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Outdoor rug category success continues

Business driven by marketing for indoor use, versatility and styling of product

Capel’s Creative ConceptsCapel’s Creative Concepts outdoor rug program allows for extensive customization options, including eight body options and 100 border choices.
The outdoor rug category is one that has vendors excited. More and more companies are getting in on the game, and retailers and consumers are getting on board now that they are coming to realize the versatility that comes with these products.
     Not only are people investing in updating their outdoor living areas and converting them into "outdoor rooms," the stain- and wear-resistance of these rugs make them very attractive as indoor rugs as well, especially as technological advances and fresh designs make them, in many cases, indistinguishable from traditional indoor-only rugs.
     "The indoor/outdoor is the fastest growing segment of our business," said Aaron Gray, director of marketing for Oriental Weavers. "Outdoor entertaining at home is becoming more popular. We are accessorizing outdoors just like we do indoors. The patio is becoming another room for the home."
     "We have seen a lot of growth ourselves in the indoor/outdoor category," said Surya President Satya Tiwari. "I think one thing a lot of people still haven't realized is that a lot of indoor/outdoor actually gets used indoor now. So yes, it's indoor/outdoor collection, but people don't care. They want to buy a product that's good value, easy to clean and looks good. We've been focusing on educating our customers who are looking for easy to clean, high durability traits on why they can take that indoor/outdoor rug inside."
     Allen Robertson, vice president of sales at Capel, said his company has 10 outdoor rug collections, comprising 300 to 400 SKUs. The braids in the line are produced domestically at the company's home base, Troy, N.C., and other pieces are created at its Dalton, Ga., facility. There are also imported rugs in the outdoor- friendly lineup.
     The highlight of Capel's indoor/outdoor offerings is its Creative Concepts Collection, a custom program that the company has offered for a few years. Eight olefin options are available to create the body of the rug - in various textures of cream, beige, taupe and brown tones. Twenty-one standard size options are available, though custom sizes can also be requested. Finally, more than 100 fade-resistant fabrics are available to create the borders. Customers can elect a single, double or triple border in a variety of widths, or they can use their own fabric to create their own look.
     This line appeals to interior designers, Robertson said, because the level of customization is so precise. "It's definitely still a growing business for us," he said.
     Tami Watras, Capel's creative director and VP of product, said 70% of outdoor rugs are being used indoors, because of their great resistance to soil and stain. They are popular in busy rooms like dens and kitchens, but also in formal dining rooms because spills don't harm them.
     Wendy Reiss, VP of key accounts for KAS Rugs, said though her company got to the outdoor rug category later than some of her competitors, it's definitely a growing business.
     "It is growing - it's something that maybe we were a little late to - because we felt like it was something that had a negative connotation. So before we jumped into the me-too bandwagon, we wanted to look at how we could be different and unusual and help our customers," she said.
KAS’s Fairfax rugKAS’s Fairfax rug in Charcoal Filigree is an indoor/ outdoor braid and hook combination weave, made of 100% UV-treated polypropelene, available in five sizes ($289, 5x8).

     While she said it's not a huge segment of her company's business, "what I do see that's happening with it - as we call it ‘relaxed living' or ‘casual living' product, we find that it is now going into programs not only to be used outside, but inside too. It's becoming a good category because of that."
     KAS offers three collections - a good, better, best strategy, starting with flat-weaves around $129, mid-priced braid-hooks and multi-texture designs at the higher end, targeting a $299 price point.
     "By continuing to market this as more easy and relaxed living, I think the category will continue to grow," she said. "I think people are afraid of the term indoor/outdoor. ... But with more and more busy families and working parents, you want product that's easy to take care of."
     Safavieh's Arash Yaraghi said his company was an early pioneer in this category, and it continues to grow and sell well.
     "Safavieh is one of the original companies that started the revolution of indoor/outdoor rugs, and we are expanding our line continually with new weaves, and qualities including handmade and machine-made," he said. "We believe that the sector will continue to grow if we continue pushing the envelope with design and technology that result in fashionable products that people would want inside their homes, but with all the advantages of cleanability and easy care of outdoor."

