High Point Pre-Market Business Report:
AS BUSINESS PICKS UP, VENDORS
GOING TO MARKET WITH NEW OPTIMISM

By Lissa Wyman

HIGH POINT - After suffering through an unusually sluggish Summer, rug executives are expressing optimism for the fourth quarter. Gas prices are coming down, consumers are going back to the stores and retailers are beginning to buy rugs again.

The Summer doldrums also gave vendors an opportunity to assess their new product strategy as well as explore new ways to make their businesses more successful. 

In a high competitive market, rug makers and importers say they must constantly change their merchandise mix and improve sales and customer service in order to grow.

 

Several rug executives noted that the increased number of markets is diluting the effect of  each event. "We don't really know for sure what to expect in High Point. But we're hoping for the best,€VbCrLf said Alex Peykar, a principal of Nourison. "Atlanta continues to be the only real market geared specifically to rug buyers and it remains our most important event. Las Vegas on its own may eventually have an impact, but at present it is still not large enough.€VbCrLf

John Feizy, president and founder of Feizy Rug said that product development has been a primary concern for the importer in the past year.

"We are really looking forward to High Point.  We have pared down our running lines during the last several markets and are introducing eight new collections this October. The design staff has worked long hours to assure these products are the cream of the crop,€VbCrLf noted Feizy.

Feizy anticipates a strong market. "We did good business at the last High Point market and now that the economy is on an upswing, we expect to see even more traffic.  We have already seen an increase in the amount of appointments booked, so all signs point to a great show."

With some exceptions, most rug vendors are not planning a major introductory event for High Point.  "We're aren't introducing a lot of new items this Fall because we plan to make a major splash in January. However,  we are anticipating a good High Point market," noted Jonathon Witt, executive vice president of marketing for Oriental Weavers Sphinx. "We think the date change will make a positive difference," he said. "With High Point now contained in a one-week period, traffic will be consolidated," said Witt.

After a quiet Summer for the entire industry, Witt said business is picking up at retail. "The Dow is at record levels, gas prices are going down and interest rates holding steady. Those are all good signs," he said.

According to Steve Codella, vice president of sales for Couristan's eastern region,  the company has been on a record growth trajectory for the last year. "Business is good, but it's not easy,€VbCrLf he said. "We've got a good, aggressive sales force and we're out there clawing and scratching to get our share of the business.€VbCrLf

Couristan, which sells broadloom carpeting as well as rugs and runners, has recently doubled its warehouse capacity in Dalton, GA. "In 2007, our growth will focus on production from our new Chinese manufacturing facility,€VbCrLf said Codella.

Yavar Rafieha, vice president of sales and marketing for Abbyson, said the company has doubled its IHFC showroom to 4,000 sq. ft.. It will now contain both rugs and furniture. "We are evolving into a total home design and manufacturing business, and the expanded showroom is one step in our long-range growth strategy,€VbCrLf said Rafieha. "Since we doubled our space, out goal is also to double the number of retail appointments during market,€VbCrLf he said.

"Our research indicates that approximately 43% of the buyers that come to Las Vegas are from the west. That means that High Point is still the place to see buyers from the east and Midwest.€VbCrLf

Rafieha said 2006 has been a year of growth for Abbyson, in terms of product, marketing and brand building. "This has been one of our strongest years, and in 2007 we are looking for much more growth and plenty of changes,€VbCrLf he said.

Safavieh, another rug vendor who recently added furniture lines, is also expecting a good market, according to company principal Arash Yaraghi. "I think High Point will continue to do well, even though people are excited about the Las Vegas Market,€VbCrLf he said. Safavieh has a presence in both Las Vegas and High Point, but the High Point market gets more focused buyers, he noted.  "The main reason people come to High Point is to find products, not to gamble or go to restaurants and shows,€VbCrLf he said.

"We're expecting a good High Point event,€VbCrLf said Reza Momeni, president of Momeni. "After a quiet summer sales season, the retail business seems to be coming back strong. That gives the buyers a tremendous psychological boost.€VbCrLf

Momeni said that High Point represents such a diversity of buyers that it is difficult to pinpoint trends. "It's such a big market that everyone seems to be looking for something different. Fortunately, we have a wide variety of collections. Hopefully we can fill the demand.

Nourison, one of the largest rug importers in the business, is not resting on its laurels. "Business is okay, but it doesn't get easier,€VbCrLf said principal Alex Peykar. "We work harder, and thank God, we continue to grow. "

 "We constantly have to respond to dealers' expectations and changing fashions,€VbCrLf said Peykar. "We have to provide the best products, perceived value and levels of service to our customers. We are now in the process of developing more products than ever before.€VbCrLf

At Surya, president Satya Tiwari also noted that survival depends on constant change. "Things are changing and there are a lot more players in this business. In order to survive, companies must adapt to change and interact with customers in a very transparent manner,€VbCrLf he said.

