Issue Date: 2018 JUNE, Posted On: 6/14/2018

06142018 Rugs 2018 - First Half Review - Dealers Optimistic about Area Rugs Despite Uneven Sales in Q1 and Q2
By RugNews.com Staff

SPECIAL REPORT -- Flooring retailers turned in a mixed report card for area rug sales in the first five months of 2018; however, May activity has brought optimism. In fact, despite the uneven nature of business to date, most dealers are satisfied and see potential for greater growth.

Dealers from a range of stores were queried by RugNews.com for this market snapshot -- from rug specialists with broadloom and hard surface components, to flooring dealers and furniture stores with rug departments of varying sizes.
With five full months of sales under their belts, retailers also have a handle on what's resonating with consumers in their regions, and share best-sellers and trending designs by brand and style category. Not surprising: cut and sew rugs from broadloom, abstract motifs, machine-mades and updated Persians are among the winners. 

David Snedeker - Nebraska Furniture Mart
The high marker among the group was Nebraska Furniture Mart, with three stores, which reported "robust sales" with increases in excess of 5 percent. "Hard surface sales increases seem to be the biggest contributing factor to the growth," said Dave Snedeker, divisional merchandise manager-flooring. "Obviously with the increases in machine-made [rugs], affordability is also a contributor."

Following is a roundup of how other dealers fared:

Phil Koufidakis, Baker Bros.
Baker Bros., with seven locations in the Phoenix market, saw rug sales drop a few percentage points in 2018, albeit with an explanation. "Strategically we are intentionally reducing our SKU count and changing our mix, so this is something we expected," said Phil Koufidakis, president. "We have been lowering pricing and using rug giveaways promotionally to move out aged inventory, so that also accounts for that."

Steve Weisberg, Crest Flooring
Crest Flooring in Allentown, Pennsylvania, continues to use promotional sales and other incentives to drive business effectively, as area rug sales are a bit ahead of last year, said Steve Weisberg, president. "We created an incentive program where we mail customers who purchased $1,500 or more of any hard surface a coupon worth $100 towards an area rug. These days everyone and their brother sells rugs -- supermarkets, box stores, Walmart, Costco, etc. We had to do something to incentivize our customers to come to us."

Margie O'Krent, O'Krent Abbey Floors
O'Krent Abbey Floors in San Antonio enjoyed a solid first half in all segments except area rugs, according to Margie O'Krent, rug buyer.  "Rugs are the only category in which we are slightly down year to date, which we assume is due to stiffer competition from online sales; as a result, it has caused us to get more creative and offer more flash sales to generate area rug business." O'Krent's has successfully promoted its flash sales on its LED digital billboard, tying promotions with specific holidays. 

Miriam Thompson, The Rug Rack
The Rug Rack in Chattanooga, Tenn., is lagging 12% behind 2017 at this juncture, however co-owner Miriam Thompson is not pushing the panic button as 2017 was a banner year for The Rug Rack, with sales up 20%. 

Thompson is confident 2018 will turn out fine as well. "There were a couple of special projects last year during the first quarter that affected sales in a great way. I am still very happy with the way business is going as we have a few projects on the drawing board to push us even with last year by the end of May. There is considerable building taking place in our area. People are moving into the Chattanooga area on a daily basis it seems. We are also seeing our customers spending more money to purchase a better-quality product. Our hand knotted sales are up from last year. We attribute all of this to confidence in the economy."

Sam Presnell, The Rug Gallery
The Rug Gallery in Cincinnati is slightly ahead of last year's pace, according to Sam Presnell, president, who nonetheless said he was expecting a better start to 2018. "We had a bad start in April and lost quite a bit of sales," he said. "Not sure why but probably a combination of spring break, Easter, taxes due and long winter weather. But May has been strong to date." 
Gerry Yost, Avalon Flooring
Add Cherry Hill, New Jersey-based Avalon Flooring to the list of flooring dealers who are seeing a surge in rug sales of late. After a slow start to 2018, business, for the chain's 14 locations in three Mid-Atlantic states, has turned around, said Gerry Yost, director-area rugs and window treatment. "With more and more hard surface flooring being installed, the need for area rugs has grown. Customers are realizing that area rugs are a great addition to a room to soften the area and complete the look. Not to mention the need to deaden the sound and warm a cold floor."
Yost said Avalon is roughly even with last year in sales volume; but is in the midst of an upswing with rugs. 
Dealers Reveal Trending Designs, Top Sellers
Oriental Weavers' Evolution collection was mentioned by dealers as a consumer favorite for its combination of high fashion and performance.
The custom rug business continues to be a revenue stream for flooring dealers, especially in larger sizes such as 10 x 14 feet or 12 x 15. 

Traditional is another healthy segment, retailers say, including spin offs to the traditional designs that are appealing. "The classics in lighter colors are in demand, and neutrals are still a mainstay," The Rug Rack's Thompson said.  
Classic designs updated in pattern with lighter and neutral colors are popular in all regions. Shown, Karastan's Adare.
O'Krent said geometrical collections that put a modern twist on old world designs -- like Oriental Weavers' Marrakesh, Henderson and Nomad collections -- have been very popular in the Southwest market.
Above and below: Global tribal motifs from Oriental Weavers complementing southwestern style interiors are selling well at O'Krent's in San Antonio, with lines like Marrakesh (above) and Nomad (below) among top sellers. 
O'Krent's has also reported increased demand for abstract and bright designs, and a great response to collections like Nourison's Prismatic and Celestial. Prismatic was also a winner at The Rug Gallery in the first half, with Sam Presnell describing it as "a high quality tuft with Tibetan styling and bright colors".  
Abstracts such as Nourison's Prismatic (above) and Celestial (below) were cited by both O'Krent's and The Rug Gallery as hits with customers. 
Also trending at The Rug Gallery were the Easton collection by Couristan, a face-to-face Wilton, and Nourison's Chroma - both described by Presnell as "machine-made rugs with a lot of looks for the money -- a good value. I hate that these rugs look this good at this low price," he said. "I can't keep them in stock."
Easton by Couristan (above) and Chroma (below) from Nourison are hot sellers at The Rug Gallery for their combination of value and style.

Other retailers referenced Karastan's Titanium, a best-selling wool; and Oriental Weavers' Evolution and Atlas nylon rugs for their high-end styling and colors.
High styling in nylon scored with consumers in the Atlas collection by Oriental Weavers (above) while Titanium by Karastan (below) was big with wool customers.  

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