2025 Area Rug Update: Fabrication has become a driving force in the area rug business – Dec 2025

By Jessica Chevalier

From the starter-home living room to the five-star hotel lobby, area rugs add ambiance, texture and warmth to spaces. In response to the increase in the use of hard surface flooring, the need for area rugs has also grown, and with the movement toward open-concept living and expanding commercial spaces, the need for customized area rugs has increased. As such, the business of providing area rugs has changed, with area rug and broadloom providers altering their offerings and strategies to serve the market in its new form as well as respond to the changing production landscape wrought by tariffs and other factors.

A CHANGING MARKET

The area rug business has evolved dramatically over recent years, especially as it relates to flooring retailers.

“Mass merchants and internet retailers sell predominantly programmed (stock) rugs while independent floorcovering stores are now selling more customized area rugs,” says TM Nuckols, president of The Dixie Group, which sells mid- to high-end fabricated rugs and is home of the Masland, Fabrica, and DH Floors brands. Years ago, it was fairly common for flooring retailers to have a selection of rugs within or adjacent to their showrooms, but this has changed for a variety of reasons.

First of all, the advent of area rug sales online, which many industry experts never expected to take off due to the challenges of accurately displaying color and texture through a screen, has become a major channel for product sales due to the expanse of offerings that can be populated on webpages. Almost instantly, the consumer’s options expanded from
dozens or hundreds in a showroom to thousands on the world wide web. Keep in mind, the area rugs sold through these sorts of large-scale online sellers are typically low- to mid-range pieces, so the consumers shopping online aren’t looking for heirloom quality or the precise shade of robin’s-egg blue. They want something functional and affordable, and area rugs sold online fit that bill.

Second, as this happened, retailers looked at the space and capital their stocked rug inventory was sucking up, and the return on investment seemed less certain. While the increase in hard surface flooring use does increase demand for area rugs, it also generates a need for greater space to dedicate to hard surface flooring displays. As such, for flooring retailers, the value proposition around area rugs changed fairly rapidly, and the stocked area rug business migrated to furniture dealers, discount chains and the internet. Upper-end area rug business-long the purview of area rug specialists and design stores-remained more steady in its channel strategy.

As a result of all of this, when broadloom manufacturers began introducing programs to create customized area rugs from broadloom, flooring retailers, still hoping to get a piece of the rug sales, readily embraced these options, as they are a good fit for how flooring retailers do business. Flooring sales require hands-on direction by educated retail sales associates (RSAs) who inform the consumer of the options, qualify the customer based on their needs and then guide them to the best solution-handling the technical details for the customer. Selling prefabricated, stocked area rugs doesn’t require this approach, but selling customizable broadloom rugs does.

Another appeal in the fabricated business, says Nuckols, is that it “requires very little capital investment. The retailers do not have inventory dollars tied up on rug racks. Most consumers are willing to wait to get what they want, and this outweighs the immediate gratification of stock rugs.”

Furthermore, consumers like custom. Custom feels unique and special. And while there will always be a market for handmade luxury area rugs that are, essentially, art pieces, consumers at mid-range price points can now find something that feels more special than off-the-rack area rugs with bound broadloom rugs specifically customized to their tastes, tones and specifications. It’s a couture experience that average consumers can access.

According to manufacturer interviewees, for many, fabricated area rug business has now eclipsed stocked offerings for many producers, and it’s this business that is viewed as the growth engine of the market for the next several years.

“The strongest growth is within custom fabricated area rugs and luxury performance-driven products,” says Christine Zampaglione, vice president of marketing for Stanton, which offers both stocked and fabricated rugs. “Consumers today want tailored design solutions that reflect their personal style while delivering functionality, particularly for active households with kids and pets. The ability to select size, shape and finishing transforms a standard carpet into a bespoke design piece.”

Zampaglione estimates that more than 50% of the total area rug business today is fabricated, with continued growth expected. “The ease of customization, speed of production and the ability of retailers to offer unique, made-to-order designs have made fabricated rugs a dominant force in the market,” she says, also noting the fabricated rugs typically offer a higher margin for retailers than stocked.

At the heart of this shift are evolving perspectives on how consumers interact with their homes. “Customer tastes have shifted,” says Monty Rathi, owner of Kaleen, which specializes in fabricated rugs. “They are tired of machine-made and standard-sized rugs. They now seek custom sizes that make their homes feel unique and special.”

For companies like Kaleen, this change means developing broadloom products that can be easily transformed into customized rugs. “We don’t need more broadloom beige,” Rathi explains. “With our background in the trendy rug business, we create bright and happy colors that enliven homes, rather than dull ones.”

Non-traditional shapes also carry appeal for consumers, as they can fit unique spaces, creating a tailored vibe.

And while the focus of this article is residential, fabricated area rugs are also used commercially, such as in the hospitality sector, with designers and brands appreciating the ability to get exactly what they want and need. They are also increasingly used in corporate.

