By Sarah Zimmerman
No pain, no gain. This seems to be the “cautiously optimistic” adage most of the industry—including the rug segment—is living by after a down year in 2007 and equally dim first half in 2008— Area rug sales dropped approximately 5.2% last year in comparison to 2006, bringing in $2.971 billion in 2007.

However, although everyone agrees business is bad, category leaders continue to convey this is the time to “kick it up a notch,” adding innovative products, a focus on the environment and new marketing strategies to the mix.

Dave Forman, marketing director for Nourison said looking to the future keeps business progressive during economic slumps. “By planning well past current conditions and creating innovative ways to help our retail partners maximize their return on investment, we are confident as we head to July markets and remain hopeful for the second half of this year.”

Kim Barta, Shaw Living’s brand manager, agreed, noting the future is positive as long as manufacturers remain on the forefront. “We just need to get through the downturn we are currently facing. With continued interest in the hard surface segment, area rugs are expected to bounce back.”

Bill Storey, senior vice president and general manager of Karastan, noted the lower end of the market has been hit hardest by cost-of-living increases, “and it looks like spending in that segment will get worse before it gets better. Fortunately, Karastan customers are genuinely more affluent and less impacted by these rising costs.”

Storey explained this is why the company’s product development team always stays on the forefront of trends, noting it will be introducing “traditional styles with a contemporary twist” heading into the second half of ’08. He also noted the continued influence of the growing concern by consumers for the environment.

Norman Marks, president and general manager of The Natural Carpet Co. (NCC), elaborated on the green movement. “Hands down this is where the category is today—invested in environmentally friendly products and programs. Green was huge in 2007 and continues to be leading the path in 2008.”

He noted that’s why NCC views natural as timeless. “We are always looking at natural, sustainable, ecologically correct floor coverings. I guess it’s trendy to be natural, and it is also natural to be trendy. So, NCC is naturally trendy in a timeless way.”

Similarly, Shaw’s Barta said the environment is top of mind (along with the economy). “To be able to purchase a product that is environmentally friendly without giving up aesthetic quality at a reasonable price point is something we are all looking for—our area rugs are there.” She also noted in terms of design, the magic word is still transitional and from a color perspective the overall palette is moving cooler year after year.

David Moyer, general manager for Mohawk Home, added that customers still shop in this order: design, color and then price. “Even in a down economy we must continue to design new products that are innovative and introduce new constructions.” He said Mohawk Home sells more casual contemporary styles and will be coming out with 40 to 50 new designs for the second half of the year.

Nourison’s Forman pointed to another important area of focus in a dwindling economy— marketing. “As a leading supplier we realize our retail partners are first to feel the effects of a slowing economy,” he explained. “Therefore, we have been pursuing creative new ways to help stores maximize profits.” In addition to its traditional marketing materials— customized direct mail, in-store signage and aggressive national advertising—Forman said Nourison has created new displays presenting hundreds of additional products in a limited amount of space.