FLOORING RETAILERS HOPE FOR FOURTH QUARTER AREA RUG RALLY At Nebraska Furniture Mart, area rugs have been performing well in 018 and David Chambers, director of flooring, expects a strong Q4.

STAFF REPORT -- Flooring retailers increasingly use the phrase "the new normal" to describe the rug business in the specialty retail channel. By "new normal" they mean a roller-coaster market, where one month or one quarter of positive activity does not necessarily carry over to the next. In many cases, these time periods are marked by wild, unpredictable swings.

Given this landscape, retailers like Miriam Thompson, owner of The Rug Rack in Chattanooga, Tennessee, has stopped trying to make sense of it all. "We have adjusted our mindset: now it's do the best we can and be thankful for what we do have," she said.

Flooring dealers across the U.S. point to unpredictable results for rugs in 2018, resulting in a less than stellar year for most, albeit with still time for a course correction.

Gerry Yost, Avalon Flooring

"The best way to describe the rug business is mercurial," said Gerry Yost, director - area rugs and window treatments, Cherry Hill, New Jersey.-based Avalon Flooring, with 14 locations in New Jersey, Pennsylvania and Delaware.

Yost said that year-to-date Avalon's area rug business has been flat. To stir up business in the critical fourth quarter, Avalon is introducing a few vendor-specific promotions that it hopes will drive traffic into the stores. Yost said he is still hopeful that the final three months will provide a much-needed boost to an otherwise uneven year.

Sam Presnell, The Rug Gallery

Other seasoned retail veterans say they are perplexed by what they have seen in 2018, with Sam Presnell, owner of The Rug Gallery in Cincinnati, using words like "disappointing" and "confusing" to describe his business. "I told you at the beginning of the year if this wasn't a good year I'd eat my hat. Well, can you supply a little salt," Presnell quipped. "We are off from last year mostly because of June's numbers. I have no explanation for you, it was just bad. We have had four months at goal and four under goal. As of today, September will not meet goal either. I am hopeful for a strong fall. We are hitting it hard on all fronts and feel good with our marketing plans."

On a bright note, The Rug Gallery has gotten positive feedback from its digital traffic, which Presnell said "has been off the charts," driven by a mix of Facebook ads and digital marketing programs that target zip codes, age, income and home values. Consumers are directed to the store's website landing page and from there to products that The Rug Gallery is advertising.

THE RUG RACK & HOME DECOR

Miriam Thompson, The Rug Rack & Home Decor

Like many retail owners, The Rug Rack's Thompson was hoping the new tax law implemented at the end of 2017 would prompt consumers to spend more in 2018. "Maybe that extra money went to an extended vacation or multiple vacations," she said. "Hopefully that was the reason for the low percentage of walk-in traffic and not just being plain-ol' disinterested in rugs and decorating in general."

Thompson isn't giving up as she looks to entice her customers with a slew of Facebook promotions, including the True Blue Sale, which offered 20 percent off all in-stock rugs with any blue in them. The encouraging news is that, beginning in mid-September, The Rug Rack & Home Decor witnessed an uptick in traffic and higher ticket invoices. "Our consumers are educated with a sense of style and quality and are not looking for the bottom of the barrel price point and quality which is what so many manufacturers are trying to serve," Thompson said.

The Rug Rack is offering a True Blue sale with a 20% discount on any rug with blue in the palette.

"With the continued growth in building and remodeling we are optimistic that 2018 will finish close to 2017. A new digital advertising platform is already in place along with a new neighbor magazine in two of the most sought-after locations in our area. Our fall sale started Oct. 1st with a holiday sale around the corner. We are gearing up for a positive last quarter to finish strong."

Thompson added that, while not a surprise, the difference in this year's numbers to last year's is a significant decrease. "We are keeping in mind that we saw tremendous growth in 2017, with two major projects. I did go on record to say that the smallest increase to last year would be an acceptable number [for 2018] due to the growth of 2017."

O'Krent Floors in Texas

David Chambers, Nebraska Furniture Mart

While some retailers bemoan the up and down nature of the rug business, there are some that consistently turn in solid results. That list includes Nebraska Furniture Mart. "Overall, our rug business is doing very well this year showing a nice increase over last year," said David Chambers, director of flooring for the Omaha, Nebraska-based retail giant with three locations.

"We have definitely seen a shift in business to machine-made rugs, but our hand-knotted rugs are still performing as well. We expect our rug business to be strong in the fourth quarter. In advance of that, we have spent a lot of time planning our advertising and web strategy and feel very confident going in that our rug business, which has performed well all year, will continue to do so."

At Nebraska Furniture Mart, cowhide and sheepskin rugs are ready for holiday selling.