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Business

Rug Execs Report Many Pandemic Strategies Here to Stay

From increased backup inventory to upgraded websites and flexible work scenarios, area rug industry players report many of the strategies used to survive the COVID pandemic will be here to stay.

Jessica Harlan
6/21/2021
exterior of show building with rug showroom ads
High Point Market's postponed spring 2021 event experienced the strongest buyer turnout since the COVID pandemic kicked off. Shown, Showplace entry
Photo by @hilary_farr

HIGH POINT, N.C. -- There’s no disputing the fact that the year 2020 changed the world forever as people did their best to survive the COVID-19 pandemic both personally and professionally. In the rug industry, executives found new ways to run their companies and to lead their teams through the tumultuous time. In many cases, what was meant to be a stopgap measure, was quickly discovered to be a better way of doing business.

RugNews.com surveyed industry leaders as the nationwide crisis winds down to learn how some of the top area rug companies pivoted during the pandemic, and how it forever changed their businesses … in many cases, for the better. From a logistics standpoint, many rug manufacturers quickly discovered that maintaining strong inventory levels helped them satisfy what turned out to be a nearly insatiable demand for home furnishings. As people across the country were stuck in their homes, redecorating and renovation projects got pushed to the top of the to-do list, and many retailers had trouble filling orders for area rugs, furniture, and other home goods.

RETAINING STRONG STOCK POSITIONS

At Nourison, high backup inventory levels had always been maintained— much to the consternation of the company’s accountants who often consider that risky, said Alex Peykar, president, who noted that to meet the increased demand for product, Nourison will more than double its Georgia facility by the end of Q2 2021 to allow it to process and maintain more product. “But during the pandemic, our strong inventory position paid off and made us heroes while other companies were cancelling orders. Our service did not suffer.”

But Nourison, too, is starting to feel the pressure that other manufacturers are feeling, particularly with regard to the delays in getting containers shipped from overseas, and the increased cost of shipping and production. “We’ve absorbed as much as we could, and we’ve tried to put procedures in place to reduce costs to our customers, such as expediting direct shipping to consumers, as well as orders to retailers and e-commerce businesses.”

"Our strong inventory position paid off and made us heroes while other companies were cancelling orders. Our service did not suffer.” -- Alex Peykar, President, Nourison

Early on in the pandemic, “the major thing we got from the feedback from our customers, was a desperate need for inventory,” said Xandy Lundberg, inside sales supervisor for Surya. “While the world stopped, our business didn’t stop. And a lot of [area rug company’s] production was thrown into shambles.” Lundberg says Surya president Satya Tiwari was savvy about how he approached purchasing and production even in the uncertainty of the pandemic’s early days. “Surya didn’t stop vendor production, so we always had product to ship and had inventory levels for designers and retailers.” Ensuring a strong in-stock position, said Lundberg, will continue to be an important practice for the company.

"While the world stopped, our business didn’t. Surya didn’t stop vendor production, so we always had product to ship and had inventory levels for designers and retailers.” -- Xandy Lundberg, inside sales supervisor, Surya

Feizy, which enhanced its website in 2020, also, found success in maintaining inventory quantities and continuing to develop new product. “We had great in-stock rates, and we also continued to focus on product development and design,” said Justin Yeck, vice president of omni channel sales, marketing, and product development and design. He said that with its own production facility in Turkey and strong relationships with its clients, “we stayed insulated as a whole.”

At Capel, where about half of its products are domestically produced, the company’s product development team hedged its bets early in the pandemic and bought more fiber than it usually does, in advance. This proved to be a prescient move as so many manufacturers struggled with getting what they needed to produce their products.

Other companies found that honing in on the most successful products, was another way to stay profitable. Case in point is Palmetto Home, which reduced more than 50 percent of its SKU base. “Heading into uncertainty, you have to be as nimble as you can be,” said Dave Matamoros, senior vice president of specialty sales. “We reduced as much overhead as possible, without reducing our ability to sell.” The strategy worked: the company ended up having a profitable 2020, and Matamoros says that in the future, Palmetto Home is likely to remain judicious with product launches and what collections will be produced. “We’ll continue to maintain just the right introductions, the right things the market is calling for,” he says.

"We reduced as much overhead as possible, without reducing our ability to sell. We’ll continue to maintain just the right introductions." -- Dave Matamoros, senior vice president of specialty sales, Palmetto Home

At Kaleen Rugs, the company had also had the foresight to ramp up its inventory before the pandemic had too much of an effect on production and shipping. In fact, it completed a massive expansion of one of its Indian production facilities in April 2021, which proved a serendipitous boon to Kaleen. So while the company also learned to be cautious about launching products too early, particularly when it has been taking longer to get new items produced, it now has the added capacity to produce more product quickly. “When people come in to the shows now, they’re ready to buy,” said Brian Brigham, director of marketing and public relations. “We’ve learned to wait to announce new products until it’s closer to being in stock.”

