Business Spotlight: Global Carpet Ride

Heather Elmer Reynolds couldn’t stay away.

Last year, she reopened the family rug business with global connections at 4121 S. Fremont Ave. after a nearly six-year hiatus.

Following a trip last month to Dubai sponsored by the U.S. Agency for International Development to promote economic stability in Afghanistan, Reynolds says she is more committed than ever to the company that has always been a part of her life.

Her grandfather, Vahan Megerian, started the Oriental rug company in 1934. Her mother, Voncille Elmer, set aside her teaching work at Mark Twain Elementary to help run the business in 1978 when Reynolds’ grandfather died. Reynolds worked for 18 years with her mom and grandmother before they decided to shutter the business in May 2008.

“We saw that the recession was affecting home furnishings, and it was perfect timing for them to retire,” Reynolds says.  

In the interim, Reynolds says she helped a friend open a hair salon – Ty Barnes of Blow Salon LLC – and was an assistant project manager for DCI Construction LLC. In February 2014, she made a leap of faith with a $20,000 investment and signed a two-year lease just around the corner from its old digs on East Republic Road. This time, the showroom is about one-third of the size, and rug cleanings are no longer offered.

“I missed the rugs, and I missed the history. I missed the customers, and I missed the culture,” she says, noting the mother-daughter duo remained in contact with vendors and key customers, occasionally facilitating sales without a store in the hopes that one day they could open again.

Twenty months later, the company is profitable and beating expectations. Reynolds declined to disclose revenue, but says she expects second-year sales to be up roughly 25 percent.

Hello, Dubai
In September, Reynolds was one of 20 North American and European importers invited to meet Afghan carpet makers in Dubai, United Arab Emirates. According to USAID data, rugs account for 37 percent of Afghanistan’s exports, and the industry provides work for women in the home.

The rugs Reynolds buys are largely handmade in India, China, Pakistan, Armenia and Iran – with about 10 percent coming from Afghanistan. She learned about the USAID trip from a friend while in Washington, D.C., at an international conference on Oriental carpets. After being vetted, she was invited to attend the two-day meetings with 25 Afghan-rug producers.

“They were so very thankful we were there,” Reynolds says. “They have a long history of making really beautiful rugs.”

The trip helped her connect with a new distributor out of Australia that can get rugs directly from Afghanistan. She says often the rugs come through Pakistan because of political unrest.

“That’s a better way to get it out of the country,” she says.

As for products, Megerian carries machine-made and hand-tufted rugs. Hand-knotted is the most popular style – and the most expensive.

Of course, size determines cost. For 8-by-10 rugs, prices range from under $1,000 – for all-wool machine-made rugs and the hand-tufted varieties created by loops of yarn through a canvas backing – to $3,000-$5,000. Higher end hand-knotted rugs are labor intensive and built to last.

The most expensive rug in the shop, listed at $9,500, was made in the 1930s. One of the older pieces in the store was made in the 1880s.  

Reynolds says about half of the rugs sold are hand-knotted, and they represent 75 percent of revenue. About 10 percent of business comes from consignment sales.

Supplies and support
Among Megerian’s 10-15 vendors are Tibet Rug Co. in Salt Lake City and Atiyeh International Ltd. in Portland, Ore.

Tibet Rug owner Jim Webber says he supplies Megerian Rug with hand-knotted pieces made in its manufacturing plant in Kathmandu, Nepal.

“We work with companies all across the country, and Springfield is the size of city that can support a good rug store,” says Webber, who declined to disclose order volumes, but notes he doesn’t have any other clients in the area.

Locally, Oriental-rug competitors include The Carpet Shoppe Inc. and James Decor, Reynolds says. Online retailers are another consumer option, and furniture stores will occasionally get deals or have machine-made products.

Reynolds says there were two key challenges to reopening: catching up on market trends and advertising methods.

She really hadn’t kept up with the new styles during her time away, so she had to study the market to find the right product mix. Also, Facebook and social media, in general, weren’t thought as keys to marketing before doors closed in 2008.

“People don’t use phone books anymore,” Reynolds says.

Tom Atiyeh, co-owner of Atiyeh International, says he has filled orders for Megerian – usually a rug at a time about once a month – for over 20 years.

His father, former two-term Oregon governor Victor Atiyeh, led the company – which has a production facility in India – before he died in 2014. Tom Atiyeh says family ties are important, and Megerian Rug has demonstrated support for his family.   

“My cousin crashed an airplane, and he was airlifted to a Springfield hospital. And they went and visited him in the hospital and helped my family when they were there visiting my cousin,” he says. “This is a personal relationship. This is not just business. These are people we know and respect.”