|RUG EXECS EXPECT SUMMER TO CONTRIBUTE TO STRONG 2018 CLOSE
ATLANTA -- For many in the rug industry, summer markets are the quiet before the storm -- a period characteristically slower than fall and winter shows. However, that doesn't stop rug vendors from introducing fashion-driven product to help retailers close out the year on a positive note -- and helping their companies end the year on a high note.
"Basically the summer markets are prep for Q4, so we expect that our clients will be looking at styles and textures to order for the end of 2018," Safavieh's Arash Yaraghi told RugNews.com. "We are very excited about our new Eclipse and Winston rug collections, both of which reflect the fine quality that can be achieved in the machine-loomed category. These are high-end collections made with shrink polyester and viscose, and we believe they are comparable to many handmade area rugs.
"We see the trend of price competition in the retailer sector continuing to challenge margins into next year. This makes it vital that we continue to improve on the very high levels we have achieved in the logistics of our inventory, delivery and quality control operations. Doing so is key to our meeting and exceeding consumer expectations and our ability to quickly and efficiently satisfy the growing demand for our products."
At Safavieh high-quality machine-made introductions, such as Eclipse, now rival hand-made looks at a fraction of the price.
The Dalton, Georgia-based Kaleen is banking on a different strategy for its growth. In its traditional area rug business, Kaleen, which produces all its rugs and broadloom in its India factories, has committed to the hand-tufted category, which many area rug makers have abandoned in favor of machine-mades, Blake Dennard told RugNews.com. In fact, Kaleen focused its 2018 introductions on this category and the results have so far been paying off. The company even added more tufted designs to its fledgling Rachael Ray Home program and Dennard said the new Agora collection from Ray will easily become a Kaleen best seller.
"We are having an outstanding 2018 first and second quarters and May, June and July will be record breaking months for us too," Dennard added, noting that the company's expansion of its broadloom program, which includes custom cut and sew rugs, has increased in the triple digits.
"We are seeing mid-teens growth in our traditional area rug business: it is a great growth number for us. And while we are dipping our toe into machine-made, we have a tremendous amount of customers who depend on us for our hand-tufted. We aren't abandoning hand-tufted, hand-knotted and hand-loomed products, and that is helping us continue to grow our numbers."
Kaleen's hand-tufted assortment amps up the company's growth and its new hand-tufted Agora from Rachael Ray Home is on track to become a company best-seller.
For Amer Rugs, fashion-driven machine-made rugs have boosted volumes dramatically, but reduced the amount of revenue per sale in the past six months. "So far 2018 has been the about level of 2017, and 2017 was a strong year for us," said Joe Barkley, Amer Rugs, "The difference between 2018 and 2017 is the product mix that our consumer is purchasing is at lower price points. She is taking more machine-mades and fewer hand-knots, so we are selling many more units than in the past -- but it takes more units to meet the same dollar amount of sales. We are selling a heck of a lot more pieces and generating about the same revenue."
Amer is introducing 13 new collections (five of which are machine-made) for summer offering area rug buyers plenty of incentives to visit the company and Barkley said he is expecting typical summer market traffic. "It is still a little early to tell, but we are moving to a new showroom so we certainly are anticipating a pretty good turnout. But people are optimistic and people are buying so that is a positive."
"We will have a strong year -- our trends are there; our order activity is at an all time high."
Amer Rugs' growing roster of machine-made designs, including the debuting Hamilton, caters to millennial shoppers.
In fact, advances in the machine-made category have allowed many rug vendors to offer trendy looks at a more affordable price, or at least to squeeze in added features for the same. "We are continuing to see a lot of great innovation from Turkey in machine-woven products," said Wendy Reiss, of Kas Rugs. "New textures, great uses of materials, great use of colors and patterns. Texture and softness are still very important and we have some wonderful collections just coming in that both look and feel good.
"Summer markets tend to be slower before we head into our busiest time of the year [in the pre-holiday fall], however, we do see many meaningful customers in both Atlanta and Las Vegas and we hope to see our good start into 2018 and into spring continue into summer," Reiss continued.
