Over one billion dollars worth of unsold rug inventory was the lowest estimate I got while “Walking the Market” in High Point of unsalable/unsold rugs across the industry. At High Point I talked to numerous sales reps and wholesalers about how to sell these goods. An un-saleable rug may be saleable in a different place at a different price however along the way it was written off to zero or near zero. All rugs are unsold until they sell.
I and Rug News andDesign are going to work with people marketing un-saleable rugs because the problem is massive. As I have been told and understand it, the unsold inventory is mostly hand knotted by value and represent real value.
There are tons of rugs that are saleable but unsold because they are selling at a slower pace than they did when they were fresh. People are bringing in fresh knotted goods, yet the bottom of the pile contaminates the top of the pile. I think that there is a general realization that when the goods are fully written off they cost money to store and they devalue the newer goods.
The hard part is to sell the “un-sold” goods “out of town” where they won’t drag down the price point for newer goods. Years ago, when the rug industry decided that the picked over 90-line Chinese rugs were un-saleable in the 90-line boom years, a major retailer came in and bought the lot thus proving that there was still a market for them and building traffic and turnover nationwide.
The market and distribution for rugs is more fragmented now, but the same principles should apply; price/margin, a compelling story, and a reason to buy now when there is a limited offer for an opportunistic buy.
Rug News andDesign’s first project to support the marketing of un-salable rug inventories is with Michael Abdalla, a rug auctioneer and longtime friend, who will be selling 4,200 un-sold rugs. These are rugs are hand-knotted from India, 10-20 years old. His client bought a warehouse and found 4,200 Persian design rugs; the client wants the warehouse not the rugs.
Michael Abdalla’s rugs will be sold at absolute auction, no minimum, opening price $1 per square foot, no reserve (subject to prior sale) in lots of 3,000 to 5,000 square feet and up, as is, where is. A list of sizes and basic description will be provided for each lot. Each lot will be housed in a separate storage unit. Upon receipt of payment, the storage unit will be locked, and the key delivered to the buyer. The auction for each unit ends when the cash is received. Whole containers are available. Calculate shipping costs from Denver, Colorado.