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Atlanta Market Business Story
BETTER QUALITY NUDGES PRICE POINTS UP; SUPPLIERS AMP UP OUTDOOR STYLE FOR 2016
 Karastan unveiled Panel Kirman Granite, an update of the best-selling 50-color 717 Multi-Color Panel Kirman introduced in 1937. This Atlanta showroom vignette features original drawings, photos and desk from Karastan archives.
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ATLANTA - Rug executives interviewed during the Atlanta International Rug Market last month said that they're expecting the areas of growth for this year to be in the upper end of the price spectrum, as well as gains in the indoor/outdoor category. What's more, they're banking on new technologies to improve the quality and the design of machine-made options.
"I think [growth] is going to be in either the very high end or in the machine-made value segment, and the middle price point category will be soft," said John Uva, sales director for Concepts International. "We hope to attack the higher market with our wool/silk blends out of Nepal." He said that using Nepalese suppliers is an advantage, since there is a faster turnaround to receive the products from this landlocked country, where products are flown to the U.S., rather than shipped in cargo containers.
John Uva of Concepts International introduces Alby, a 100-knot blend of 40 percent wool and 60 percent viscose from bamboo at Atlanta rug market.
As for designs, Uva anticipated that the younger buyers are looking for more transitional designs with subtle patterns and color tones that won't date themselves quickly and which have a more timeless appeal.
Greg Jordt, executive vice president of Harounian Rugs International, agrees that the growth this year will be in the higher end price points. "We see this becoming a larger category," he said. "Not necessarily crazy high-end prices, but a sweet spot might be $1,500 for a hand-knotted, for instance."
HRI is positioning itself to capture some of this growth with collections like Gramercy, a high-end look that's priced around $1,200. A collection called Premier, which has a soft-washed, faded smoky look, is a line that the company "can't keep in stock," said Jordt. Selling for around $1,900, the style is "what consumers are seeing in shelter magazines, but those are five times the cost of this."
The hand-knotted Gramercy collection from Harounian Rugs International offers growth with a high-end look that's priced around $1,200.
Also raising the bar on quality and price is Capel. Cameron Capel, director of sales, says that the company is focusing on hand-knotted options. "People are seeing a value in hand-knotted," she says. The company's Solace line is 100 percent wool and hand-knotted and has a list price of $699. "Maybe it's not a $3,000 heirloom that they'll pass down, but it's a little nicer."
Capel introduces a hand-knotted line packed with value: Solace collection rugs are 100 percent wool with a list price of $699.
At the lower-priced end of the spectrum, innovations in machine-made rugs mean a better value and a more upscale look. "Machine-mades have come so far with what they are able to achieve," says Capel. She points to the success of the Wilton weave Quarry collection, machine made of 100 percent Olefin yarns in Belgium, which debuted at winter markets in four designs, and six colorways.
INNOVATIVE MACHINE-MADES
Oriental Weavers is banking on higher quality in machine-mades, and the higher price points that go along with that. "We see people asking for higher quality so our introductions are a step up from where [our prices] were," said Andy Brumlow, vice president, product development for Oriental Weavers. He said that new introductions incorporate softer hands, more colors, more pile, and a weightier construction.
A medallion design from the new Andorra collection by Oriental Weavers pushes the innovations envelope in the machine-made rug category.
The company's big introduction at market was Andorra, a 20 pattern collection resulting from new and innovative uses of the loom to combine different types of yarn in myriad color options. "It is the highest-quality machine-made that Oriental Weavers has ever done," said Brumlow. It's also a departure from the company's average $299 price point; these rugs will sell for around $449 for the 5x8 size.
Meanwhile, at Safavieh, Arash Yaraghi, principal, believes that "the areas of growth are going to be products that, regardless of price point, are fashion forward."
Safavieh showed on-trend designs at every price point at Atlanta market. The Centennial collection (above) is at the high end, while the machine-made Vogue collection at a value-priced level.
To that end, Safavieh's goal is to design collections that are as on-trend whether they are $3,500-hand-knotted rugs in wool and silk, or $250 machine-made versions. "The key in each case is to represent a style, a design, and a color that's appealing to consumers who want to decorate with fashion-forward looks," no matter what their budget.
Even though Safavieh offers similar looks in its value-priced and its high-end brackets, the less expensive offerings don't cannibalize the pricier ones, he contended. "The person who is buying a silk sofa is not even looking at low price point rugs," he said.
