Philadelphia, PA, July 26--Even in this global economy, sometimes the cultural divide still separates East and West. Roy Maloumian understands the distinctions, and that understanding helps to drive his success, according to the Philadelphia Business Journal.
"It's a different culture," he said of his frequent buying trips to India, Pakistan and China. "We are doing business the way it has been done for centuries, and the people I deal with, they like to press the flesh. They don't write contracts or things like that, and really I feel more comfortable with that supplier's handshake than I would with a 100-page legal document."
As an importer of Oriental rugs, Maloumian may rely on the old ways, but back home as a retailer, it's all strategic business moves and technological innovation.
This combination of skills has helped him build Maloumian Oriental Rugs into an $8.3 million enterprise, with this year's revenue expected to top $11 million.
Founded by Maloumian's grandfather in 1927, the business had closed its four retail outlets in the late 1980s to concentrate on importing. "With stores that are open seven days a week, you have to worry every time the power goes out or the air conditioning breaks," Maloumian said.
Then, in the mid-1990s, he found a better way to retail. Instead of running his own stores, he began opening independent rug departments within high-end Robb & Stucky furniture and home-design stores throughout the nation.
Smart move, said Lucille Laufer, executive director of the Oriental Rug Importers Association. In an industry plagued by bogus "going out of business" sales and fraught with consumer confusion, the legitimacy of Maloumian's sales environment "gives him a very different twist on retailing," she said.
At the same time, the spacious showroom environment gives Maloumian the chance to educate buyers about his product.
"An obstacle that the industry faces is in the effort to get out to the consumer the idea that everyone can afford an Oriental rug, that there is a rug for everybody's taste and for everyone's pocketbook," she said.
To help drive home that notion, Maloumian is hooking up live video feeds between his nine retail locations. (He expects to add three more stores by the end of the year.) By sharing inventory across all his stores, the video connections should help to broaden clients' choices, making diverse selections more readily available.
Nor is this the company's only technological innovation. It may seem ironic, but even as an importer, Maloumian has begun to forge technology-driven ties to his suppliers abroad, who, in spite of their Old World ways, now e-mail him pictures of their new designs and fabrics. Still, it takes a personal tie to make that digital connection possible.
"They wouldn't e-mail you those photos unless they knew you," he said.
Given the economics of the industry, that direct connection to the manufacturers overseas may give Maloumian an edge, said Paul Vesely, president of the import operation Ves-Levi Corp. in Secaucus, N.J., and a past board member of the importers association.
"During the good times, handmade rugs sell. During the bad times they are the first item off the shopping list and, during an economic recovery, they are the last item back on the shopping list," he said. As both an importer and a retailer, Maloumian can accelerate that cycle, "because he knows what people want, how they want to buy it, who the target market is and how to present it."
“In order to keep rugs moving, "you have to know what to buy," Vesely said. "So a guy who does his own importing, who is also a good retailer, has a big advantage."
Maloumian dabbles in direct-to-the-public sales too. Talk about a rough life: His Thursday warehouse sales have practically forced him to take in an extra $2 million a year.
It started with an annual clearance sale at his local 10,000-square-foot warehouse. One weekend a year he would offer rock-bottom prices to make room for next year's inventory.
Then in 2002 he put in a new phone system with improved voice mail, and he started hearing the customer complaints. Why was the warehouse closed when they came back? When would it open again ...?
So Maloumian started opening up the warehouse every Thursday, in a marketing effort that now brings in $2 million a year. "We only did it because we did not want to have people mad at us," he said.
