From rugs to riches.

AuthorGray, Tim
PositionRUNNER-UP - Company overview

ART & DECOR KINGDOM INC. dba RUG & HOME

Headquarters: Asheville

CEO: Rakesh Agarwal

Employees: 55

Founded: 1995

Projected 2009 revenue: $15 million

Business: Home-goods retailer

Customers assume that retailing depends on creative selling. But it really turns on shrewd buying, Rakesh Agarwal says. A retailer who buys the right goods at the right price can make a plump profit One who buys badly risks excess inventory, markdowns and even bankruptcy, no matter how many people shop in his store.

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Agarwal and his wife, Dolly, have built Rug & Home, a seller of rugs and other home goods, into a regional chain by being savvy--and, at times, intrepid--purchasers. In their early years as retailers, Rakesh would trek to such unstable countries as Iran, Pakistan and Afghanistan to hunt down carpets. Dealing through brokers in New York and London cost too much, preventing the Agarwals from offering prices they believed could broaden the appeal of exotic rugs. Today, Rug & Home has a store in its hometown, another in Gaffney, S.C., and a third scheduled to open early next year in Kannapolis. Rugs account for about 80% of sales.

The Agarwals--Rakesh is 55, and Dolly, 49--are unlikely merchants. He trained as an engineer at India's leading technology university. She was reared to be a mom and housewife. A career misstep altered their plans. Like many educated young Indians, he wanted to come to the U.S. In 1985, he accepted a job as production manager for a Hendersonville rug maker. In India, the $12,000 annual salary sounded kingly. With a wife and child to support, he could barely make rent. His wife went to work for The World of Clothing Inc., running the retailer's fledgling rug department. After getting off work, he would help out. They would tuck in their daughter, Aanchal, atop a pile of rugs to sleep until they quit for the night. World of Clothing eventually hired him, and over a decade, the Agarwals built the department's sales to $11 million a year. The store drew customers from 100 miles. The lure: low prices and easy access. It was open every day, often until 11 p.m. Americans, the Agarwals realized, would drive for a deal.

In 1995, they opened a store in Asheville...

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