By Jennifer Quail
NEW YORK–It should come as no surprise to anyone in the floor covering industry to see numbers that were flat for the year. The very fact they didn’t turn out worse should bring a collective sigh of relief.
Topics such as the presidential election, the price of oil and the housing market topped the list of culprits contributing to the slow market of the past year and its expected continuance for at least another few quarters.
Sources said the higher end of the business has not really been affected by the troubled economy. Those who deal in hand-knotted and one-of-a-kinds said that business has been quite good.
In the same respect, product at the opening-price-point level stayed about even last year. It’s all the product in between that is feeling the turbulence—the hand-tufted and the midpriced machine-made product that now bears very similar pricing thanks to record high prices for oil.
“Things as simple as gas prices really do have an input on people’s psyche,” said Austin Craley, vice president of sales for Momeni. “People don’t have that disposable income, plus there is its effect on freight and raw materials for polypropelene.”
In accent rugs, the business last year continued to feel the benefit of seasonal changes in theme and impulse buying due to the lower costs of the products. But the constant updating adds a level of stress, according to those in the business.
“In my view, the biggest challenge to manufacturers in this category is the never-ending need to present fresh, new designs that are on trend while keeping the price point to the consumer low,” said one executive in the accent rug business. “The accent rug market is rapidly becoming a fashion-forward business and, as such, must march to a much faster drummer than traditional bath or area rugs.”
And in the washable rug category, quality over time has become increasingly important as companies focus on the importance of consumer satisfaction and loyalty when their dollars are more precious. “Quality of washable rugs is the biggest concern,” said one executive. “Does the rug really wash well? How does it look after it has been washed? Can the consumer wash the rug in their home machine? How many times can it be washed?”
The broadloom market has also seen fair weather for the higher end of the market.
“The residential market is pretty flat, but the commercial business is going crazy; hospitality as well,” said Jim Cody, vice president of sales for Bloomsburg Carpet. “After 9/11, the commercial market stopped and that was when the residential market went crazy. Now it’s the reverse. Next year should be pretty flat to a little up in residential and up in commercial and hospitality.”
Even with the acknowledgement they are likely facing another flat year ahead, knowing they have survived similar economic cycles in the past is keeping the industry relatively positive and even defiant.
“We have decided if the country does go into a recession, we will not participate,” said Oriental Weavers USA President Mike Reilly.