CONSTRUCTION AND MATERIALS

At Mad Mats, Mariachi Imports' outdoor rug division, the line is exclusively outdoor product, according to Amy Kimmich, president.
     Mad Mats are made from UV-protected 100% recycled plastic, which is both a selling point and something that can hold customers back. "This is a really thin inexpensive plastic mat, and yet if you can address the things that make it seem like that and make it feel like that, then you've got a bang-up product because it's so practical and it's so much fun and it's so reversible," she said. "So that's what we've done. We've attacked all the points that people have issues with."
     Mad Mats are very water-resistant, Kimmich said, so a 5x8 rug weighs 5 pounds dry and 8 pounds wet, and will only stay wet for about two hours.
     "It's very simple, yet the simplicity of the whole concept is what's making it have such long legs in the market," she said.
     The plastic allows for great fade-proofing, but there's more to creating a good product than that, Kimmich said, especially with new competitors coming on board.
     "The construction is different because the plastic is guaranteed, and there is still nobody out there doing that. So we're hoping that helps us to survive all of the new competition that's showing up," she said. "Every year twice a year we go over it - is the formula right? Is there enough of it? I'm kind of manic about it because it is outdoor furniture, and outdoor living with any luck involves sun. Even the ribbon has been treated to be sun-proof."
     In indoor/outdoor right now there are two basic categories, Tiwari said, machine-woven, which could be flat-weave or loop at more promotional price points. "Then you have what is called a hand-hooked indoor/outdoor, and these are loop tufted with a latex backing," he said. "They are looped for durability. We have some braided indoor/outdoor using polypropylene, but the machine and the hook are the two areas where we are growing rapidly."
     At Loloi, as with most of the outdoor rug vendors, the primary material being used right now is polypropylene, according to company principal Cyrus Loloi.
     "Although polyester can be UV- and mildew-resistant, I think polypropylene has proven itself the most resistant fiber. The colors stay, maintain themselves over time much more effectively. And there's less fraying with the fiber over time as well. Occasionally we'll still do a polyester/polypropylene blend, but we're still moving toward mostly polypropylene," he said.Surya
     "We try to go for multiple textures in the indoor/outdoor category, where it's possible and where it can add dimension to the product. For instance, our Enzo Collection has both hook and pile within single rugs. And our In-n-Out Collection, which has been recently introduced, is actually hand-braided. Our Moor Collection is hand-hooked in the field and then hand braided on the border. So you're seeing indoor/outdoor collections becoming more complex. They're evolving quite a bit."

COLOR AND TREND

In terms of color, Capel offers the full spectrum, but Watras said the neutrals remain the strongest sellers, including natural sisal tones, terra cotta and chocolate brown.
     But customers are demanding more than just neutrals in this category.
     "The styles are not just neutral colors and sisal looks anymore," said Gray of Oriental Weavers. "We are actually seeing blasts of bright colors in all outdoor categories."
     Mad Mats specializes in color, but Kimmich realizes there's also a market for more toned-down hues as well.
     "I'm really drawn to bright colors. I have to force myself to do quiet colors and force myself to do style colors, but each year I get a little better about doing that," she said. "This year we're really hitting it. We've got three really popular outdoor furnishings colors, and we've also got three more designer, edgy colors - the pink and aqua and white. I'm drawn to floral prints for some reason - wildflowers and tall grass. I'm just all over the place with the pattern. That's why we say we put the casual back into casual living. Let's have some fun. Let's get some color out there."
     KAS's Reiss said that bright colors work well, as do tonal colors. One standout has been charcoal gray, and dark blues are also selling well, colors that she said are also good sellers in the regular rug programs.
     Surya's Tiwari said consumers feel more adventurous with color when looking at an outdoor space, so he looks to what the outdoor furniture manufacturers are doing with their products to drive the product development of these lines.
     "People can be more creative with indoor/outdoor using the big bold colors. We're following the upholstery world in the outdoor world and trying to be very close to that," he said. "We're doing a bit of both, looking at what trends indoor/outdoor upholstery are setting and then we want to head that direction. At the end of the day, everything we do needs to coordinate or accessorize with the upholstery. That said, we don't follow it to the ‘T' because sometimes we have a set of customers willing to try new things, not limited to the upholstery world.
     Loloi said the outdoor rug arena has increasing become more fashion-driven.
     "Even for customers who strictly desire an outdoor rug, they still want something that's more high fashion and perhaps a bit more modern -- not always something that's florals and outdoor-type of design motifs," Loloi said. "They want something that's more high fashion, more color, and that's something that we're aiming to do with some of our outdoor collections."
     In fact, sometimes the rugs are so fashionable as to be indistinguishable from an indoor-only design, Safavieh's Yaraghi said.
     "Style in indoor outdoor is trending with fashion for indoor fabrics and interior design styles," he said. "We were honored (recently) with a This Old House Top 100 products 2012 award for our Four Seasons indoor outdoor collection which is hand-hooked. Out of 100 products, Safavieh's was the only rug that won - and they could have chosen an indoor rug, but recognized the great strides in quality and design in Four Seasons. It is innovative in so many ways, from patterns with neon colors, to multi-colored chintz designs - all unheard of in outdoor a year ago."
     Reiss said that while 5x8 sizes sell well in outdoor, there is real strength in 8x10, which obviously come at a steeper price point.
     "People are paying more attention to their outdoor world. It's somewhere they want to be - not just inside their home but outside their home - and they are making that a place they can enjoy."

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