By Jennifer Quail
ATLANTA–It’s a relatively safe bet the vast majority of business meetings this week at the Atlanta International Area Rug Market will include lengthy chats about the economy overall and its potential for turnaround.
The housing and foreclosure markets, as well as the seemingly endless rise of the price of oil and its multifold effect on this industry via raw materials, freight cost and, at the most immediate level, escalating plane fares putting a kink in market travel will be echoed in every hall. To make the most of the opportunity at hand, many area rug showrooms are planning to open their doors a few days earlier to take advantage of crossover traffic from the gift market happening in the days leading up to the rug market.
Still, most executives agreed the current economy, coupled with traditional summer market attendance, would likely translate to a slower-than-usual market. They added, however, that didn’t mean business was disappearing, just changing, and they are working to change with it.
“The Atlanta summer market has always been a good show for us,” said Austin Craley, vice president of sales for Momeni. “We don’t see large quantities of buyers like in January, but we do see some very important, quality buyers who we have time to thoroughly review business with. They are some of our most important meetings of the year. We review what is working and what needs to be changed, and have the entire line right there to review with their team, including some of their management members that now have the time to understand the details of the business.”
The trend for some time has been retailers sending smaller crews to handle market duty and that continues, as does the practice of nailing down time with those buyers prior to show time. Executives said while they’ll naturally accommodate anyone who finds their way to the showroom, at markets in general today, a thorough, pre-planned schedule is key.
“We definitely don’t bank on walk-by traffic to make our show,” said Seth King, vice president of business development at Surya. “We need appointments to make it successful. Attendance will be a little less, but we are not seeing a dramatic drop in appointments.”
The mood of those meetings remains to be seen. Expectations are for even tighter budgets, but still coupled with open minds searching for ways to stand out in the crowd and keep business rolling.
Asha Chaudhary, president of Jaipur Rugs, was among those who acknowledged “as the buying power of our clients becomes more restricted, our clients will buy less, but buy more shrewdly.”
“Value-driven product is front and center this market,” said Amir Loloi, president of Loloi Rugs. “During these tough times, we are finding that the buyers are relying on this value-driven pricing more and more.”
Companies are indeed finding ways to boost their standing with their retail customers. In many cases, that means developing coordinated programs or extensive offerings in the way of merchandising materials.
Surya, for one, is launching a coordinated vignette program for retailers and offering coordinated point-of-purchase tags that include the company’s pillows, throws and wall art. The idea, King said, is to aid the retailer in achieving add-on sales.
Kaleen will be tying in a retailer “Savannah Tour and visit with Paula Deen,” said Joe Barkley, executive vice president for the company. The promotion is scheduled for the fall and will coincide with Kaleen’s annual sales incentive contest for its sales associates.
Shaw Living is launching a holiday assortment and also addressing consumer demand for affordable and green products with two new collections, one an opening-price-point olefin and the second, a recyclable/green nylon.
Kim Barta, brand manager for Shaw, said it’s the company’s way of “meeting the consumer’s need for spending less or spending a little more and getting an environmentally friendly product. Both are hot topics.”
For these and more programs and products debuting this week, the stress is on finding ways to help retail partners generate the greatest possible sales while purse strings are still tight.
“Even though we know our retailers are suffering as less people walk through their doors each day, we also know if we all work together, we can figure out ways to maximize their business for them and help them succeed, even in tougher times,” Craley said.
Perhaps a positive sign, the economy has been trending down for long enough that executives have begun pointing to the inevitable turnaround as being in the relatively near future. Loloi said he expects “a positive turnaround for the entire home furnishings industry by the end of this year.”
Jaipur’s Chaudhary is expecting the American consumer to begin to come around after the elections this fall as well, with a full turnaround of the overall economy by fall of 2009.
Others noted that the fall season holds positive prospects, even beyond the election.
“We expect to see a turnaround sometime in the fall when consumers start to stay inside longer, when the weather is cooler and outside activities subside,” said Lynne Minchello, marketing manager for CMI. “We expect that the first purchase consumers will make when the economy turns around is for their home—the place where they feel comfort.”
“America is a resilient country with tremendous energy, filled with gifted people,” Barkley said. “This challenging business environment will too pass.”