“We’ve learned to wait to announce new products until it’s closer to being in stock.” Brian Brigham, director of marketing, Kaleen

REFINING ONLINE EXPERIENCE

For so many companies, going digital and virtual proved to be a solution for keeping in touch with clients when sales trips and trade shows just weren’t safe. “We quickly learned that you can do business even without a market,” said Matt Peterson, trade show manager for Jaipur Living. “We put all our catalogs online and started making monthly launches instead of just seasonally.” The sales team started reaching customers with email blasts and frequent social media posts, and with new products debuting constantly, there was always something fresh to talk about. Jaipur also worked on improving its website, and even though trade shows are moving forward again the company continues to offer a virtual showroom in the form of a video tour with active links, for those who still aren’t ready to travel.

Palmetto Home also used video technology to host a virtual market this past January, a Zoom call with 24 of its major customers. And going forward, the company narrowed down the number of markets it will attend to Las Vegas and High Point. “We were trending toward that anyway,” Matamoros explained. “The pandemic just helped us see that more clearly.”

“We were trending toward [fewer industry markets] -- The pandemic just helped us see that more clearly.”-- Dave Matamoros, senior vice president of specialty sales, Palmetto Home

Nourison also got creative with its virtual marketing and connections. For instance, the company set up a camera on a rolling platform that salespeople could use to tour their customers around their New Jersey showroom, it could even zoom in close enough to show the texture of a rug. Feizy, too, pivoted from field sales to virtual meetings with clients. And to replicate the “touch and feel” quotient that customers get at in-person markets, the company would ship product samples to clients so they could feel the texture and quality of various constructions.

“I’ll still be Zooming for a while,” noted Cameron Capel, president - sales and marketing of Capel Rugs. “A lot of our large accounts are not going back [to traveling] until 2022. And we have realized we don’t always have to get on a plane and get face-to-face.” The Capel sales team realized that video calls have also become handy to efficiently address certain issues or answer questions, faster than a back-and-forth email exchange or a conference call. “You can get on a Zoom call and hold up a couple of samples,” said Capel.

“I’ll still be Zooming for a while. A lot of our large accounts are not going back [to traveling] until 2022." -- Cameron Capel, president, sales and marketing, Capel Rugs

One thing that paid off for Art Resources was that every single product the company makes was already online on its website. The company maintains a second website, which also shows the its entire inventory, as a tool for its retail and design customers. “During COVID, they could use the site as a virtual catalog to access 15,000 pieces, for their customers to shop,” said Max Mousavi, spokesperson.

And at Loloi, the company found that improving some of the descriptive copy on its website and marketing materials was a much-needed improvement. “Our descriptions are better than they ever were,” said Austin Craley, vice president of sales. “Clearer language, more expressive, it was a necessary change to replace that tactile sense folks missed out on when they weren’t able to visit showrooms in person."

"Clearer language, more expressive, it was a necessary change to replace that tactile sense folks missed out on." -- Austin Craley, VP sales, Loloi

FLEXIBLE WORKPLACES

Finally, as with every other workplace, the rug industry had to navigate how its employees could maintain productivity during the pandemic. “We were able to take a more flexible approach with our employees,” said Steven Hoberman, vice president of business development for Trans-Ocean by designer Liora Manne. “Everyone had individual challenges, but we were able to get them all set up remotely and to bring tech up to date when needed.”

That flexibility has carried through, and Hoberman says that as everyone becomes more efficient at working remotely, they’ve been able to keep a lot of the flexibility in place. Even the factories that Trans-Ocean works with are becoming a little more adaptable. “It used to be that development was on a very rigid schedule,” says Hoberman. “But now it’s fine to do things as they develop.”

 “It used to be that development was on a very rigid schedule. But now it’s fine to do things as they develop.” -- Steven Hoberman, vice president of business development for Trans-Ocean

At Momeni, which updated its website during the pandemic, the executive team also found that they can be more flexible with employees. “Lesson learned: technology works,” said Reza Momeni, president. “We were so fortunate that the technology is here, as far as a remote work environment is concerned. We’ll continue to be flexible and work at home more often. It actually helped people work more hours, and [High Point Market] was the largest introduction we’ve had in past years.”

“Lesson learned: technology works.” -- Reza Momeni, founder, Momeni

Harounian Rugs International (HRI), which despite the uncertainty surrounding the industry in 2020, expanded its sales force and discovered that the pandemic brought its staff together in unexpected ways, and as a result, the company has become far more communicative. “We religiously did weekly updates every Monday, going over ETA issues, openings and closings,” said Greg Jordt, executive vice president, sales and marketing. “We learned to communicate constantly with everyone as we learned information."

What's more despite the low market attendance last year, the company found success using a far more robust digital strategy. "We got it done last year without markets," Jordt noted. "Our sales force has been fantastic in creating new and innovative ways tailored to work with their existing accounts, as well as potential new accounts in their territories." HRI relied on special e-blasts, virtual showroom tours, individual Zoom presentations, and advertising to grow the business in 2020.

“We religiously did weekly updates every Monday, going over ETA issues, openings and closings. We learned to communicate constantly with everyone as we learned information." -- Greg Jordt, executive vice president, sales and marketing, HRI

That kind of responsive approach and an ability to shift strategies quickly proved the key to success at major area rug vendors, many of which, despite the tumultuous past 18-months came out of the crisis stronger.

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