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Kebabian’s Squeezed By Recession

by Brian Dowling | Mar 3, 2011 11:14 am

(4) Comments | Commenting has been closed | E-mail the Author

Posted to: Business/Labor/ Economic Development, Downtown

Brian Dowling Photo When John R. Kebabian Jr. took over his family’s rug importing business in 1992, he was a Yale biochemistry student a few blocks away. As difficult as those early days were, keeping the Elm Street business above water in the middle of the worst recession since the 1930s has been an even greater challenge.

These are tough times for all types of luxury products, but especially for high-priced goods tied to the depressed housing market. Traditionally, consumers buy household goods when they buy a new home. But with home sales running at the lowest pace in more than a decade, sales of these products are down sharply.

That’s the case for completely hand-woven imported rugs like those sold by Kebabian, which tend to be relatively expensive, commanding prices that range from $800 to more than $11,000.

Kebabian, pictured in his store, has slashed prices on some products, from $800 to $395 and $11,900 to $5,995. Selling two to three rugs makes an average week for the store these days, compared to before the recession when selling a dozen was the norm.

The fall in sales volume nationally is apparent in declining import numbers. Rug imports began dropping in 2007, according to the U.S. Census Bureau’s imports report. At the lowest point in February 2009, the U.S. reported importing about $112 million of rugs, down more than 40 percent from $189.5 million in July 2007.

But falling demand isn’t the only problem Kebabian has to deal with. Wholesale prices for handmade rugs are higher today than they were before the recession. That’s partly due to economic upheaval in the countries that supply most imported rugs: Afghanistan, Pakistan, India and Nepal.

In those countries, weavers have been going out of business for the past few years, and fewer young people are taking up the traditional and demanding craft. That combination has left fewer manufacturers—and fewer rugs—in the marketplace.

The remaining weavers “are the better people, the serious producers,” Kebabian said. “Also, they can command higher fees.”

Kebabian isn’t able to pass along his higher costs to customers and tried to cut costs by cutting travel. When times were better, he would visit the manufacturing sites, observing the weavers and personally checking the quality of their work. Now, a phone call or e-mail message with an image of the product attached has to suffice, he said.

“On the other hand, the camera lens sees it different,” Kebabian said. “You can’t tell there either, so it was still beneficial to travel over there whenever I could.”

When he was studying biochemistry, Kebabian didn’t expect to enter the import and retail business. But in the early 1990s, his father was fighting cancer. When the disease became terminal, Kebabian took over the store to keep it in the family.

The Kebabian family has run the store since 1882, when John C. Kebabian immigrated to the United States from Turkey.

While Kebabian’s career change might seem like a stretch, his strong knowledge of chemistry ended up being a useful skill working with rug producers. Making dyes for yarns in a natural way requires precise mixing and baking of chemicals to create the exact color desired.

He recalled some frustration working with weavers and producers to create the colors. Early on, the trial-and-error nature of the industry, and a cultural abhorrence to waste by his producers, led to problems.

“Say they overcooked a color, and it was supposed to be red and it came out brown,” Kebabian said. “They went ahead and wove several carpets with that burned wool, overcooked wool. Had I been there I would have said, ‘Throw this away.’

“It took a long time—and I’m saying years—to tweak production so that they were getting it right,” he said.

That was when the Internet came in handy, he said, since producers could e-mail photos if they were unsure. 

While all retailers are waiting for the housing market to rebound, rug importers have seen some good news recently. Although the number of new homes built has fallen every year since 2005, the market is showing improvement. Nationally, new home starts jumped about 6 percent between 2009 and 2010, and home sales in Kebabian’s Northeast market improved almost 16 percent.

“When there’s a lot of movement in the market or a lot of new home construction, that’s when our business really takes off,” Kebabian said. “But for us, we can get by because people are renovating or just wanting to get a new rug to dress up their house.”

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Comments

posted by: Tessa Marquis on March 3, 2011  12:13pm

Expensive but worth it.

I inherited a large and (at that time) valuable carpet. He guided me through an understanding of the history of the piece and then did a superior job to repair and clean it.

I have met and spoken with many “rug merchants” over the years and firmly believe that this is the best place I have been to in three states.

posted by: anon on March 3, 2011  12:36pm

It’s amazing to have retailers of this high quality in New Haven.  The 100-year-old hat store next door is another example.  Having the city be a shopping destination ensures that folks will come here from very far afield, as well as from neighboring towns, which supports innumerable jobs and taxes in our city. 

If the city were made even more pedestrian friendly, it would be seen as an better place to visit and shop in. The high speed, noisy traffic, large number of parking lots and curb cuts, and long crossing distances on streets like Elm and Church means that many families with kids currently prefer to go for a stroll - and shop - in traffic-calmed towns like Guilford, Milford, and West Hartford.

Bottom line is that we need to stop worrying so much about global competition for biotech jobs (especially with NIH budgets likely to get slashed), and start worrying more about local competition for jobs like Kebabian’s.

posted by: Threefifths on March 3, 2011  2:13pm

I guess Blame the union hates will blame unions for this.

posted by: Fairhaven Dave on March 4, 2011  5:46pm

If you aren’t selling food or items for students, you will do well to move your business away from downtown; which is largely considered an area affluent drivers avoid like the plague…

Kebabian is a heck of a nice guy and a great family.  Those rugs are investment grade, wonderful pieces of art.  I am always amazed that people shop for woven rugs at Ikea when he has the real thing for the same (or lower)  prices, Granted his retain some value, the dyes hold, they wear honestly; BUT they aren’t named KLAVSHNERGIN FlERGIN or sold next to $2 paperboard picture frames and frozen meatballs.

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