02032016 Kas Rugs Celebrates 35th Anniversary; A Retrospective and Future Strategies

ATLANTA - New Jersey-based KAS rugs chose the winter 2016 Atlanta International Rug Market for its 35th anniversary celebration, and the whole family, including the company's namesake and co-founder Kas Yarlagadda, turned out for the festivities.

Scores of long-time customers and industry colleagues came to help celebrate at the company's AmericasMart showroom on Jan. 14, and the fun-filled event did not disappoint.

RugNews.com: Did either of you aspire to another career, or did you always think you would join the family business.

Santhi Yarlagadda: I majored in economics and business administration in college. I was a trader on Wall Street and absolutely loved it, but I knew Wall Street wasn't a lifetime career for me. My job is to grow our business through e-commerce and laterally, but a lot more creativity is involved than I expected. I honestly love what I do now and how my role at KAS has transformed in the 11 years I've been here.

Kranthi Yarlagadda: I received my undergraduate degree in operations research and industrial engineering and went on to become a bank analyst. After my MBA, I did a stint in consulting before realizing I could do so much more at KAS. I love wearing many hats and working with a team that cares about KAS as much as I do.

When did each of you become involved in the company and how did you decide to split responsibilities at Kas Rugs?

Kranthi: I started in December 1999. Basically I'm doing the same thing as when I started: improving all the operations and flow, but we were much smaller then. At KAS, we're still a small business and we all wear lots of hats - which I love. Santhi is in charge of e-commerce and new business development like licensing, and she oversees marketing.

I've always wanted to work with my data; studying where the growth in the industry was coming from. I've done more forecasting and purchasing in the last 10 years. But In the beginning it was mostly improving internal systems. We grew a lot the first five years after I started.

Santhi: I started in November 2003. The reason I came to KAS was initially because customers wanted to start selling our rugs online. It all kind of blossomed over a conversation about how we would enter the e-commerce segment of the business. Online sales were a huge opportunity that we knew would become its own growth sector. I came in to get that process going.

And every month, we would add one major account - it was very exciting to be on the cusp of this shift in the way rugs were sold. Now, we have over 50 internet accounts; from that number, I'd say we have roughly 10 to 15 key partners.

When I started, I was only doing e-commerce and marketing. But the larger umbrella is now business development: Rebranding and creating the new face of KAS, what materials will look like with our name out there, and what image we want people to have of us. That has opened up the doors for KAS to grow into new distribution channels and licensing in more recent years.

We understand that your dad, Rao Yarlagadda was a pharmacist before founding Kas? What prompted the transition to rugs?

Kranthi: Rao has a master's in pharmacology. He owned two pharmacies and worked for Pfizer before starting KAS. He came to the U.S in in 1973, and Mom and I came in '74. Santhi was born here. They chose the rug business because the barriers to this industry were much lower [than other industries] in the U.S. Dad's nephew, Hari [Tummala] had spent a lot of time in the Delhi area, so he knew how things in the rug business were done in India.

When did Hari Tummala become involved in the business?

Santhi: Hari has been involved in the business since it started. He is Rao's nephew - his older sister's son. He came to the U.S. in 1980 and when he, Kas and Rao started, they did everything themselves: baling rugs, calling on customers, meeting with vendors - everything.

Can you explain how Rao and Hari's roles have evolved over the years?

Kranthi: Eventually Rao wanted to cut down on overseas travel. Hari took over sourcing, and continued traveling to customers, handling sales. Rao now focuses on sales and pricing, and as the company grew Hari focused more and more on sourcing and product development, although he still handles select key accounts.

Santhi: Hari is probably the most valuable asset we have when we are designing for a customer. He is amazingly creative at sourcing and has a lot of vision when it comes to product development. He draws inspiration from trend shows around the world, from the home industry in general, and from fashion and color trends.

The company is named after your mom. Is she still involved? Is anyone else in the family involved?

Kranthi: My mom is retired now, but she helped with the pharmacies we owned prior to Kas, and before that she worked in catering and hotel management in India. She has always been an artist; that's how she initially got involved with designing our Dhurries.

Santhi: Hari's brother, Raja Tummala, is Showroom Manager for KAS, and is responsible for the logistics of our trade shows at major markets.

As the second generation at Kas, what do you think you have achieved that has surpassed your Dad's expectations? [Editor's Note: At this point, Rao Yarlagadda jumped into the interview, wryly adding his own perspective on the next three questions]:

Rao Yarlagadda: Rao Yarlagadda: ?≤?Θ╝?⌠I am so happy that my daughters turned out to value the sincerity and honesty I have built this company on, and that they are continuing forward with the same values.?≤?Θ╝?Ñ Laughing, he says, ?≤?Θ╝?⌠Their biggest achievement is putting up with me!"

What has been the biggest change (in the company and in the industry) since Kas began?

Rao Yarlagadda: The biggest change was the disappearance of hand-knotted rugs after the recession of 2008. They were no longer popular, which led to the rise of machine-made and hand-tufted. In the last 10 years, we've seen a lot of innovation - new constructions, new fibers and new technology. Texture and visual depth have made machine-made rugs grow tremendously as a category.

What product has been the biggest sales success in the history of KAS?

Rao Yarlagadda: Dhurries - they were the fashion of the times when we started the company. We made the best there was in the market. That is the category we developed, and we were known for quality Dhurries both in India and the U.S. KAS was known as THE dhurry importer in the 1980s. In the last five years, we've been very strong in shags. A lot of people have shags, but we are well-known for unique constructions in that category. We built a reputation for tropical and floral designs 10 years ago as well and that is still going strong.

What are you most proud of in terms of your contribution to the company?

Kranthi: I used to say we operated by the seat of our pants because we were small. I wanted the company to run so well that nothing would go wrong if I were gone. I took no vacation the first two years - I was here to get things on track. I am really proud that everyone at KAS has been with us for a long time, and that we have so few turnovers. It feels like a family, but a KAS family.

Santhi: My biggest accomplishment was the rebranding of KAS. We never wanted to lose sight of the value of the company and our integrity. The question was, how do we move into this next generation of buyers? The rebranding helped us stay true to who we are as a company, but put a new face on KAS. That was the goal.

What have you done differently to steer the company into a new period of growth?

Kranthi: I manage operations. I've focused on giving our sales people what they need in terms of technology. Rao used to do all the purchasing, but I took it over five years ago. We have always done things our customers ask for, and we pride ourselves on servicing our customers' needs. My contribution is doing these things more efficiently and cost effectively. Santhi has helped us grow into new distribution channels. She is great with relationships; she pushed us into social media. And she has overseen our web development and rebranding.

Santhi: In 2014, my role transformed into something much larger. We signed the two brands, Donnie Osmond Home and Bob Mackie Home. We signed them both in the same year that we rebranded the company - 2014, at the January Atlanta market, which was a banner growth year for us.

At the same market, we added two new product categories, pillows and poufs, that we felt would complement the assortment for our customers. We're at the tail end of the rebranding, redefining who we are, changing our marketing, our face and then transforming all of our showrooms to a consistent vision across the country. At the end of 2015, we came full circle with the new website launch."

How do you balance work and family time? What do you do to relax?

Kranthi: We work normal days. Everyone at KAS does. During market time, we work as long as we need to, and we work from home when we need to - but we do strive for that balance.

What is next on the horizon for KAS?

Cheers! Happy Anniversary, KAS Rugs