Kaleen produces and delivers fabricated area rugs within five to ten days of order placement. While customers may not walk out of a showroom with a new piece the day they buy it, they won’t have to wait long. All custom fabrication is completed in Dalton, Georgia, and the broadloom is imported from the company’s facility in India.

Nuckols notes there has been an increase in demand for room-sized rugs, which is interesting because it suggests consumers are seeking the best of both flooring worlds: the enduring charm and beauty of hard surface with the comfort and texture of soft.

THE POLITICS OF RUG PRODUCTION

In 2014, Shaw Industries exited the domestic area rug manufacturing business, transitioning its Ringgold, Georgia rug manufacturing facility to LVT production. Mohawk did the same over the next years, transitioning its Eden, North Carolina Karastan plant to broadloom and aviation carpet production (and ultimately shuttering that plant in 2021) and moving area rug manufacturing to northwest Georgia, then pivoting this manufacturing to focus on doormat and Foss-branded needlepunch product production only. Most of Mohawk’s prefabricated area rugs are now sourced from overseas.

Nationally, the woven production that used to be domestically manufactured has migrated overseas, with much of it going to Turkey. “Surya’s DNA is hand-tufted and hand-woven rugs from India, but we’ve made a huge shift over the last ten years towards Turkey,” says Brandon Culpepper, senior vice president of mass merchant at Surya. In fact, Surya believes it is the top importer of woven Turkish rugs into the U.S.

A big part of why this large-scale movement has taken place is due to the commitment Turkey has to growing its area rug business. “Their rugs are woven on looms that are very technologically advanced to make a relatively low-tech product,” explains Culpepper. “There are only so many of these machines in the world, and once you have a fleet, you have a product advantage. They can make the newest looks and colors, and a product that is wider. And they can make it faster. Turkey’s lead continues to grow based on this new machinery.” In comparison, rugs made on less technologically advanced looms will appear less sophisticated and dated. Turkey’s looms enable it to produce a better-quality product at a lower price point, pushing more quality into lower prices, and that is appealing to both importers and consumers.

The lead Turkey seized with its leg-up in technology, the Trump administration’s tariff policies reinforced. “The tariffs have given this trend rocket fuel,” explains Culpepper, “as the tariff on Turkey isn’t as prohibitive as India’s or China’s.”

Looking ahead, Culpepper notes, “What remains to be seen is what happens with the tariffs and how protectionist the U.S. will be going forward. If it gets more protectionist, more production may pop up here, but that takes a lot of time.”

Interestingly, if buyers want something domestically made, purchasing an area rug fabricated from tufted broadloom is sometimes the way to go. However, imports of decorative broadloom have also increased, and this is often the type used to make fabricated area rugs. The biggest exporter of broadloom to the U.S. is India, with Turkey second.

SERVING THE RETAIL PARTNER

While there are certainly financial benefits for flooring retailers in offering fabricated rug programs, just as important is creating systems straightforward for those using them, as clunky operating interfaces will dissuade busy RSAs.

Nuckols believes a key to making fabricated area rug sales is the ability to give the consumer a quote before they leave the store. “Our strategy is to make it as easy as possible for our retailers to quote and to sell fabricated area rugs from The Dixie Group,” says Nuckols. “This includes the option to get quotes and to order fabricated rugs via our dealer portals. Also, we have increased our rug content significantly over the past four years in types of products and looks that are used in rugs more so than wall-to-wall installations.”

Customization is a major selling point, and manufacturers need to offer a wide range of products. Kaleen, through its four brands-Kaleen, PureLife, Hook & Beam and Home & Porch-offers over 1,000 broadloom SKUs for fabrication into area rugs, including indoor-outdoor options.

WHAT’S AHEAD?

Nuckols anticipates that the area rug business will continue along the same path we have seen in recent years. “I expect the internet channel will continue to take share. I also believe the high-end fabricated area rug business will continue to have solid growth,” he says.

Zampaglione notes that the most significant changes she has seen over the last decade of the business have been the rise of customization, the shift toward performance fibers and pet-friendly materials, and the integration of technology in the buying experience.

“Consumers now expect both personalization and practicality, and digital visualization tools have made the design process far more accessible,” she says. “Looking ahead, we anticipate continued growth in on-demand customization, digital selling tools and sustainable product development. Consumers will expect even faster turnaround times and eco-conscious materials without sacrificing style. For Stanton, the next five years will be about enhancing the connection between technology, craftsmanship, and consumer experience, delivering custom luxury with ease and precision.”

Rathi anticipates that the market will continue to bifurcate into low-end and high-end segments. “The middle will fade out in the next five years,” he predicts. “The low-end will be dominated by machine-made products, while handmade and customized options will remain strong and continue to grow.”

Print the Article