Dynamic Rugs has also been experimenting with new techniques in machine made offerings. The company's Mehari collection gives more variance in colors, while its Lapis collection is made of a 100 percent polypropylene yarn that has a fine denier and offers the sheen and feel of viscose. "We are using looks that allow for more colors in a single rug - like 10 colors instead of 6," said Katie Stewart, director of product development.
The Artisan collection from Dynamic Rugs is handmade of viscose and hand-painted by artisans in India. Consumers get a one-of-a-kind rug for an MSRP of $24 a foot.
Matthew Rohanian, president of Dynamic Rugs, says he thinks that because of such developments, the machine-made category will experience more growth than handmade rugs. "The technology has improved, there's so much design-wise and color-wise."
On the handmade side, Dynamic introduced the 100 percent viscose Artisan collection, with excellent response to its lustrous hand-painted motifs by artists in India. The line is offered at an MSRP of $24 per foot.
At Karastan, Brandon Culpepper, vice president of specialty sales, told RugNews.com the company's limited edition concept is resonating with dealers. "We are excited about the reaction to the Panel Kirman Granite, a new take on what has been our most iconic design since 1936. Customers at market were moved by the display of both rugs together. This design has been a staple of theirs for so many years," he said.
But the big action at Karastan's showrooms in Atlanta and Las Vegas was with two new Van De Weile wool introductions, Manifesto and Titanium. "They were best sellers for us. The construction and the wool (which is the same quality as we use in our Axminsters) brings these qualities up a notch from synthetics. They're made on machines that are faster so the retail is going to be around $899 for a 6x9. It's a zone above synthetics but priced so that dealers will make inventory investments. That was our conscious decision."
UPSCALING OUTDOOR RUGS
Momeni has several areas of focus this year, said Stephen Hoberman, vice president of sales. The company is directing attention at niche categories where it can grow, including indoor/outdoor and kids' rugs. The company also expects its one of a kind and custom businesses to do well. "Consumers are willing to pay a small premium to get exactly what they want," said Doberman.
In the indoor/outdoor category, Momeni is aiming to expand its offerings beyond the typical neutrals that dominate the category. "Two to three years ago, we differentiated with bright colors and geometric designs," said Hoberman. The company is also hoping to make customers more comfortable paying a little more for better-quality outdoor rugs. "Companies used to be afraid to go over $99 retail," he said. "Our retails aren't exorbitant, but we wanted to focus on quality."
The Baja collection of outdoor rugs from Momeni is designed to appeal to trend-conscious customers. A step-up indoor-outdoor line, it is machine made in Egypt of 100 percent polypropylene.
The same holds true for kids' rugs, said Hoberman. "We saw a scarcity of designs, and a lack of originality," he said. "We saw an opportunity for mid- and higher-end retailers. And the kids' rugs tend to change the whole attitude of our showroom."
Kaleen, too, is focusing on higher-end offerings for indoor/outdoor rugs. "I feel that indoor/outdoor is a big category," said Monty Rathi, COO of Kaleen. "We are trying to develop a higher price point in this area. It used to be $199-200, but we want to develop a $399 price point - the consumer is ready to step up to higher-end outdoor rugs."
Kaleen infuses the extensive Habitat indoor-outdoor collection of 240 rugs ($299 retail in 5' x7'6") with fashion-forward global looks handmade in China of polypropylene with a "K-Stop" non-skid backing.
KAS is also banking on growth in indoor/outdoor. At the market, the company showed eight collections in this category, and is planning on creating a book highlighting its assortment to help market it to retailers. "It's the largest assortment we've ever had," said Santhi Yarlagadda, vice president of business development. "People are using these rugs inside because of their easy-care features."
The company's outdoor products, made of UV-treated polypropylene, come in a wide array of constructions, including flatweaves, braided options, and traditional designs. One highlight is outdoor shag in eight solid colors, which sells for $225 for a 5x8 size.
KAS Rugs' indoor/outdoor assortment includes its best-selling solid-colored shag range as shown in this sample blanket for the Key West collection.
CROSS-CATEGORY EXPANSION
For many rug companies, it's not just rugs that are essential for a robust business. In recent years, Surya has been focusing on its accessories business, and judging from the showroom real estate devoted to lighting, textiles and accessories, this area continues to be a strong growth category.
In the Surya AmericasMart showroom, a vignette showing outdoor rugs, decorative pillows, and lighting merchandised as they might be on a retail floor.
"We think the idea of design coordination makes it easier for our customers to fulfill the demands of their customers," said Mark Abbas, director of marketing. "The more accessory categories we add, the easier it is to coordinate a room." To facilitate the company's growth in these categories, Surya has expanded its product development team and brought on board lighting-industry veteran John Haste as senior vice president, business development.