04122015 Rugnews.com Exclusive: High Point Market Business Preview

Rug Vendors Project a Very Good Year

The rug manufacturers set to show at High Point Spring 2015 are coming off a first quarter where sales, depending on category, are up single to double digits, according to the companies RugNews.com surveyed.  Prior to the show, which runs from April 18 to 23, those interviewed projected a very good market and positive growth throughout 2015.

All signs are pointing to a positive year, according to Jonathan Witt, senior vice president, Oriental Weavers. "We had really strong winter markets and expect the same for High Point. Our Tommy Bahama licensed collections have been a driving force in that positive momentum and have exceeded everyone's expectations. PANTONE UNIVERSE collections continue doing exceedingly well also," he said. 

Nourison is preparing for strong growth in 2015, stated Alex Peykar, principal of Nourison. "Considering all the new products that we have introduced with incredible perceived values, we do expect a healthy double digit increase."

Kaleen has had a good start, reports Blake Dennard, senior vice president of Kaleen Rugs. "While there was a glitch in February due to the short month and bad weather, March came roaring back," Dennard said. With lots of new products and a full line of wall-to-wall handmade broadloom to show, Kaleen is looking forward to a successful 2015. 

Despite some shipping delays due to Dallas winter weather, Feizy is expecting 2015 to be one of its best years, according to Leah Feizy, executive vice president of the company. "We've seen double digit growth in most of our territories and have great expectations for the rest of the year. We expect the upward trend in sales to continue, supported by our latest catalog and the attention we are devoting to the customer experience at every level and within every department," Feizy said.

Seth King, company vice president of sales at Surya, said, "In March, we ended our best fiscal year to date and that has given us a lot of forward momentum going into market and the spring season. We're going to be rolling out our made to order programs and continuing to add more breadth and depth across all of our categories, which should help to position us for significant growth moving forward," King said.

"It is the rebirth of rugs for Couristan," said Larry Mahurter, company vice president of marketing. All the company's rug categories are up, some in double digits, Mahurter added. Couristan, which does not participate in High Point, is getting into its second phase of new product introductions for 2015 and expects a great fall season.

Loloi Rugs is riding a sales' surge that began at January markets in Atlanta and Vegas, noted Cyrus Loloi, a company principal.  He attributes increased sales in large part to product innovations in texture, constructions and new blends of yarn in 2015 collections. 

Expectations high for High Point Market

With showrooms scattered across 180 buildings and 11.5 million square feet of show space, High Point can seem a daunting market, but rug suppliers are ready with a wide variety of new products and have done their homework to connect with buyers.  

Loloi said, "We've done a lot of marketing ahead of the show, some in consumer magazines, to get the attention of dealers and have launched a new website, loloirugs.com, which is very user friendly. And we've also set up appointments with many of our accounts." 

High Point is always a good market for us, said Oriental Weaver's Jonathan Witt He added, "This will be the first time these buyers are seeing over 100 new introductions that were very well received in Atlanta and Las Vegas and we expect them to do well in High Point, too."

"Nourison has booked a good number of appointments that are expected to result in a very good market that will carry through the balance of the year," Peykar said.

Feizy's sales team is confident with a wealth of on-trend product and a new catalog. Feizy explained, "We've created some exciting new programs for our customers that will allow them to maximize their ROI in the rug category while catering to their specific customers."

Surya expects to see not only existing customers but also lots of new buyers. Along with new designs in all categories, King said, "We're going to be showcasing our Made to Order Art Program and Cut and Sew Rug Program, both designed for customization options and increased design flexibility."

Now showing in the Showplace building, Kaleen expects great results. Dennard noted, "We moved last fall and had the best High Point results ever. We have made appointments with our major accounts. We saw about 250 accounts in October at High Point and expect to see even more this month." 

E-Commerce comes of age for rugs

After years of cutthroat competition that drove down rug prices, online rug dealers have become a healthy venue for rugs.

"Fortunately the landscape of the e-commerce channel has changed to a model that does not fight for lower price," explained Peykar, who added, "The sites that are doing well have created their own identity and customer base and they hold their own healthy margins."

Kaleen is seeing "incredible growth with e-channels," noted Dennard. "And the outdoor segment as seen in patio stores, pool and spa stores and home center departments are doing well with our outdoor rugs lines," he added.

As convenient as on-line shopping is, many people still want to be able to shop at a brick and mortar location, noted King. For Surya, retail that offers a single source for home accessories is best. By offering pillows, throws, wall décor, lighting and other accents, Surya is making it easy for the consumer to find everything in one place, King explained.

Nourison, which also offers pillows, cubes, and table runners, is doing well through home furnishing stores that offer all categories, as well as e-commerce, Peykar added.

Multi-store furniture chains and design-focused furniture stores are generating sales for Feizy, while catalog and online channels continue to thrive for Oriental Weavers. Witt added, "It has been a pleasant surprise to see a nice lift in the more mature brick and mortar furniture store channel as well."

Challenges in the rug business

Not only did the recession drive price points lower, but also a lot of places that were good channels for rugs went out of business or eliminated the category. "The challenge affecting all rug suppliers is that the overall pie has gotten smaller," said Mahurter. "There is more competition." To win sales, Couristan has been renewing its product line for up to date fashion. "We have put time into product development, color sequence and design work and the results are better than ever," Mahurter stressed.

Even a manufacturer with a strong reputation as a fashion leader, has to stay ahead in today’s trend-driven market. "During the past several years we have seen increased demand for a growing variety of product lines, all of them requiring up to the minute fashion. Keeping ahead of the changes in color, design, price points and textures continues to be very challenging," Peykar stated.

With many manufacturing costs increasing as well as the pressure to find weavers and issues with transportation, Dennard pointed to evaporating margins as a major challenge. "The industry needs a price increase. We need to get back some of the lost margins," he said.

Finding and retaining skilled and talented labor continues to be an issue. Witt of Oriental Weavers pointed out, "The true art of hand-knotted and hand-tufted qualities are in serious jeopardy. This has been the case in China and we are seeing this trend spread across many of the historical rug manufacturing areas in Asia and the Middle East."

04.12.15