The No. 1 trend in the floor covering industry currently is the outdoor rug.

Through its first 30 or so years, Homemaker Industries operated as an importer and sales representative for rug manufacturers. Originally established as the B.G. Blum Co. in 1945, it represented many small area rug mills located in and around Dalton, Ga. By the mid-1970s, the company was running its own distribution center, complete with a quality control department to inspect the rugs coming in, explains Jeff Vaughn, senior vice president of sales for Homemaker.

At the time, according to the company, the majority of the braided rugs being sold in the U.S. market were produced in Japan. "It didn't take long," Vaughn says, for Homemaker's quality control department to figure out that the rugs coming in from Japan were not of the quality the company had been promised; even the coloration of the finished products differed from what Homemaker had been expecting.

Aside from the inferior quality of these imported products, Homemaker saw "the lack of creativity, the absence of a U.S. manufacturer and, most importantly, the potential size of the braided rug market in the states as all adding up to a terrific opportunity for [the company] to develop a manufacturing operation," the company states.

"We took it upon ourselves," Vaughn says, to make sure there would be braided rugs that lived up to Homemaker's standards. The company purchased a braiding facility in Rhode Island and began making rugs under the Homemaker name. The move took a lot of internal capital and a substantial amount of effort, but it has paid off. Homemaker is now "the largest braided rug manufacturer in the industry," Vaughn says.

Headquartered in Brockton, Mass., Homemaker's rugs are produced at its plant in Matamoras, Mexico. The company also operates a 65,000-square-foot distribution facility in Brownsville, Texas. Homemaker offers more than 2,000 SKUs, covering many different styles.

Ground Cover
"Last year, we started manufacturing outdoor rugs," Vaughn says, and that has become "one of our biggest product categories." He adds that the No. 1 trend in the floor covering industry currently is the outdoor rug. "If you think about it," he says, "there are millions and millions" of outdoor areas in the United States - such as patios and decks as well as outdoor living rooms - that have bare floors. Homeowners realized that outdoor rugs can create a bridge from the home's interior to its exterior living area, he adds.

Homemaker also manufactures pet beds and table linens such as placemats and napkins. Besides producing its own table linens, Homemaker also makes table linens for other companies. Such subcontracting work allows domestic manufacturers "to realize a cost savings by doing it in Matamoras instead of in the U.S.," Vaughn says.

Additionally, Vaughn says, Homemaker makes pet beds and braided plant hangers at its Matamoras facility.

In the braided rug marketplace, Homemaker has two types of competitors, Vaughn explains. There are domestic companies that manufacture in the United States and those whose manufacturing takes places overseas, in places such as China and India. Homemaker has advantages over both types of competitors, he says, because it can make rugs cheaper than those who manufacture in the United States and its rugs are superior in quality to those made overseas.

"This is a very labor-intensive process," Vaughn says, adding that it can take six weeks to fully train someone to properly sew a quality rug. The labor costs in the U.S. being "10 times" that of labor in Mexico, Homemaker can make "the highest-quality braided rugs at what can be considered a 10th of the cost" of its American counterparts," Vaughn says. "There's a real cost significance between us and [those who manufacture in the United States]."

And unlike overseas manufacturers, Homemaker is not hampered by limitations in available colors, sizes and delivery time, Vaughn says.

Braids made overseas are "often flammable, which you can't sell over a 40-inch by 60-inch size (in the United States)." He says when rugs made overseas are treated to make them flame-resistant, the chemicals can affect the coloration of the rugs. Additionally, when new color trends emerge, it can take the overseas manufacturers months to catch up, because the manufacturer will have to find a yarn supplier overseas, then ship the finished product to the United States. Homemaker, on the other hand, can buy needed yarn domestically, have it at the Matamoras plant quickly, and have the finished products out "in about two weeks," Vaughn says.

With inventory stocked at its Brownsville facility, Homemaker can quickly get whatever rug a customer needs, in whatever quantity desired.

Vaughn notes "the home fashion industry is turning into a mirror copy of the fashion industry, where colors and designs change seasonally. Homemaker has made the effort to respond to such a shift by employing two staff designers, "who do nothing but design for seasonal trends," ensuring that the company can quickly respond to color and style trends.

"The long-term plan for Homemaker is top-line sales growth, and then margin growth," Vaughn says. "We'll achieve the top-line sales growth in a couple ways," namely expansion of product categories - indoor/outdoor rugs and pet beds, mainly."

The margin growth can be achieved in a variety of ways, including "updating sales offerings, keeping inventory at a minimum and borrowing money smartly," Vaughn says. "Homemaker always looks at its cost of doing business," he says, and consequently has in the past few years kept its business model profitable.