Elevating Residential Carpet: Elevated design at affordable price points signals a shift - Mar 2019
By Darius Helm
The residential carpet market in recent years has taken on the contours of an increasingly bottom-heavy hourglass, as inexpensive PET carpet has swamped the lower price points with an endless sea of overall texture, in sharp contrast to the highly designed product sequestered at the top of the market. However, several prominent mills are leveraging their design capabilities and tufting technologies to challenge the notion that attractive patterned carpet is beyond the reach of the middle market. And there is hope that design can help redefine residential carpet and build a bulwark against the commoditization of the category.
At the recent Surfaces show in Las Vegas, one of the biggest stories was carpet design. Higher end specialists like Kaleen and Stanton wowed the crowds with lush finishes, woven looks, innovative colorways and a wide range of sophisticated patterns. The Dixie Group unveiled riveting styles across all three brands. Anderson-Tuftex came out with Unleashed, an all-loop pattern at price points well below what one would expect for that level of design. And Phenix Flooring, which does a lot of business with entry level and big box carpet but has also been a leader in elevating PET design, took solution-dyed polyester in a new direction with Modern Contours, a line of patterned, textured carpet that creates a new benchmark for what is achievable with the low-cost fiber system.
CARPET’S SHIFTING ROLE
The carpet business is not quite the behemoth it used to be, but it still dwarfs the other flooring categories, accounting for over a third of the market and well over $8 billion at mill sell price. But the rise of hard surface flooring over the last few decades, and accelerating in the last few years, has massively altered carpet’s domain in both residential and commercial applications. In just the last 20 years, the category has lost 20 percentage points in flooring marketshare.
On the residential side, it used to be commonplace for homeowners to carpet their entire house, generally in a single SKU of flat cut-pile broadloom. The resurgence of hardwood, and more recently, hardwood looks in resilient, has driven carpet from the high-traffic common spaces into bedrooms, upstairs corridors and sometimes dens.
A decade ago, the development of continuous filament PET technologies created a massive PET market almost overnight, on the heels of the housing collapse. In those tight economic times, the lower cost of the fiber was too appealing for the market to resist. The massive surge in multifamily construction played a central role in accelerating the PET carpet category, which also staked a strong position in the builder market and at the lower end of the residential remodel market. And within a few short years, PET became the dominant residential fiber.
Most of the PET carpet on the market is a simple texture of high-twist fiber-the twist is essential to add bulk to the fiber-while the nylons are stronger in the more complex and pricey constructions, and higher still are the wools and the hand-tufted products.
In many ways, this long-term loss in marketshare and the inundation of low-cost PET has put the carpet industry in a reactive mode. The pet protection campaign, for instance, seems designed to hold onto those higher impact common areas, to make the case that even though messes on carpet seem so much worse than messes on hard surfaces, they clean up just fine. And the ultra-soft fibers seem like an attempt to protect the bedrooms from encroachment by widening the gap between the soft coziness of carpet and a hard bedroom floor.
Despite these efforts, carpet is still losing share, and there is concern that the unremarkable quality and styling of the bulk of residential carpet may drive further deselection.
A NEW MARKET
What the flooring industry was at first slow to realize was that the emerging residential carpet market-constrained by hard surface flooring to the private, sheltered zones of the home-was not simply a smaller version of the old carpet market, but was in fact an entirely new market, just waiting for someone to come along and define it.
For one thing, it has changed the way people buy carpet. Bill Storey, senior vice president of Mohawk’s Karastan business, points out that homeowners are now carpeting single rooms, enabling them to take more of a risk with pattern, because it’s a smaller footprint. He further notes that “an upside to the growth of hard surface is that, with the rooms that are left, the consumer will spend more on carpet. Hard surface has helped push up the price.”
Lisa Lux, Anderson-Tuftex’s director of product development, points out that homeowners are increasingly using different carpets in the different rooms. “Master bedrooms may get a fancy patterned piece, with a different choice for the other bedrooms,” she says. “One for the boy’s room, one for the girl’s room, something different for the stairs or landing.”
Homeowners also have more exposure to design these days, with everything from HGTV to Pinterest providing inspiration for home décor. And it has helped people to not just find what appeals to them but also to express their tastes.
At the same time, relatively new tufting technologies, like Infinity attachments and ColorPoint machines, have been enabling mills to do more with color and pattern, and they’re starting to leverage that technology at more affordable price points.
Jared Coffin, vice president of product management for the Dixie Group, points out that the firm has been making the most of its ColorPoint technology. “It can give more color placement to create dynamic patterns,” he says.
Lux adds, “It’s the best way to get a woven wool look in a tufted product.”
There has always been a lot of stunning textured and patterned carpet in the residential market, though at the high end. Some come from a rug background, like Kaleen, Momeni, Couristan, Nourison and Karastan, while others are rooted in carpet culture, like the Dixie Group’s Masland and Fabrica. And it’s the styles that these sorts of mills are producing that capture all the attention and inspire homeowners.
