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Rug Execs Predict 2021 Results, Reflect on Top Issues Impacting Industry

RugNews.com speaks with a dozen area rug industry leaders to assess category sales, year-end projections, and the highs and lows of 2021.

Jessica Harlan
11/10/2021
collage of rug, shipping port and showroom building
Area rug executives share expectations for remainder of 2021 and industry challenges they are grappling with.

HIGH POINT, N.C. — As the year 2021 draws to a close, area rug industry insiders took stock of this unusual year. Unlike some industries, the global pandemic provided opportunities for the home furnishings category, as consumers reassessed and reflected on their homes during the months they sheltered in place.

But worldwide events, pandemic-related or not, also meant significant challenged to manufacturers: very few suppliers didn’t experience shipping issues, raw material shortages, or workforce problems. Looking ahead to the year’s end, industry players shared with RugNews.com their thoughts on how the year will finish out, and what some of the highs and lows were of 2021.

“Fantastic!” is how Mike Riley, senior vice president and general manager of Karastan described the year. Numbers-wise, he says the company’s sales were 48 percent ahead of 2020, but since last year, when stores were closed for a good chunk of the year, is not a good comparison, he also notes that the company’s sales are 20 percent over 2019. Riley said that Karastan’s parent company, Mohawk, has put more assets behind the division.

Feizy shared similarly high sales numbers. “We are currently up over 2020 and posting over pre-pandemic numbers by 130 percent,” said Justin Yeck, Feizy’s VP of Omnichannel sales, marketing, product development & design. “We are coming off of an incredibly successful October High Point market posting a 150 percent increase over our pre-pandemic market and 367 percent over 2020.” What’s more, Feizy projects ongoing increases. “We have been incredibly pleased with performance all year, and we expect current outlook to continue to be rosy,” Yeck said.

“We are coming off of an incredibly successful October High Point market posting a 150 percent increase over our pre-pandemic market." -- Justin Yeck, Feizy

Jaunty also reported outstanding sales figures: The company is 32 percent ahead of last year, and Kami Navid said, “This is our best year so far, compared to 2019 and before, which is surprising. If we keep the same pace, we are going to be way ahead of 2019.” He noted that certain states that haven’t had as strict of lockdown policies, such as Florida, are booming in terms of area rug sales, while states that have been under lockdown for longer, like Washington and Oregon, are lagging a little more.

At Kaleen, the company’s sales were up, and Blake Dennard, senior vice president said, “We could have been even better if not for the supply issues.” Dennard said the company’s rug business is up 20 percent and its broadloom business up over 80 percent. “We’re expecting a great quarter and we’ve geared our inventories for it.” He said that currently Kaleen has enough material waiting overseas to fill as many as 18 shipping containers, it’s just a matter of waiting for those to be available. “It’s getting better, and we’re fighting to get our fair share of containers,” he noted.

“We’re expecting a great quarter and we’ve geared our inventories for it.” -- Blake Dennard, Kaleen

Nourison also expects to finish strong, according to Gerard O’Keefe, vice president of sales. While they had challenges with supply chain like everyone else, “Fortunately we’ve been in a good stock position leading into it,” said O’Keefe. The company recently completed a 308,000-square-foot addition to its warehouse, and O’Keefe said this will help with its logistics flow going forward. Strong points from Nourison’s product line in 2021 included the ever-popular Prismatic collection, the Starry Night line, and the company’s c ustom fabricating program. “Those all helped us grow our market share this year,” he said.

Like Nourison, Loloi credits a strong in-stock position for helping the company weather the issues that marked this year. “The way we’re going to finish out, we have twice as much inventory as this time last year,” said John Thompson, vice president of sales Southeast region. “We’re committed to be the premier supplier of in-stock merchandise to our existing and new customers.”

Capel Rugs was still enjoying the afterglow of the success in 2020, which Cameron Capel described as “tremendous”. She says this year has seen a little drop-off in sales but has otherwise been a good year. The biggest challenge has been the supply chain issues that have plagued the industry overall. “The outsized demand compared to what we can actually get, in terms of materials and finished product,” has been frustrating. The company recently shifted its shipping container delivery to ports in Norfolk and Savannah, which has helped a little, although the time and cost savings is offset by the increased drayage over land to reach the Capel warehouses.

