Rug category maintains position of growth

HIGH POINT — Furniture retailers looking for a surefire area to grow business might want to consider investing in area rugs.

Furniture Today estimates the category’s 2016 sales at $5 billion, up 4.2% from 2015’s $4.8 billion in sales. Once again, that rate of growth outstripped the home furnishings industry’s growth rate as a whole, which FT estimates at 2.4%.

Looking ahead a bit, Furniture Today believes the rug channel will continue its upward trajectory, climbing to $6.24 billion by 2021, which represents a 30% spike in business. Over that same five-year time frame, the home furnishings industry is projected to grow by 19.8%.

Rug producers say their 2016 reflects the trend as the category continues to grow. Additionally, while times are good now, they believe better days lay ahead in this fashion-forward home accessory category.

The year has been one notable for change for Jaipur Living, which rebranded itself from Jaipur Rugs earlier in 2016 and broke ground on what will be a 180,000-square-foot facility in the Atlanta suburbs.

“Through our rebrand, we set out to really celebrate what makes us unique, elevating our current look while staying authentic to what has made Jaipur a name in the industry,” said President Asha Chaudhary. “We’re pushing boundaries and spreading our wings through partnerships with like-minded brands, and we’re focused more than ever on education, not just of our team and our artisans, but also the design community and our dealers.”

While officials at KAS Rugs say 2016 has been uneven, it’s been successful due to efforts from sales staff to build on a strong 2015.

“We have worked hard to build our West Coast sales territories and a number of other areas of the country,” said Wendy Reiss, vice president of sales and national accounts. “We have seen strong growth in our furniture store segment, which was one of our main goals. We have also made great strides with on-line business.”

Handmade specialist Harounian Rugs International has been on a roll since 2013 according to Greg Jordt, senior vice president of sales and marketing. Specifically in 2016, Jordt said HRI’s top performers were Avalon, Rosewood, Aria and Premier.

Machine-made specialist Orian Rugs spent 2016 in growth mode, introducing three times as many collections as it bowed in 2015 with a focus on increasing sales in the dealer/regional furniture channel, e-commerce and in big box retail.

“The response to these new, diversified product introductions has provided an infusion of new business with our existing customers,” said Deonn Baker, vice president of e-commerce and marketing. “New product introductions have also enabled us to gain placement in several newly acquired online and regional accounts.”

Celebrity power helped fuel growth in some channels, particularly those stars with a background in home décor. For instance, Loloi scored big in 2016 with its Magnolia Home by Joanna Gaines introduction. Retailers ranging from Top 100 stores to flooring specialists reported amazing consumer demand.

Arash Yaraghi, a principal of Safavieh, said the company found the field to its liking in contemporary and transitional designs that appeal to today’s colorful tastes.

“Some of our newest product lines indulge the modern home decorator’s definite fondness for timeless designs with contemporary styling and colors. These reinterpretations of traditional looks are doing very well for us because they appeal to people’s energetic tastes in just about everything,” he said. “The other aspect of keeping pace with the modern home decorator’s fondness for reinterpreted classics is our ability to create these rugs across all price points and in all qualities. This is especially true in the latest power-loomed, transitional styles that we are producing in many more colors than could ever be created in the past.”

A push into more machine-made rugs — around 30 new collections rolled out in 2016 — helped fuel a strong year for Surya, according to Seth King, vice president of sales. The company, which moved from Calhoun, Ga., to nearby Cartersville this year, reported solid numbers in all of its rug categories as it aimed to provide good, better and best products for its customers.

“One of our key focuses this year has been to round out our product offering to provide more value across the spectrum,” King said. “That way, consumers can find the look they want in their choice of a higher, mid-level or lower price point — whatever works with their budget and home decor goals.”

Outlook for 2017

While the rug category is on a hot streak, those in the business believe those tailwinds will continue into 2017 and beyond. Of note is there’s no election on the horizon, meaning things will start to settle back down into a more consistent pattern.

“With this insane election year behind us, hopefully it is back down to business, and we will see consistent growth. I think inconsistency seemed to be a word for many this year from month to month among many retailers and wholesalers,” said KAS Rugs’ Reiss. “We here at KAS are very optimistic that we will continue to build on all of our successes this year plus expand in other areas. Our strong growth in furniture channels and Internet will continue to be a focus.”

HRI’s Jordt says it’s an exciting time for those who deal in the higher end segments of the industry. In rugs, that means a greater emphasis on hand-knotted constructions.

“There is no doubt that ‘high end’ is trending across all of home furnishings,” Jordt said. “Also we are experiencing a real strengthening in demand for hand-knotted construction over tufted. We are very confident that, with our sales force, current hot selling product as well as exciting new hand-knotted looks that will be offered at the 2017 markets — starting with Atlanta in January.”

The upper end of the marketplace has a place for better machine-made goods as well, and King believes the gains Surya realized in the category will continue to bear fruit this year.

“I think we’ll see more advancements in machine-made rugs, which will take the construction to a new level. For example, digital printing techniques are getting better all the time,” he said. “We’re also going to see the use of more high-end materials such as wool and New Zealand wool along with innovations in yarns and fibers and new techniques that bring added depth and texture to machine-made rugs. Consumers are looking to find great style at an affordable price, and machine-made rugs are a great way to meet that need.”

Baker sees e-commerce continuing to be an important place for the rug category, particularly as big box powerhouses such as Walmart (which recently acquired Jet.com) add their muscle to the channel. As such, the Anderson, S.C.-based manufacturer is doing the needed work to capitalize.

“We are investing in new systems, people and infrastructure to help put us in a positive position to capture sales growth,” she said.

Yaraghi believes expressive rugs will continue to be hot sellers for Safavieh in 2017.

“The trends we anticipate — color, color and more color — and in particular, our use of color in creating exciting new looks in timeless designs,” he said.

The trend toward individualization will be big in 2017 according to Chaudhary, and by paying attention to consumer wants and needs, she expects Jaipur Living to post another double-digit growth year.

“We are seeing more than ever the importance of self interpretation and personalization in home décor. The need to deliver more flexible designs for ever-changing lifestyles urges us to think about design and style hand-in-hand with function, performance and quality,” she said. “With this focus in sight, we’ll continue raising the bar both on our casual-timeless looks and luxury styles.”

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