09202010 NY-NJ Metro Market Week Over-all Business Report

MARKET WEEK IN NY AND NJ: FOUR
SHOWS WITH DYNAMIC SYNERGIES

By Lissa Wyman

NEW YORK -- New York Market Week Sept. 12 to 17 created a broad sales environment for rugs at every price point from lowly scatters to lofty museum-quality antiques.

Imagine a multi-plex movie theater with four shows running simultaneously -- each one aimed at a different taste level and pocket-book.

Fall Market Week consisted of The New York Home Fashions Market geared to big-box home textiles retailers and major furniture chains; Metro Market Week and the Orica Market aimed at traditional Oriental rug specialty stores, and the New York International Carpet Show, a high end showcase for architects, designers and specialty stores.

Retailers and vendors at all the shows had a survivor mentality that manifested itself in a kind of giddy joy that ran counter to the realities of the continuing economic recession.

As Jeff Brown, vice president of the Shaw Living Divisions stated, "The economy is still very tough, but everyone is going to act optimistic until it actually comes true."

Brown also pointed out that in recent times, the gap between fashion and value has narrowed. "Nowadays, consumers can find very good looking rugs at affordable price points. Fashion is no longer reserved only for high end products," he said.

"Right now, people want value-driven products," said Sam Presnell of The Rug Gallery in Cincinnati. "We have a new slogan," he said with a grin: "Cheap is the new chic."

Presnell was philosophical about current business conditions. "You can't change what's happening in the economy. You've got to wait it out, but you also have to give consumers what they want. Right now, that means a lot of value-oriented merchandise," said Presnell.

Although distinct entities, there was some overlap between the four shows. These synergies added a rich texture to all of the events.

Some importers such as Renaissance Carpets & Tapestries, Ebisons Harounian and Zollanvari exhibited at both the NYICS and their own company headquarters.

Larger importers such as Nourison, Safavieh and Harounian Rugs International had appointments with both home textiles buyers and independent stores and offered totally separate product lines for each retail channel.

The high end and the low end are where the action is, most vendors agreed.

At Safavieh, company principal Cyrus Yaraghi said he saw a new energy at the high end.

"Hand-made customers had a very positive attitude, and the timing is good for fourth quarter selling, " said Cyrus. "The successful Oriental rug stores are looking for high end products. They realize that they can't compete with mass merchants at the low end, so they want products that make them unique in their markets."

Satya Tiwari, president of Surya said that New York is unlike any other market venue. "New York is where we meet with key accounts and do a lot of product development work. These buyers are gatherers of information and making a decision is a very complex task. It's not a simple job,"  said Tiwari.

Over the years, the home furnishings market system has evolved into a series of specialized events geared to specific retail channels, Tiwari noted. "We continue our dialogues at each market.  There is no single market that is a make-or-break event".

Tiwari said that Surya has developed products up an down the price spectrum. "We are doing extremely well with our heavy felted textures that retail for $1,500. They are so cool and so unique, that everyone fall in love," he said. " At the same time, we also introduced a $49 printed rug at this market,"  Tiwari added.

Surya keeps developing new products and programs designed to stimulate retail business. "We will be showing over 400 designs retailing for under $199 in 5x8 size," said Tiwari. "We are also introducing a Quick-Ship program for our top 200 styles that guarantees 72-hour delivery on 5x8 and 8x11 sizes."

Despite the ongoing troubles in the economy, major retail chains have to keep buying new products, emphasized Shaw Living's Brown. "The buyers are still shopping. They want to keep the cash registers turning with products that offer consumers good value," he said. "The bottom line is that we have to keep developing new products at the right price points".

Paul Sullivan, senior vice president of sales and marketing for Orian, agreed. "Mass market retailers are still looking for value, but they also want fashion," he said. "They come to us to see constructions and colors that other resources can't offer. And the sweet spot for retail price point is $150 to $199." Sullivan said that buyers were interested in Orian's unique12-color shags and a variety of lush textural effects that look like hand-tufted rugs.

"Basically, we are seeing a new optimism in the market, but it is guarded. When the job market improves, consumer spending will pick up. It's very difficult to predict the future in the current market. We have to listen to our customers very closely," said Sullivan.

Even at the high end of the market, buyers are looking for value across the board, noted Rafi Amirian, vice president of marketing for Shalom Bros.

"We were very busy on Sunday and Monday and buyers were interested in transitional and contemporary looks with intrinsic value," he said.

Amirian said that retailers are far more optimistic now than they have been in the past year. "Theya re seeing a lot more foot traffic in the last few weeks, so that gives them a big mental boost," he said.

Amirian said that optimism is also extending to vendors. "We had a lot of introductions and we are in a strong position going into the fourth quarter," he said.

Amir Loloi, president of Loloi, was showing for the third time to the mass-market stores who attend New York Home Fashions Market Week.  "This is a much different target audience than we reach at other shows," he said.

"We have a good assortment of scatter rugs as well as hand-tufted and machine made rugs geared to the large stores."

Loloi stressed the fact that business is out there for vendors and retailers who are willing to work hard for it. "Most importantly, in a poor economy, gaining market share is the name of the game."

Looking forward to High Point, Loloi said that the company will unveil a completely remodeled and expanded showroom on the third floor IHFC Design Wing.

"We had a great market, " said Maria Metropoulis-Ward, vice president of  national accounts for Oriental Weavers. of America.  "At one point, we had six major customers in the showroom at the same time."

Metropoulis-Ward said the Oriental Weavers USA label has developed a major scatter rug program for the home textiles market. "We have also introduced a program of value-oriented full-size rugs for big box stores."

Metropoulis Ward said that retailers are optimistic for the fourth quarter and first quarter of 2011. "They are lanning positive promotions, and we are ahead of budget for the year. It's very exciting, considering the economic conditions."

Austin Craley, vice president of sales for Momeni said the company had good attendance at its Carlstadt, NJ headquarters. "Retailers were coming in to fill in inventory and we did well with hand knotted products," he said.

As a new embargo on Iranian rugs is set to begin at the end of September, Momeni had quite a few Iranian rugs in stock. "There is still a demand for fine hand knotted rugs from Iran," noted Arya Momeni, a company principal.

Richard Siminou, vice president of Harounian Rugs International said the company had good response to its private label products for buyers attending the Home Fashions Market. "As a medium-size vendor, our success depends on us being fashion forward and different from the big guys. We have to give the large buyers a reason to buy from us." For Metro- Market buyers, the best response was to HRI's antique reproductions and Indo-Tibetan hand knots, according to Siminou.

"This week, we had the best of both worlds, at both ends of the price spectrum," commented Lee Harounian, a principal of HRI. Taking both worlds into consideration, Harounian observed that some buyers are feeling genuinely optimistic. " I think things are slowly improving,"  he said. "Considering the recessionary times we live in, it was a good market."

Tim Schantz, national accounts manager for Dynamic Rugs, noted that the large retailers attending New York Market Week agree that the second quarter of 2010 remained tough, but that things gradually improved during the third quarter.

"Everyone is interested in buying, but they want fresh looks with high value. They don't want to see the same old things they saw last market. They want to be shown something new," said Schantz. "They are looking for product differentiation."

At Dynamic, transitional patterns continue to gain strength, and subdued natural palettes are becoming more important.  "We are having very positive response to our taupe and gray colorways. It's a very sophisticated look at a value price point," said Schantz.

Marty Banilevi, a principal of Lotfy & Sons, said that he saw a lot of people at the company's Orica headquarters. "Things are getting a little better out there. We feel the investment in the market is worth the results."

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