Lower-end pricing edging up, while high end surges ahead

A paradox it may be, but vendors at the Atlanta Area International Rug Show reported that while they are grappling with increasing material costs affecting the machine-made part of the business, sales in the highest tier of handmade are thriving.

"On the machine-made side, raw material costs have gone way up," said Jonathan Witt, vice president of marketing at Oriental Weavers USA. "It's a matter of absorbing costs — that's a challenge for everyone in the business right now." Witt added the use of nylon is expanding in the market overall, which he expects will become more prevalent over coming seasons.

"In the inverse, with handmade products it's amazing how the prices have come down," Witt said. This market, Sphinx debuted the Origins Collection, which are hand-knotted in India of New Zealand Wool and retail at $699 for a 5×8.

"As they say, a rising tide raises all boats," said Edward Vairo, director of marketing at Nourison. "The rises in materials have been significant, but not dramatic, and the increase in transportation costs is at least equal to material." Vairo estimated the overall increase in wholesale prices is between 3% and 5%, not enough to prevent the consumer from buying a rug if they want one. "I think the industry is facing a relatively positive situation," he said. "The majority of retailers I spoke to at the Atlanta market and at Surfaces were reasonably optimistic about growing their businesses and posting some increases against last year."

"We've seen a resurgence in the hand-knotted business — people are spending a lot," said Marlys Giordano, director of marketing at Momeni, noting the company has not dropped pricing on its hand-knotted offerings. "Machine-made is doing well; at the opposite end is the hand-knotted, high-end." Momeni's machine-made collections are made of pure New Zealand wool and boast hand-finished detailing like hand-carving and hand-serged edges, adding a better perceived quality, according to Giordano.

Perhaps the most significant driving force in design is texture: one emerging direction is multiple textural treatments. Where a rug might once have featured a high-low treatment, now it will combine carving, loop-cut, varying yarn counts and any other number of textural, multidimensional applications: all within the same rug. Especially within the machine-made category, the value is upped considerably when the look closely resembles a handmade design. Witt of Oriental Weavers said, "Texture in rugs is the perceived value, the extra edge that consumers perceive as hand-done."

"We are using more design treatments in one rug," agreed Liora Manne of Lamontage and Trans-Ocean. For her high-end Lamontage Collection, Manne is utilizing laser-jet pattern-cutting and metallic fibers for a crystalline effect. In Trans-Ocean, she applied yarns of different thicknesses for a "blossom" effect, as well as mixing various processes such as carving, cut-and-loop and new dying techniques with a translucent result. "I've been pushing the envelope," she said. "The market is ready for new looks, they love it."

"There's a lot you can do with texture," said Satya Tiwari, president of Surya. "You can create design by texture. We work with our designers so they don't treat the rug as a flat surface."

Edward Vairo

Marlys Giordano

Liora Manné

Jonathan Witt

Satya Tiwari