Kas Rugs banks its innovative designs made in Turkey, such as the new Montreal collection, machine-woven of shrink polyester and viscose.
At Dynamic Rugs business in July is also expected to be brisk and the company expects 2018 to close out up. "We are expecting the summer market this year to be about the same as 2017, which was a good year for us," Anoosha Rouhanian, Dymanic Rugs, told RugNews.com. "And of course, consistency is a good thing. However, based on initial feedback, one difference for us might be that our customers might be more consolidated in one venue -- since we are no longer showing at Atlanta, we will be seeing most of our customers in Vegas.
"We think the 'casual chic' look is still going strong. Consumers seem to like the look of authenticity that isn't overstated. And as always, they're looking for 'newness' -- new designs, colors, and fashions.
Dynamic Rugs focuses its latest styles on a casual chic aesthetic. Above, the Mosaic collection creates mosaic blocks with the high-low texture of chenille and viscose.
"We anticipate experiencing even more growth in 2018 than last year," Rouhanian continued. "We are continuously reallocating and acquiring resources so that we keep up with fast growth and because we have successfully been keeping up with growth, it just leads us to grow more. It certainly has been a fast-paced ride."
Jaipur Living also expects to close some business during summer markets because of its strong lineup of not only new product introductions but also because of its recent limited edition collaborations and special education programs. "The number of people coming to summer markets has fluctuated over the past couple of years," said Asha Chaudhary of Jaipur Living. "We haves continued to outpace year on year growth and we expect to do that again this year.
"We've seen a significant uptick in our business in the first quarter. New introductions have done really well for us. We've focused on bringing the hallmarks of the Jaipur Living brand -- high design and quality -- into a variety of constructions," Chaudhary continued. "People really appreciate that. We don't churn through designs: we are very careful and specific about what we introduce, and that has resulted in an increase in sales. We are putting together a highly-curated assortment of products for our customers."
Jaipur Living expects a busy summer in part due to its curated selection of introductions, including the indoor-outdoor Polaris, a instant favorite.
Jaipur Living is counting on its new additions to the Polaris indoor-outdoor collection, which is inspired by antique Turkish rugs, to be a hit. "Its patterns and amped up colors combined with a vintage-look zero pile have made this performance rug an instant favorite," she added. Other expected top looks include the sophisticated jute and cotton Naturals Bermuda and the delicate distressed natural looks of Rize.
LR Resources' Mike Thompson is also looking forward to the company having busy July markets based not only on the company's strong new product introductions but also on retailer optimism. "We'll be busy in July as retailers look forward to a very strong fall selling season." He expects the year to end strong after a first half that was comparable to a stellar first half of 2017. He sited both new collections and additions to the company's most popular lines to boost sales. The Naturals collection continues to be popular for its neutral foundational looks, and retailers are also liking the value of LR Resources'
Wilton-loomed Gala collection, which rolls out trending colors such as beige and wheat this summer.
LR Resources continues to roll out new machine-made rugs, which have becoming increasingly important. Shown, the summer debut additions to the Gala collection.
For Rizzy Home the exciting news for summer shoppers will be its growing collaboration with celebrity Donny Osmond. "We are expanding our already successful Donny Osmond Home collection to include more pillows," said Rizzy's Steve Roan. "2018 is well ahead of 2017 and we expect that summer markets will be well attended based on the current positive economic information as well as the increase in people's outlooks for the future."
Rizzy Home is counting on its new Donny Osmond Home program to lure buyers into its showrooms this summer. Shown, his new ENA106 rug.
Curious to find out what changes the purchase of AmericasMart by IMC may bring about, Capel Rugs' Cameron Capel also expects the strong economy to help the remainder of 2018. "The economy seems to be rolling, for the most part, and home furnishings surging along," she noted, adding that the market is bullish on texture. Capel is responding with the Cambria collection's monochromatic colors, hi-lo texture, and "fabulous price," and Dara is another hi-lo piece in undyed wool with a textural popcorn stitch.
Texture is king at Capel's summer showrooms where the new Greyson features a thick pile and Wilton woven drop stitch.