PORTRAIT: Mike Shabtai, The Rug Market America

Susan Dickenson -- Home Accents Today, 7/8/2011 10:09:04 AM

FOR THE RUG MARKET AMERICA, Los Angeles-based manufacturer of colorful, fashion-forward area rugs, the lastFrom left, Aaron, Andrew and Mike Shabtai. few years have been good. The company, which turns 25 this year, is a three-time ARTS Award nominee, has won both gold and silver ADEX awards for design excellence, and, this past spring, unveiled an expanded offering of its Walt Disney Signature Collection, one of about two dozen lifestyle collections in its product line.

The company's success is the direct result of President and CEO Mike Shabtai's ambition, passion for fashion and color, and desire to create something different. "I came to this country in 1970 when I was in 10th grade with $500 in my pocket and no idea how my life would turn out," Shabtai recalled. "But I learned one thing right away - if you don't work, you won't survive!"

His early experience came at a traditional Oriental rug store he ran with his brothers. When the brothers decided to start their own companies, Shabtai acted upon a desire to do something different. "In the 1980s, rugs were boring, so I decided to develop a line that would be fresh, bright and fun." Starting out, The Rug Market sold small throw rugs and bath mats.

Today, the company sells rugs in a variety of styles, materials, colors, construction and price points; employs more than 40 sales representatives nationwide; maintains showrooms in Atlanta, Chicago, Dallas, High Point and Las Vegas; and just moved into a new corporate headquarters and showroom in Los Angeles.

Sons Aaron and Andrew joined the company several years ago as vice presidents. "One oversees sales and marketing, and the other is in charge of operations, while I focus on the creative side," Shabtai said. "And my wife has been the backbone - a great mother, housewife and partner. We consider her our CFO.

"Most people think it takes luck to be successful. That's not true. You also need to be ambitious, honest and nice to people. I've achieved my American Dream and satisfied my vision. I am where I want to be. I love my life."

What is the most enjoyable part of your job? Working with my designers, shopping for ideas and planning what's next. What I find most rewarding, though, is seeing our products in catalogs and store displays and hearing reps, customers and editors praise our beautiful line.

How have you seen the rug industry change over the years? When I first started, I was the only one doing what I do. The rest of the industry was more traditional. Consumers seemed to buy area rugs only as an afterthought or impulse buy when they were furniture shopping. Since then, area rugs have become much more of a statement of personal style, and the demand for unique and on-trend products is greater. Now, every company is trying to innovate and do something new which has, unfortunately, also led to a lot of copying and cheap imitations.

For many years, our flat-weave production was done in India. I used to go there two or three times a year. It was very interesting - our color palettes were all bright, so the entire place was bright and happy, full of dyed yarns and stacks of folded finished rugs. It was always a pleasure to see the smiles of the weavers and their families. They were very humble and supportive. The handmade rug business is diminishing little by little. The weavers are older and retiring, while their children have gone to school and gotten into technology, manufacturing or a trade in which they use their heads instead of their hands. Less hand-knotted product is changing to more hand-gun tufting, which is cheaper and faster to develop.

There is no question that the recession impacted the industry as a whole. However, we took that opportunity to create new collections ... to provide our customers with quality products at a value. We also began offering special promotions. Fortunately, business has picked up within the past year and has enabled us to expand.

Anything new planned for the upcoming markets? Yes, we've developed a new swatch program that enables our clients to evaluate our rugs by looking at a miniature, scaled version of the item. Individual swatches will be available along with complete program deals that make it easier for dealers to display our entire line. We are also releasing our new catalog and have reopened showrooms in Atlanta and Chicago.

Highlight of your career thus far? The opening reception for my first corporate showroom. Over 200 people attended. I got to hear positive feedback from buyers and other people in the industry. It was a really great moment for me.

Do you have Rug Market rugs in your home? I do. The best part of owning a rug company is that I can always change to a new mood or a fresh look without redecorating the entire room. My favorite collection of ours is Shabati. The designs, colors and vision are a direct reflection of my personal style.

AT-A-GLANCE
Where did you grow up? Born in Iran; came to New York at age 16.
Where do you live now? Beverly Hills, Calif.
How do you relax/unwind? Window-shopping, driving along the beach with my top down, playing a little poker
How did you earn your very first paycheck? In 1970 in NYC, for $1 an hour, standing in very cold weather guarding merchandise on 14th Street
What are you reading right now? The Sixth Man, by David Baldacci
Complete the sentence: "I wish I knew how to..." Be more patient... I want everything yesterday!