RETAIL INSIGHTS: SERGENIAN'S NEXT-GENERATION RUG BUSINESS
Paul Sergenian, Kathryn Sergenian and Niko Papadopoulos share insights into Sergenian's thriving third-generation family owned rug business in Madison, Wisconsin. |
MADISON, Wisconsin -- As the rug retail landscape continues to change at a rapid-fire pace, adapting to evolving consumer shopping preferences is ever-more critical to the future success of family-owned rug specialty stores. Among the industry's most inspiring role models, Sergenian's in Madison is a forward-thinking third-generation legacy floor covering retailer with a rich history and a bright future.
In this exclusive interview, RugNews.com sits down with industry icon Paul Sergenian, his daughter Kathryn, with whom he runs the thriving rug business, and with company controller Niko Papadopoulos, a longtime employee who also works in management and buying roles.
CONTINUING LEGACY
Second and third generation members of Sergenian's founding family, father and daughter team Paul and Kathryn Sergenian.
"My dad wasn't around to see it, but he would be so pleased if he knew what we are doing in rugs," says Paul Sergenian. Now in his 80s, Paul works from his home in Sarasota, Florida, but is in continuous contact with the staff via phone and visits.
"What sets us apart is the relationships we've had with customers over the years," says Kathryn, who had a longtime career in interior design before rejoining the family business in 2006. "People still come in every day asking about Paul, and it's always nice to have a Sergenian on the floor."
Adds Papadopoulos, "It doesn't matter what type of rug a customer wants or how much they want to spend, we treat everybody equally. Mr. Sergenian always says, 'if we have the right product and good customer service, there will never be any issue with our sales.'"
EVOLVING WITH THE CUSTOMER
A vignette designed by Kathryn Sergenian caters to a sophisticated college town demographic with a mix of cowhide rugs and flat weaves with coordinating pillows and pouf ottomans.
While many of the store's current customers are the children and grandchildren of the original clientele, Sergenian's product mix and marketing strategies have evolved along with Madison's demographics.
"Our market is very diverse, in part because of the University of Wisconsin, and we have a lot of young people moving to Madison. Those clients bring their West Coast or East Coast tastes, plus we have the local clients whose parents shopped here," says Papadopoulos. "We want to show every single style in our showroom so we can give options to our clients to make the best decision."
DEPTH AND BREADTH OF PRODUCT
From contemporary to transitional and traditional, Sergenian's has about 800 to 1,000 rugs in stock at all times, and encourages customers to take rugs home to see them in situ.
Sergenian's makes an effort to offer a breadth of price points, constructions, and styles to appeal to any customer who walks through the door. The clientele skews to mid- and upper-level shoppers, but Sergenian's also stocks entry level products.
Where the company does stay edited, however, is on its core group of vendors. Sergenian's works with a small group of eight to 10 main suppliers, with which it has developed close relationships. That enables the retailer to get requests fulfilled quickly with a phone call, or to enjoy special orders for customers, shipped and sold on approval.
The company has between 800 and 1,000 rugs at any given moment, and aims to carry a deep inventory rather than selling from photos in a catalog or on the website. About half of the assortment is hand knotted, while the remaining inventory is equally divided between machine made and hand tufted.
CUSTOMER SERVICE; SHOPPING EXPERIENCE
Sergenian's rug showroom in Madison, Wisconsin, offers a wide selection of price points, weaves and decorating styles curated to address the city's diverse consumers.
Within the rug gallery, which is more than 2,000 square feet, smaller area rugs are displayed on swinging arms and the larger pieces in piles on the floor. Custom-order options are featured on waterfall displays.
Several furnished vignettes throughout the store - typically designed by Kathryn - are so well-regarded by customers that they often want to buy the entire look - furniture and all.
Having rugs in stock is something that's essential to Sergenian's promise of good customer service. "We want customers to be able to take the actual rug home, so they can see it in their own space," says Kathryn. Customers will find no rug photos on the Sergenian's website; instead, in-home consultations are encouraged.
"We understand how different that is from buying a rug from a photo. We check our rugs out; customers can even take home several at once." With her background in design, Kathryn is always ready to make on-site consultations, as is another designer-trained staff member.
