NEW YORK -- It's not often that home furnishings suppliers dare to cross the line between retail and wholesale, but Safavieh manages to straddle both market sectors with ease.
What's more, the company is now expanding its wholesale operations to include both rugs and home furnishings.
"Our wholesale operation is completely separate from the retail operation,€VbCrLf said company principal Arash Yaraghi, who told rugnews.com that Safavieh considers its own stores customers to be treated the same as any other retailer.
Yaraghi said the company's strictly enforced pricing policy ensures that prices at Safavieh-owned stores are on a par with the company's other retail customers.
In addition to over a dozen company owned stores, Safavieh products are found in many retail channels from trade-only showrooms to upscale retailers, big box chains, direct mail catalogs, and Internet retail websites.
Safavieh's precedent for selling both wholesale and retail is far from new. In fact, the two sides of the business were established almost as soon as the Yaraghi family regrouped in the US after leaving their native Iran after the 1978 revolution.
Arash, Cyrus and Ahmad Yaraghi are principals of the company, which was founded in Iran 1914 by their grandfather.
"The revolution closed the family rug business in Iran overnight,€VbCrLf Yaraghi said. "We moved to New York and in a short time opened our first showroom at Madison Avenue and 32nd Street as a retail operation. But as we expanded, we began producing our own rug lines, which friends told us they wanted to carry in their stores.€VbCrLf From that point, Safavieh's wholesale operation emerged.
The original Madison Avenue space is now the company's New York wholesale showroom. It is now undergoing an extensive, $500,000 remodeling. When complete, it will convey the company's new marketing direction, replete with vignettes mixing furniture and rugs.
Total Home Furnishings
Safavieh principals view themselves primarily as merchandisers of total home environments. "When you do that, you are always up to date with fashion, fabrics, colors and trends,€VbCrLf Yaraghi said. "And you make beautiful rugs to fit into those environments.€VbCrLf
Safavieh currently has over a dozen retail stores in New York City and the affluent suburbs of New Jersey, New York and Connecticut. These stores are already showcasing lifestyle merchandising of furniture and rugs.
On November 1, 2005, the company opened a new store in Glen Cove, NY, featuring a broad assortment of fashion and traditional rugs as well as a variety of brand-name furniture "salons.€VbCrLf
Safavieh's furniture offerings, initially exclusive imports, are now augmented with top brands from companies such as Baker, Hendredon, Maitland-Smith and Ralph Lauren.
Expanding Wholesale Categories
Safavieh is also expanding its wholesale strategy to include not only rugs, but furniture and home accents as well.
Yaraghi said that showrooms in High Point and the new World Market Center in Las Vegas are integral to its growth and positioning as a total home furnishings company. "We consider our business as something more than making rugs,€VbCrLf Yaraghi said. "We see ourselves as producers of lifestyle rugs and furniture that will give consumers beautiful homes.€VbCrLf
The new showroom at the Las Vegas WMC now shows both furniture and rugs. Currently, the High Point showroom carries only rugs, but furniture may be added in the future. The Americasmart Atlanta showroom carries rugs exclusively.
Vertical Rug Resource
Safavieh's rug manufacturing philosophy involves vertical involvement in every stage of production. "We have facilities in most of the countries where we produce our rugs,€VbCrLf Yaraghi said.
"We work the same way fashion designers do, and we go through a lot to make the rug completely ours.€VbCrLf
Yaraghi said the company makes all the production decisions, from researching the wool, to how it should be prepared and dyed, the choice of foundation, the weave specifications and finishing washes.
The majority of design work is done in-house, but the Yaraghi brothers have recently relaxed their philosophy of design autonomy. New collections designed by names such as industrial designer Walter Nicholas are now being added to the line.
Furthermore, the customer base of interior designers gives Safavieh an edge in predicting fashion and home furnishings trends, Yaraghi observed.
Interior design clients help the company interpret broad design concepts into viable, marketable rugs. By incorporating input from designer customers, Safavieh creates new looks and modifications of traditional designs that work in today's home environments, Yaraghi said.
"We know that consumers are tired of detailed formality and restrictions that come along with tradition. More relaxed and casual lifestyles are taking over. But consumers still respect and value tradition,€VbCrLf he explained. "So we created East meets West designs by taking elements of formal Persian and European styles and combining them with nomadic values in color and construction.€VbCrLf
The retail and wholesale segments of the business also provide synergies for one another, Yaraghi pointed out. One benefit for wholesale customers is Safavieh's ability to test new product lines at point of sale in its own stores before rolling them out as market introductions. In this way, primary consumer research is integrated into each new collection, according to Yaraghi.
Marketing sophistication involves a lot more than product design. Yaraghi attributes the company's success in part to a marketing mix that includes a state of the art website, cooperative advertising programs, direct mail, and a free "on-line store€VbCrLf that wholesale customers can attach to their own websites. This allows the retailers to sell Safavieh rugs while maintaining their own identity.
Company headquarters, including a warehouse with 30 foot ceilings and a showroom, have recently been moved to Port Washington, NY, from Secaucus, NJ. The company's main distribution center is a 250,000 sq. ft, four-story building in Allentown, PA, that has been refurbished for Safavieh's purposes.
The 21st century Safavieh has come a long way from its 1914 beginnings in Isfahan, Persia. Named for the Persian Safaved dynasty that reigned from 1500 to 1722 in what is now Iran, the third generation family management team continues to adapt to the constant changes in market dynamics and consumer demands.