03242010 Dynamic Rugs Profile Feature

DYNAMIC RUGS POISED FOR
DYNAMIC GROWTH IN NEW DECADE

Matthew Rouhanian, left, president, and Tim Schantz, manager of national accounts at Dynamic Rugs' 95,000 sq. ft. corporate headquarters and distribution center.
 

By Lissa Wyman

FREDERICK, MD -- Dynamic Rugs is poised for dynamic growth through product diversification into the broadloom business as well as greater depth and breadth in the rug sector.

In an exclusive interview with Rugnews.com, Dynamic president Matthew Rouhanian and Tim Schantz, manager of national accounts, outlined the company's philosophy and growth plans.

The company's commitment to the broadloom business is a natural expansion for the company, according to Rouhanian.

"We have had one line of broadloom for the past ten years that coordinates with some of our rug designs. We have also been deeply involved in the roll runner business, carrying over 100 designs. So broadloom expansion is a natural next step," he said.

The company is introducing value-oriented Turkish-made broadloom to retail at approximately $5 per sq. ft. and million-point Belgian-made broadloom which will retail at $6.99 to $7.99 per sq. ft. At the high end, Dynamic is offering hand tufted broadloom which is made in India of New Zealand wool and which will retail for approximately $10 to $20 per sq. ft.

The broadloom lines are for residential and light commercial use and are aimed at the design trade and high end floor covering stores and rug specialists.

"The expansion into broadloom began last year, and we see it as an increasingly important part of our business," said Rouhanian.

Dynamic considers broadloom as a key way to keep its connection to the floor covering specialty store channel.

"High end broadloom is a way for us to become a  more important source for this channel, " said Rouhanian. "It's no secret that floor covering stores have stepped away from the rug category in favor of developing more profitable  business in other installed home improvement categories."

Matthew Rouhanian discusses Dynamic's past, present and future in an exclusive interview with Rugnews.com.

Dynamic has grown at a steady, conservative pace through the economic ups and downs of the past 17 years.
In addition to Rouhanian,  Dynamic's management team includes Jon Morrison, director of marketing, and Tim Schantz, manager of national accounts.

Rouhanian came to the US from his native Iran in the late 1970's and earned an MBA degree  in international finance at the University of Michigan. After a brief stint in the automobile industry in the early 80's (not a good time for the auto business), Rouhanian got a part time job at Furniture & Carpet Land, a retailer based in Rockville, MD.

"Everyone thinks that because I come from Iran, I have some deep connection with the rug business, but nothing could be farther from the truth," said Rouhanian. "I had a business background and had no idea what a Tabriz rug even looked like. I learned a lot over the years, but frankly, I still don't know much about the Persian rug business."

Furniture & Carpet Land was a highly successful operation and soon Rouhanian was managing the company's Kordestani wholesale division with Mike Brown. "We were one of the first vendors to sell rugs to Home Depot," he recalled. "At that time, Home Depot carried only grass carpet. In 1983 and 84, we started selling them inexpensive BCF machine made rugs and hand tufted rugs from China."

Rouhanian formed Dynamic Rugs 17 years ago and began selling Belgian machine made rugs to retailers on a container basis. After two or three years in the "bulk" business, Dynamic began to show at the Atlanta International Rug Market in a temporary space. In 1993, Dynamic moved to a small permanent space in Atlanta and soon began to show at the annual Surfaces Floor Covering Expo in Las Vegas.

Dynamic now has permanent showrooms in Atlanta, New York and Las Vegas to reach the major retail channels of rug, floor covering, furniture and mass market stores.

In the early days, Dynamic specialized almost exclusively in Belgian machine-made polypropylene rugs. After approximately four years, the company began to branch out. Today, approximately half of rug production is  hand tufted from India and China and half is machine made from Belgium, Turkey and China.

With the exception of some specialized high-end products, the company focuses on the $299 to $399 retail price point for  5x8 size.

In the past few years, Dynamic has also become deeply committed to the indoor-outdoor rug category. "Instead of carrying only a few sizes, we stock indoor-outdoor rugs in a full range of sizes," said Rouhanian. "This category continues to grow and many of these rugs are not only for outdoor spaces. They are being used throughout the home," he said.

Looking ahead,  Rouhanian sees both the Internet and Cable shopping channels growing in importance for rug sales. "People don't have as much time to shop in stores, and the Internet and home shopping provides them with a convenient way to select all types of consumer products," he said. "This is going to get even bigger."

Dynamic stocks and distributes its products from its 95,000 sq. ft. headquarters in Frederick, MD. A satellite warehouse in Dalton, GA is used mainly for broadloom and promotional goods.

"We always strive to come out with innovative new products, but customer service is our strong point," noted Rouhanian. "We ship 85% to 95% of orders within 48 hours. It's not just a goal, it's a necessity. With the big retailers, a vendor is in trouble if it falls below the 95% fill rate. If you lose that business, life can be very difficult."

Rouhanian credits Jon Morrison, vice president of sales and marketing;Tim Schantz, manager of national accounts, and the company's team of professional sales agents for the steady growth of the company. "Both Jon and Tim have the determination, customer rapport and knowledge of the market that are major contributing factors to our success," said Rouhanian.

While Dynamic has experienced significant growth over the past 17 years, Rouhanian does not have any interest in creating a mega-company. "My goal has never been to be the biggest," he said." I prefer to sleep at night rather than over-expand."

Dynamic customer service and office team, from left: Sara Rouhanian, Jennifer Clark, Carla Buono, Jill Harper and Katherine Davis.

03.24.10