CURATING INDUSTRY TRENDS
Kathryn Sergenian, Niko Papadopoulos and Shana LaFore of Sergenian's shop for trends at the Atlanta International Rug Market featuring NORS.
While maintaining a diverse offering, the buying staff does notice and respond to industry trends. One that the buyers have noticed is the increase in celebrity licensed collections with entertainment celebrities as well as personalities from HGTV shows.
But, they say, the well-known names don't guarantee an order. "We would never buy a collection just because it is licensed," says Papadopoulos. "It has to be the right product; it has to meet our market."
Another trend is the use of new fibers, such as bamboo silk, being incorporated into the construction of rugs, and an increase in interest in contemporary and transitional designs.
CATERING TO DESIGNERS
Sergenian's staff members pose with winners of the retailer's rug design competition, which is conducted in partnership with the University of Wisconsin's textile design program.
The store also has a close relationship with the area's interior designers, who appreciate some of the special services Sergenian's offers them, including educational opportunities, delivery of rugs on approval to clients, and specialized buying trips to seek out specific items for clients. "A big part of our sales is through the design community, and we've developed long-lasting relationships with many designers," says Papadopoulos.
The relationship extends to budding designers as well. Through a partnership with the University of Wisconsin's textile design program, Sergenian's holds an ongoing rug design competition. The top three designs are produced in 2x3 rugs and can be ordered in larger sizes. The winning students receive scholarships.
"The students blow us away with their creativity and use of color," says Kathryn. "It's a very good experience for them, because it gives them the opportunity to experience what it's like to showcase their designs on a larger scale."
GROUNDED IN HISTORY
Traditional designs bridge past and present at Sergenian's with a bazaar-inspired display of classic rug styles updated in modern neutral colorways.
Ara Sergenian, a former rug buyer for Gimbel's in Chicago, started the business in 1930 doing rug repair and cleaning, and selling a few consigned rugs from relatives. With seven sons and a daughter, Ara had plenty of help with the cleaning. Paul, the only remaining son involved in the business today, recalls his dad doing detailed repair work on the dining room table while listening to the radio.
In the late 1960s, Paul and brothers Ron and Marshall bought out their dad's business, which by then had not only grown its area rug business but had also expanded into carpet sales and installation in keeping with the trends of the time. A fire destroyed the store's downtown location, and the brothers relocated to a highway on the outskirts of town. The brothers also gave up the rug cleaning business to focus on carpet and vinyl.
Recalls Paul, "My dad always said, 'When things get rough in the business, you can also do rug cleaning,'" Today, the retailer offers cleaning services once again, though less out of necessity and more because it seemed a logical addition to its services.
CORPORATE STRUCTURE
At Sergenian's in Madison, Wisconsin, consumers can fill all floor covering needs with a separately owned business for broadloom and hard surface operating in the same building as the rug showroom.
The partners who owned Sergenian's have shifted over the years, and eventually the business components were divided up between Paul, an ex-partner, and Paul's nephew Tom. Today, Paul Sergenian owns the area rug business.
The hard surface and carpet businesses share the same building, although they are under separate ownership. The company has expanded to Florida as well, with two flooring stores and a building and commercial business under the Sergenian's name. At this time, there are no rug galleries in the Florida locations.
LOOKING AHEAD
Sergenian's is looking to expand into accessories like throws and pillows, based on customer requests for items featured in showroom vignettes.
Although Papadopoulos says sales were down about 10 percent in 2016 over the previous year, he still considers last year to have been "a good year." He attributes the dip in sales to the fluctuations that the company experiences from year to year, explaining that a handful of large projects can positively or negatively skew sales figures.
For 2017, he says, "With the elections behind us, we feel that 2017 will be a good year. We already see some increased activity with our designers and the special projects they have."
The company has no current plans for expansion, but will focus instead on bettering the business. On the to-do list: improving displays and the appearance of the showroom, and looking into expanding into accessories like throws and pillows.
Another key, says Papadopoulos, is following Paul Sergenian's credo for a successful business. "The guidance Mr. Sergenian has given us all these years -- his vision, and making sure to have the right product and the right people selling it -- continues to guide us in the right direction."
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