Capel has also dealt this year with employee issues, covering for employees who are sick or having to stay home because of contact tracing.” The company has countered these issues with a 7 percent price increase across the board in July, but Capel reported that their customers were understanding. “Not one customer balked,” she said. “They all just said, how much, and when?”

The challenges to cope with rising costs, maintain stable inventory and receive product in a timely manner has also affected hand-knot rug merchants, who also pivoted to find success in 2021. "Keeping a large inventory is a very big plus these days and it has served us very well being able to keep enough selection and variety beyond our exclusive design programs," said Ori Wilbush, founder of S&H Rugs. "Shipments take much longer to receive and there are many delays even with air shipments --what's more freight charges escalating higher and higher on a daily basis."

Wilbush noted that despite these logistic setbacks, the company's designer and retail clients are still hungry for hand-knots. At the recent, High Point Market the company's SAMS booth experienced heavy traffic even before the official opening of the show, he said.

Johnny Nasiri of Unique Loom also reflected on the supply chain issue. “There isn’t much one can do,” he said. “But things are getting better from the bottleneck standpoint.” Despite those deterrents, Unique Loom had a good year, bolstered by an expanded showroom in Dallas and a move towards higher-end products with innovative fibers and more intricate constructions.

Balta, which is establishing its U.S. program under its own name, has gotten above-expectation responses to the company’s trade show debuts in Atlanta and High Point, said Hans Fossez, commercial director. “We’re seeing good responses this year in all categories, including indoor/outdoor, kids, and rugs at different price points. The further growth of our ecommerce business has also been a nice success.”

His company’s main challenge has been the supply chain delays as well as the increased costs of doing business, including historically high raw material costs and shipping container costs.

“We can control some things with an increased focus on forecasting and bringing in the right product at the right time,” he said. “We’re also able to be flexible, shifting production between our facilities as needed.”

Higher production costs also affected Orion/Palmetto Home. “Resin is double what it was before,” said Dave Matamoros, senior vice president of specialty sales. “We’ve become that manufacturer who has reduced SKUs and inventoried the heck out of them, with a depth in options and sizes.” Finally, he says, “10 percent US made is a huge deal,” he noted. As a sign that greets visitors to the Palmetto showroom quips, “American made products don’t get stuck on cargo ships.”

"We’ve become that manufacturer who has reduced SKUs and inventoried the heck out of them, with a depth in options and sizes."  --Dave Matamoros, Orian/Palmetto Living

Meanwhile, Reza Momeni, president, Momeni Rugs, said he feels his company will finish strong. “Fourth quarter historically is a good time,” he said. “And keeping inventory on our shelves has helped us a lot this year.”

The high-end, custom brand Edward Fields has expanded into offering finished rugs for luxury retailers and interior designers under the name Area by Edward Fields. Michael Reagan, senior vice president — Americas, said the highlight of 2021 was a high demand for luxury consumer goods, while the low point was the global shipping prices. “It’s another reason that we want to stock inventory and drop-ship products,” he said.

New Moon has not been as affected by the shipping debacle for this reason; the company ships its goods by air rather than cargo. It’s more expensive, said Josephine Kurtz, principal, but “we haven’t been impacted as much.” The company also predominantly produces its products in Nepal, which hasn’t been affected as much by COVID-related workforce issues.

“Having a small production company, we were able to adapt, and we feel fortunate we were able to keep things moving,” said Kurtz. “We had a lot of custom orders this year, and overall, it’s been a good year.”

Brian VanderWerf, regional vice president of Dalyn, said that strong business conditions and good demand were among the highs of the year, while supply chain issues were the biggest challenge. “But our open order position has been the highest our company has ever had, and we think we’ll end the year with a big fourth quarter finish,” he said. “Those containers will be coming through.”
"Our open order position has been the highest our company has ever had, and we think we’ll end the year with a big fourth quarter finish.” --Brian VanderWerf, Dalyn

Finally, Hersel Bani-Esraili, president of Exquisite Rugs said, “We are ending the year stronger than when we started.” He said people are out shopping more and spending more, which has helped bolster rug sales industry-wide. Notes Bani-Esraili, “We are looking forward to 2022.”
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