High Point continues to be strong for Surya. "We love this market and it is historically our best in terms of profitability. There is very little customer overlap between Atlanta and High Point, so it is important for us to maintain a presence in both markets.€VbCrLf

 "We are expanding our showroom from 1,200 to 3,000 sq. ft. at Showplace,€VbCrLf noted Tiwari.

"Not only do we do a lot of business at High Point, but we also learn a lot. In many ways, I'd rather see what's going on with other accessory companies than with other rug companies. High Point broadens out scope.€VbCrLf

Tiwari noted that the company's goal is to grow Surya into one of the rug industry's largest companies. "We are building our company on the basis of a strong sales force, customer service,  fashion products and full transparency with our customers,€VbCrLf said Tiwari.

"We're going to High Point with a full deck of cards," said Amir Loloi, president of Loloi Rugs. "We have a lot of introductions and business is continuing very strong for us. It will be a lot of fun, and we anticipate seeing more key customers."

Looking ahead, Loloi said the company is preparing for an upswing in the economy. "We are still a very young company, so we are in our initial growth phase. However, we are building up our inventories to be ready to respond to a very strong Fall selling season."

High Point also functions as an incubator for future styling, noted Asha Chaudhary, chief executive officer of Jaipur Rugs, an importer specializing in fine hand knotted rugs.

"High Point is always a good test market. We get a lot of feedback on our lines from designers, which helps us fine tune our products.  High Point is also a good place to study new trends in all home furnishings categories,€VbCrLf she said.

Chaudhary said that Jaipur is developing new collections to broaden its customer base.

 "We are using High Point as a soft launching point for a new group of rugs that represents more aggressive price points and  diversification of our line,€VbCrLf she said.

"High Point represents a completely different customer base that either Atlanta or the New York Metro Market,€VbCrLf noted Lee Harounian, a principal of Harounian Rugs International. "Furniture buyers, in general, are more interested in higher ticket items.€VbCrLf

High Point is expected to be strong,  Harounian predicted. "Gas prices are coming down and people feel they have more money in there pockets now. It's a big change from this Summer, which was slow for the entire retailing business. I think the last quarter will be good, and will set the stage for a very good January market.€VbCrLf

"Business has been up and down for the past year, but right now, it seems to be on the  rebound. So we are looking forward to a strong High Point market,€VbCrLf said Hari Tummala, executive vice president of Kas Oriental Rugs. "We have been targeting furniture stores for some time, and we have fresh new color palettes and styles tied to home fashion trends,€VbCrLfhe added.

"We are optimistic for High Point. Business has picked up during the last two months, so I think that the momentum will carry through the fourth quarter,€VbCrLf said Samir Abuhadba, general manager of United Weavers of America.

"We always go into market with a lot of enthusiasm,€VbCrLf noted Joe Barkley, vice president of sales and marketing for Kaleen. "Although some smaller stores who normally come to High Point have told us they are not coming in October, our appointment with major furniture retailers are running ahead. Retail business was slower than normal this Summer, so maybe some stores are passing on the Fall market,€VbCrLf he suggested.

Barkley said he was pleased with the Monday to Sunday format this Fall. "I think customers like it this way because it involves only a one week trip. "So far, they are sticking with the official opening dates. Most of our appointments are for Monday, Tuesday and Wednesday,€VbCrLf he said.

Barkley is another vendor that counts High Point as one of its most successful events. "I'm very bullish on High Point. We are going into our third year, and it's always been profitable for us. Looking ahead, it will be interesting to see what happens with three major markets, including High Point, Atlanta and Las Vegas. One of them will suffer, but I don't know which one,€VbCrLf said Barkley.

Steve Mazarakis, president of Hellenic Rug Imports, said that vendors are learning to be nimble in an up-and-down economy. "Business was very slow this Summer, and we'll see what happens in the fourth quarter. In order to come out ahead in times like this, you've got to play it day-by-day,€VbCrLf he said.

Kami Navid, president of Jaunty Rug, said that third quarter sales were up, giving everyone a dose of end-of-year optimism. "The Summer is always slow, but we have noticed an increase in business, so we are optimistic for the Fall selling season. And when business is good at retail, the buyers come to market to buy. As we call dealers to make High Point appointments, we've noticed a more positive attitude on the part of retailers,€VbCrLf he said.

High Point offers especially good potential for Jaunty, Navid noted. "We are targeting furniture stores with our total marketing system. It's designed for stores who want to get into the rug business without too much investment,€VbCrLf he explained.

Chandra Rugs was founded last year and has  been shipping merchandise  to stores for several months, said Tiwari."Initial reports from our customers indicates a strong sell-through at retail, so we are very encouraged," he said.
 

10.14.06