One of the more diverse firms is Stanton, which is composed of a handful of high-end brands, like Rosecore, Crescent and Antrim. The firm uses about every fiber on the market in woven and tufted constructions, from reinterpreted traditional designs to contemporary abstracts to bold experiments in design.
The bulk of Stanton’s products are woven, but it used to account for even more. According to Jonathan Cohen, CEO of Stanton Carpet, “Tufting technology has come a long way to get woven looks.” He anticipates that over time tufted carpet will be an even bigger part of Stanton’s mix, as long as the technology lets the firm get the looks it wants.
Everything that Kaleen makes is hand-woven, and it’s almost all wool. The firm was an area rug specialist until five years ago and has since put lots of energy into growing its higher end broadloom business. The firm has built a reputation for its carpet designs, including crisp patterning, from traditional houndstooth and herringbone motifs to tailored small-scale patterns and dense, nubby constructions-along with a range of indoor/outdoor products.
Blake Dennard, the firm’s vice president of marketing, reports that its chevron and herringbones in various forms are among its best-selling designs. Dennard notes that, when designing product, while cognizant of hard surface flooring, attention is paid to furniture and accessories and the colors going onto walls.
Another prominent player in the better goods business is Karastan, which has been making machine-made rugs since 1928. The firm made its first nylon broadloom over 50 years ago. However, Karastan is not priced as high as Kaleen or Stanton. The bulk of Karastan’s broadloom retails from $4 to $7 per square foot, while Kaleen does most of its business in the $9 to $11 range. Some of Stanton’s brands go as high as $14 per foot.
Karastan has a reputation for classic designs, but these days it focuses more on modern reinterpretations of those traditional motifs, as well as more contemporary styling, like Mackenzie and Berkeley, woven products with large-scale stone looks. However, on the residential side, most of Karastan’s carpet is tufted; the firm also has a sizeable commercial program that focuses more on woven carpet.
Karastan reports that its patterned business has posted year over year growth for the last four or five years, and now accounts for over a third of its offering.
No firm has a wider price point range or a higher high end than the Dixie Group, whose three brands-Dixie Home, Masland and Fabrica-cover price points from less than $3 per foot retail all way up to nearly $20 for its top-of-the-line Masland and Fabrica wool carpet.
Everything the firm makes domestically is tufted, and it sources some handmade wool products. Over the last couple of years, the firm has introduced some flatweaves and hand-loomed products to Fabrica, and this year it’s adding some Wilton woven carpets.
“There’s strong demand for wovens and woven visuals,” says the Dixie Group’s Coffin. “They behave more like a rug and look more like a rug.”
The one trend that all the mills we spoke with agree on is woven looks. According to Coffin, the trend influencer at the higher end is handmade rugs, expressed in a range of ways. Flatweaves are hot too. When indoor/outdoor rugs started to hit the market several years ago, the flatweave patterning of those initial introductions-with high contrast geometrical motifs not unlike tribal designs-immediately caught consumers’ attention, and the market for those products has been growing ever since.
Another trend is fiber effects. While at the lower end of the market, this is mostly limited to luster levels and metallic glints, higher-end mills use a wider range of fibers, including natural fibers like wool and silk effects through synthetics and processed natural fibers like viscose. Stanton in particular puts a lot of focus on trying to develop fiber looks, which drives the development of the aesthetic. The firm has created a lot of products with silk looks over the years, using different fiber systems. At this year’s Surfaces, it showed product using a silken nylon.
Natural colors, generally on the lighter side, are trending as well, as are patterns inspired by nature-complex organic striations, biophilic designs, abstracted botanical motifs. And again, updated takes on traditional patterns are also strong-woven chevrons in various scales have been hot for the last few years.
Card-Monroe has come out with its most revolutionary tufting technology since its introduction of ColorPoint. Tailored Loop for the first time enables the control of each individual loop-pile heights of loop in exact measurement, even whether to actually put the stitch in or not. The machine uses the firm’s brand-new ILC (Individual Looper Control) technology. The different levels in the construction are all smooth and precise because it’s the looper itself that changes the dimension.
“Most everything you see in Wilton woven up to this point this machine can do,” says Charles Monroe, CEO of Card-Monroe Corporation. And while it’s separate from ColorPoint, ColorPoint can still be applied to the technology.
The firm anticipates that the machines will be used in the residential and hospitality market, and even in carpet tile production. The versatile machine, which is patented, will not only make Wilton looks, but it will make them much faster than on a Wilton loom, allowing for the creation of the distinctive visuals at lower price points.
Monroe reports that Tailored Loop took three-and-a-half years to develop, and he anticipates strong demand. Card-Monroe intends to ship the first machine this quarter.
When it comes to developing the new carpet market, two of the best attempts come from Anderson-Tuftex and Phenix Flooring. What both firms seem to have realized, coming from opposite ends of the market, is that they’re in a position to deliver to homeowners products that they never even knew they could have.
