering."

Feizy is, too, said Ray Ehsani, vp, sales, based on the success of the few custom-made broadloom carpets the Dallas-based company has made for select customers.

"We've started doing some broadloom for a few customers who have asked us for it, and we're considering maybe getting permanently into the category," Ehsani said. "But only as a coordinate to our best-selling rug programs. That's how it will work best."

Feizy's Larousse collection of 100 percent wool rugs from Romania is currently the only collection Feizy makes matching broadloom.

Longtime carpet supplier DuPont, Kennesaw, GA, is licensing its StainMaster brand to area rug partners to enter the rug category and create new coordinated programs for its carpet dealers, said Carol Haslach, marketing communications manager for Dupont rug fibers group.

"Rugs give us another product to expand StainMaster into and capitalize on the success we've had in it in broadloom," Haslach said. "Hard flooring is gaining popularity, so this gives us a new opportunity to take advantage of that floor space, too."

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