By Lissa Wyman

EDISON, NJ -- In its four short years in business, Due Process Stable Trading Co has made a major transformation from a one-of-a-kind hand-knot specialist to a multi-tiered home furnishings company with wholesale, to-the-trade and retail divisions.

In late 2007, the wholesale rug division moved to an ultra-modern 43,000 sq. ft. distribution center in Edison, NJ.  The Port of Newark, NJ, one of the nation's largest, is only a few miles away.

David Grasse, president of Due Process, along with financial partners,  founded the company during the high-flying days of 2004.

Grasse was given the freedom to pursue his vision of a high-end home furnishings specialist which utilized the sophisticated inventory control systems  and aggressive product development usually associated with mass market companies. In the past year, that vision has become a reality.

Back in the early days, Due Process sold one of a kind rugs and antique and reproduction furniture from picturesque stables on the grounds of a prestigious golf resort in Colt's Neck, NJ. The Colt's Neck facility still houses the back-office operations as well as the  one-of-a-kind and to-the-trade business. The company's retail division is also headquartered in Colt's Neck.

In the past two years, Due Process has also become a home furnishings retailer. The stores operate under the name of Nevada Exchange Trading Post Outlet. Currently there is a  7,000 sq. ft. store in Shrewsbury, NJ and a 2,000 sq. ft. boutique in Red Bank, NJ. 

Grasse admits that the retail and to-the-trade business in the last half of 2008 has been challenging, but the programmed wholesale business is showing double-digit increases.

"For the near term, we want to be as lean and mean as possible," he said. "By late 2009, when business is again on the upswing, we are prepared to be in a position of growth for quality rugs and broadloom carpeting and deeper penetration of the high end furnishings business," Grasse predicted.

Grasse said that in a weak market, wholesalers with good stocking positions have a distinct advantage. "Retailers and to-the-trade showrooms are watching their inventory levels closely.They prefer to use the stock of an established wholesaler," he pointed out.

During the past year, Due Process has developed a sophisticated sampling system, offering retailers a low-cost way to show hand knotted rugs using small 27 x 48- inch or 24 x 24-inch  samples instead of investing in costly full-size rugs.

"Making a large handmade rug is a major investment of time as well as the cost of inventory," said Grasse.  "Using small samples allows retailers to show many hand knotted rug designs and colors at a relatively modest course. The retailer can service the consumer from our stock or offer the consumer a customized rug in terms of color, size and shape. It offers a lot of flexibility and opportunity."

Due Process has recently entered into a joint venture  with Kravet Carpet.  for the manufacturing, marketing and distribution of the new Kravet Tufts collection of  hand-tufted rugs, which will retail at approximately $2,000 for
 6 x 9 size.

The comprehensive line will be introduced at the Atlanta Winter Rug Market. "We are delighted with our relationship with Kravet. It offers us deeper involvement with the design community and also introduces Kravet to the wholesale side of the rug business. We look forward to exploring new avenues of growth with Kravet over the coming years," said Grasse.

In Atlanta,  the Due Process showroom (3-A-5) will be open on an appointment-only basis. "With our new sampling system, we will be able to show our entire line of rugs for the first time. We will show all 450 of our sku's but we are dealing with limited space of 1,200 sq. ft. We don't want people bumping into each other," Grasse said in explaining the appointment-only policy.

The policy also underscores Due Process's limited distribution policy. "We want to protect our retail partners. We have to be discrete about how we display the line. We don't want to over-expose it," said Grasse.

In the future, Due Process will also be exploring new business relationships in both the home furnishings and floor coverings categories.

For the past three years, Due Process has been in a strategic partnership with Arthur Brett, the ultra high end UK-based furniture maker. "We will become more deeply involved as the US marketing arm of Arthur Brett line in the coming year," said Grasse.

David Grasse, left, president, and Mike Massman, vice president, with one of the company's small-sample merchandising units.

Grasse spends much of his time developing new products and managing operations for the wholesale business.  Michael D. Massman, who  joined the company in 2005, is vice president of national sales. Aaron D. Ward is vice president of sales and  Duane C. Henderson is the resident northeast sales specialist.

Executive vice president Greg Bereza, who joined the company in 2004, is headquartered in Colt's Neck and is in charge of the retail and to-the-trade segments of the business.

One-of-a-kind rugs, to-the-trade products, occasional furniture, lighting fixtures and original oil paintings are stocked in Colt's Neck. Programmed rugs are stocked at the distribution center in Edison, NJ.

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