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Suppliers Hopeful About Atlanta Rug Market

Eager to escape the abysmal year 2009 proved to be for most if not all home textiles suppliers, area rug companies are avidly looking forward to Atlanta International Area Rug Market this week.

Over the course of last year, shoppers limited their spending on discretionary purchases, like rugs, giving retailers cause to shy away from building their assortments with new products.

But now, rug manufacturing executives believe retailers will return to the market with "enthusiasm" to fill orders and buy new products to supplement their waning inventories.

"I can already say that we have a great list of appointments, which is super. There seems to be a great, renewed energy and we are thinking this is going to be one of the better markets we have seen in some time," said Wendy Reiss, key account manager, Somerset, NJ-based Kas Rugs.

"The Atlanta Market is the first market to start 2010 and to discuss with our customers their holiday selling season," noted Paul Sullivan, svp, sales and marketing, Anderson, S.C.-based Orian Rugs. "Our expectations are that our costumers will be looking to re-stock their stores with trend-right product that fits the budget. We'll introduce product that not only will be trend right but offer value as well as affordability."

As Sullivan suggested, price will be a focus.

Momeni Inc., based in Carlstadt, N.J., is marking two milestones at market — its 35th anniversary in business and the first time the otherwise upscale rug house branches out into "product that is price sensitive to what is going on in the economy," said Marlys Giordano, director of marketing and product development.

"This is a new avenue for us," she continued. "For larger customers, we've worked in the past on aggressive price points for big orders. But this is first time we'll have an open line of opening price point rugs."

Specifically, this means a set of synthetic rugs that can retail for $199 — a significant step down from Momeni's typical bracket of $299 and higher offerings. But the designs will refect Momeni's sensibility, she said.

"The new products have that Momeni look and color about them — the look and color we have become known for," she said. "We are taking a transitional approach to the design."

On the same page is Port Washington, NY-based Safavieh, a high-end handmade rug house that recently expanded its line to include more moderately priced pieces, such as hand-tufted styles that speak to its younger-set catalog shoppers.

"We are expecting a much improved attendance and enthusiasm at market," said Arash Yaraghi, vp, Safavieh. "And we are showing new qualities, new constructions, at somewhat more moderate price points than before. We have to be creative in providing our customers with a look and a design and a color sense that they expect from us, but in new qualities that can retail more affordably," he explained.

At Capel Rugs' showroom, "visitors will find greater value and incredible selection, with an unprecedented 76 new introductions," said Allen Robertson, vp, sales, for the Troy, N.C.-based company, which is emphasizing soft contemporary and transitional styles in value price points for market.

"Although business conditions remain sluggish, we expect improving sales during the first quarter of 2010, propelled by one of the most ambitious new product introduction programs ever launched by Capel Rugs," he added.

Upscale rug company Obeetee Inc.'s appointment list for market is "positive" so far, noted Sheila Rahmanan, product manager for the New York-based company.

"We have appointments with most of our major accounts," she said. "We already see an upward movement in sales in the market. Buyers are more conservative than usual and opt for high quality and timeless products."

Concerned about the pricing wars and price erosion is Diane Carleo, director of marketing and sales for Dalton, Ga.-based United Weavers.

"Retailers should be careful about hitting a certain retail price point because it could cost them their reputations," she said. "Retailers should not lower their quality standards just to hit the right price point because when the economy bounces back, their customers won't [come back.]"

United Weavers had a better year in sales than it might have expected because it gained new higher-end customers the company had not worked with in the past. Carleo said many specialty-type chains and more upscale stores approached United looking for promotional $99 synthetic styles — rugs that Carleo described as United's "forte."

"I just wish they would also buy some better qualities from us, maybe some $150 rugs," she said. "I'm just worried that if shoppers are used to buying mid-level quality from these retailers, they won't return to these stores later when the economy bounces back because of the trade down."

Shaw Living's Kim Barta, brand manager of the Dalton, Ga.-based manufacturer, expects traffic at the market to be about quality, not quantity, so to speak.

"We are cautiously optimistic about 2010 markets. While we do expect traffic to continue to be down, those who come to market are there to see new products and innovations for new retail opportunities," she said. "Consumers are looking for value-oriented products but style, color, and quality are still requirements for purchase. Today's consumer wants it all."

Central Oriental is emphasizing its "Made in the USA" offerings at market.

"We are really focusing on things we make in our own factory and value price points," explained Jim Thompson, vp, sales and marketing, for the West Warwick, RI-based manufacturer. "We have a very good costing structure in our factory that allows us to offer some value in our rugs. All things being equal, if you can offer something of good value and good design and the right colors, why not offer a USA-made product? It certainly sways business in our favor."

Calhoun, Ga.-based Surya Inc. said its new introductions for market were created in response to retailers' requests for sharper price points.

"Many of them have been asking for a rug that they can retail a 5'×8' for $199 to $299," said Seth King, vp, sales and marketing. "We have strengthened this category, so we have several options in handmade wool and machine made product that cover the major style and color categories."

But price alone cannot be enough to survive in the current economy, he continued.

"[When] retailers come into our showroom, they are not only evaluating product. They are evaluating the company," King explained. "Everybody can promise a better product at a lower price, but if they can't deliver it when the retailer needs it and package it the way they want it, then it does the retailer no good."

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