By Jennifer Quail
Exhibitors this week in Las Vegas are faced with two extreme realities of retail business they have become rather accustomed to in recent quarters: Everyone wants and needs new product to stay competitive, but few have the bankroll to support that game plan.
There are the questions of the state of the dollar, the cost of raw materials, the pending presidential election and far-from-empty retail inventories, to name just a few, coming up with every business transaction. But, in order to survive, there is no choice but to plow ahead.
“The U.S. dollar is continuously losing its ground against all major currencies, which is causing a lot of price increases,” said Hari Tummala, vice president at Kas Rugs. “If the new administration can address and fix these issues, it certainly will really help business in 2008 and beyond.”
“I think everyone is facing price increases this year,” added Wendy Reiss, key account manager at Kas Rugs. “Our dollar is so weak and the costs of raw materials from overseas is rising. I can understand a focus on exports, but our import process should not suffer as it currently is. Hopefully, our dollar will strengthen.”
As always for this business, be it a raw material for a synthetic rug or fuel for freight, the price of oil weighs heavily on the industry. “When the price of oil goes down, this will give the majority of the people the disposable income they once had to maybe buy a rug or two,” said Steve Mazarakis, president and chief executive officer of Hellenic Rug Imports. “The effect would be immediate.”
To balance such challenges, vendors are devising plans to ease the pressure on retailers. Many have ramped up their merchandising and marketing efforts to aid retailers, and others are looking straight to financing for a solution. Abbyson, for example, will introduce this week a financing program that will allow its customers access to GE Capital’s financing assistance. Others, such as Jaunty, have taken a stance against discount Web sites to preserve business for the traditional brick-and-mortar stores.
“The Internet discount Web sites, combined, reported home furnishing sales as an increase of 30.3 percent in 2007 over 2006,” said Mac McCormick, senior vice president at Jaunty. “This while furniture and flooring stores are struggling for business to even meet last year’s sales.”
“The question is: OK, the economy is bad, but what can we do to help business and still have a good year in 2008?” said Yavar Rafieha, vice president of Abbyson. “If you ask the other question, then you’re going to end up filing for bankruptcy.”
Despite such concerns, there is excitement for the Las Vegas Market and the West Coast doors it continues to open for many vendors. And the buzz has begun already for the July market and the opening of Building C, which will house many rug vendors showing here in permanent space for the first time, plus expanded showrooms for others who were involved in either of the first two buildings.
Abbyson, for example, is taking a big leap and opening a 10,000-square-foot showroom, complete with a restaurant, in Building C. To prepare for what will be a full launch of the brand, the company is introducing attendees at this market to the Abbyson Living umbrella, which consists of a variety of home furnishing products from Europe. Among the products that will introduce the concept for the company this week are marble tables and a new roster of contemporary rug designs. Rafieha said the contemporary designs are both a reflection of what has been in demand for the company and of its new European direction.
Contemporary design is, in fact, a driving factor for many here this week as the left coast continues to be a bit more daring in its interior design. New collections are showing emerging trends in livable opulence; bright, juicy hues; and a hefty dose of icy pastels, particularly blues and greens.