Shrinking rugs helped sales

NEW YORK — Rug companies "shrunk" their businesses in 2003 and, as a result, the industry was able to eke out a 2 percent increase to $4.8 billion in total sales over the prior year.

Players can thank their smaller sized offerings — mainly 2-by-3 and 3-by-5 accents and scatter rugs — for the upswing in a year otherwise plagued by a slow economy, war in Iraq and stubborn unemployment rates. Closer to home, rug companies were forced to also overcome downward price pressures, a situation exacerbated by the volume shift to lower priced and lower margin impulse purchases.

Early in 2003 — and in many cases before that — the top five rug companies and many of their top competitors discovered the value in adding smaller ticket items to their offerings.

"The fastest growing segment (of the rug industry) is accent and scatter sizes," said Jeff Meadows, division vice president, Shaw Living, based in Dalton, Ga. "They are way outgrowing the woven area rug and bath rug businesses."

The discount department stores continued to dominate the category of rugs last year, churning $1.2 billion, or one fourth of the total market share. But after these stores, the playing field seems to have evened out and rug companies attribute this shift to the growth in accent rugs.

Carpet and floor covering stores together snatched up second place as prime rug destinations, with $528 million, or 11 percent of total sales.

A close third were home improvement centers with a 10 percent share, or $480 million. Furniture stores made up 9 percent, or $432 million, followed by direct-to-consumer, which has 8 percent, or $384 million. Department and mid-price chains each took 7 percent, or $336.

"Accent and scatter are a natural for lots of people — domestic department stores, the big boxes, specialty chains, and so forth — and once the shift happened in those places it quickly spread to home centers, independent furniture and floor covering stores and then to gift stores," Ed Vairo, Nourison's director of creative marketing said.