Phenix’s Modern Contours includes multilevel textured geometric patterns, a whole set of high-energy organic striae designs, a bold all-loop style with irregular laddering, and more-all made from solution-dyed polyester and retailing in the mid-$20s per yard, or less than $3 a foot.
According to Jason Surratt, Phenix’s SVP of product and design, a big emphasis with Modern Contours was the use of the latest tufting technologies, like ColorPoint, for color placement and clear patterning, as well as specialized fibers. Phenix is part of the Pharr family of companies; Pharr Yarns has been supplying the carpet industry with a wide array of fibers for nearly 80 years.
Surratt adds, “With Modern Contours, we offer a curated palette that lets the customer know that we have various textures within the program that coordinate, and that also coordinate with LVT.”
Anderson-Tuftex, which is a higher end brand of Shaw Industries formed just over a year ago from the strategic merger of Anderson Hardwood and Tuftex, came out with a stunning carpet collection called Unleashed, also leveraging technology like ColorPoint to create high-end designs, most notably, woven looks.
The collection uses Stainmaster PetProtect nylon 6,6 fiber, and while a lot of the marketing focuses on the pet aspect-“With Unleashed, you can have a pet-friendly home that doesn’t look like a pet home”-what distinguishes the collection is the designs themselves. Speak, the showcase style, is a linear design of thick banded braids and diamond motifs that, on the one hand, looks like woven rug borders transformed into carpet and, on the other hand, looks like something entirely new and fresh. Most importantly, it looks like a product that homeowners never knew existed as a possibility for their homes-it tops out at well under $5 a square foot.
Another major trend in residential broadloom is rug fabrication. Just about every mill reports that the rug fabrication business is in the midst of a growth spurt. Apparently, there’s strong demand for custom sizes and shapes, which is the main advantage that rugs fabricated from broadloom have over handmade and machine-made area rugs. And fabricated rugs provide an attractive option for retailers that have had to exit the area rug business, driven out by the high cost of keeping an inventory which, no matter how extensive, can’t compete effectively against the limitless options in the e-commerce channel.
Coffin reports that the Dixie Group’s fabricated rug business is growing dramatically, though finishes are more simple than in years past, when hand-carved inlaid rugs were prevalent. “Now, a custom rug is just a bound rug in an odd size,” he adds.
Story says, “Probably 15% to 20% of every Karastan broadloom order is getting fabricated into an area rug.” He adds that Karastan completes about 15% of its fabricated orders in-house, and retailers fabricate the rest. Fabrication business has doubled for Karastan in the last five years.
Anderson-Tuftex’s fabricated rug business is also on an upward trajectory, last year accounting for an estimated $4 million to $5 million in sales. Often, homeowners will fabricate rugs for one space using a broadloom design that’s installed wall to wall in another space for a cohesive overall design.
The firm offers a rug calculator online that can be used with any of its broadloom styles, and the ease of use has helped drive sales.
Stanton has always done a lot of rug fabrication, and it’s been growing in the last few years. About a year ago, the firm launched Create A Rug, a robust B2B system for placing orders and inventory that also enables consumers to customize their own selections, including carpet style in a custom size, finishing and backing, which can then be sent to a local flooring retailer to complete the order.
Most of Kaleen’s revenues come from its area rug business, which goes through furniture and flooring retailers as well as e-commerce. Rug business is still strong with furniture retailers, but it’s down with flooring retailers. And the firm is seeing price point erosion, driven by e-commerce. So rug fabrication has become a welcome option for flooring retailers.
The firm is currently focusing on improving its retailer program to streamline the process, and next year it will roll out fully customized programs with separate merchandizing units for flooring and furniture retailers.
Coffin anticipates that after a little more loss of marketshare, carpet will stabilize. But he expects that the market will still be divided between commodity carpet and higher-end styles, though lower-end product will feature more pattern and design.
Surratt has no illusions of ever going back to the days of covering hardwood with carpet, though he also feels that the market is nearing a cap for hard surface taking share from broadloom.
Dennard expects that firms like Kaleen will continue to develop increasingly affordable products with elevated design, which would force mass producers to step up their games.
It’s certainly true that the timing is auspicious for the creation of a new residential carpet vision, with new tufting technologies marrying comfortably with the consumer’s desire for higher-end woven looks at affordable prices. And the timing may be even better than that, if in fact the carpet industry is approaching a point of natural equilibrium. And it’s not just wishful thinking. After all carpet has already retreated from the parts of the home where it is most vulnerable. Soft surfaces in the quieter shelter spaces makes a lot of sense, and it may take a lot to displace broadloom from that part of the home.
If in fact carpet stops losing its share of the home and the current distribution of flooring becomes the new norm, it presents the carpet industry with a perfect opportunity to cement its new vision instead of wasting energy fighting over every square foot.
Copyright 2019 Floor Focus