STATS: Carpet rebounds after dismal Q2
According to executives, the sweet spot for these more expensive goods starts at $ 15 a yard wholesale, but runs well into $ 20 (i.e. $ 20 per yard or $ 2.22 square feet, material only). Due to the high use of hard surfaces throughout the home, the areas where carpets are used the most tend to have heavier face weights with higher design patterns. These heavier weights come with correspondingly higher price tags. For example, the Dixie Group’s primary fiber is nylon 6.6, with an average price about three times the industry average, said TM Nuckols, president of TDG’s residential division. “We design and make products that can enforce that premium, and the durability of nylon 6,6 is a big part of that.”
The higher prices were also supported by the multi-family segment, which artificially improved the net sales price of carpet as tenants stayed longer in their apartment during COVID-19, resulting in fewer turns. As a result, mills sold goods with higher average selling prices as opposed to the lower carpet normally used in multi-family homes. The moratorium on evictions also imposed a restriction on multi-family homes because fewer rental homes became available.
The encouraging takeaway for mills and their trading partners is that consumers are willing to give carpet a second chance after choosing hard surfaces for years. “As an industry, we are excited about the category itself from a long-term perspective,” said Christensen of Shaw Floors. “There is a lot of optimism in the category right now and everyone is enjoying the lift. The more people talk about soft ground, the more new buyers realize there are things that can improve their lifestyle. “
The performance of soft surfaces over the past three quarters, including the first quarter of 2021, has some executives wondering whether it is sustainable. “When is it going to slow down?” Christensen asked. “I thought it would be slower, but it just keeps going, fueled by disposable income. Some of our largest retail customers say  is the best year they’ve had. “
Others, such as Jonathan Cohen, CEO of Stanton Carpet, said they see signs of a promising future. “Relative to long-term trends, the fundamentals of US residential construction are strong due to historically low mortgage rates, improved balance sheets, lack of travel and dining spending and deep underpinnings,” Cohen explains. “We expect this combination of dynamism to benefit the R&D market for many years to come.”
Just as carpet is going through a kind of renaissance, the same kind of activity is seen in carpets. “Our carpet business in the first quarter is up more than 50% compared to last year and about 20% compared to the 2018 and 2019 figures,” said Lisa Lux, soft surfaces product designer at Anderson Tuftex. “Sales of our premium products will run until the latter part of 2020 and well into 2021.”
The way carpets are sold has changed quite drastically over the past six or seven years. Most flooring stores no longer have rugs like they once did, which has brought prices down. At the same time, e-commerce is dominating the carpet space as the fastest growing distribution channel. The pandemic further strengthened e-commerce’s position as homeowners more freely ordering 3×5 and 4×8 rugs online.
Flooring retailers are increasingly selling bonded carpets made from wall-to-wall carpeting as their de facto solution for the carpet industry without having to invest in racks of inventory. “The ability for the dealer and consumer to manufacture rugs that meet consumer needs beyond standard ready-to-use floor sizes has grown tremendously,” explains Cohen of Stanton.