Sponsored by Lane Powell
Home Back Issues February 2013 Lapchi revolutionizes the rug business

Lapchi revolutionizes the rug business

| Print |  Email
Articles - February 2013
Monday, January 28, 2013
Article Index
Lapchi revolutionizes the rug business
Page 2
Page 3

BY LINDA BAKER

0213 Tactics
Kerry Smith, managing partner of Lapchi, in the company's Portland atelier
// Photo by Eric Näslund 

Kerry Smith, managing partner of carpet company Lapchi, knows a thing or two about beauty — its power and limitations. “Lapchi makes beautiful rugs,” says Smith, sitting in the company’s elegant Pearl District atelier in Portland, featuring floor-to-ceiling windows and an array of silk and wool rugs. “But nobody has a monopoly on beauty,” Smith says. “Beauty is part of the cost of entry. Beauty is not a strategy.”

A former bread-baking magnate with a penchant for yoga and meditation, Smith co-founded Lapchi in Portland in 2001 with $300,000 and a clear objective: to disrupt the dominant business model in the handmade carpet sector, which at the time involved a lot of inventory but limited financial returns.

Twelve years later, Lapchi is the main reason the industry standard today is made-to-order custom rugs. The company itself has sold more than 6,000 custom and handwoven carpets, mostly to hotels, professional firms and high-end residential customers, including hotel chain Ritz-Carlton and Oprah Winfrey. But Lapchi’s innovations also led to new challenges. “We demonstrated there was a better way to sell rugs, and lots of people did it,” says Smith. “The result is a tremendously competitive business.”

To help distinguish the company, especially in an economic downturn, Lapchi continues to adopt initiatives that push convention, including opening new ateliers in several cities, launching new digital marketing strategies and even rethinking the company’s pioneering custom-made approach. Innovation has always been a core value for the company. Changes in the marketplace, he says, simply mean the company must “further refine our strategy.”

Before Lapchi, most high-end rugs made in Asia were purchased from huge piles off showroom floors. Those piles were driven by manufacturers, most of them “fifth to 15th generation, making traditional things, pushing them through the pipeline,” Smith says. For dealers, carrying massive inventories meant a low return on investment. Meanwhile, interior designers — Lapchi sells primarily to the trade — often had to compromise on size, design and color. “No matter how many rugs were in the showroom, they rarely had the perfect rug for the end client,” Smith says.



 

More Articles

Podcast: Interview with Steve Balzac

Contributed Blogs
Tuesday, August 19, 2014

082014BalzacBY TOM COX | OB BLOGGER

Tom Cox interviews Steve Balzac, author of "Organizational Psychology for Managers."


Read more...

The Scott Kveton affair

News
Wednesday, July 09, 2014
ScottKvetonBY LINDA BAKER | OB EDITOR

Scott Kveton, the CEO of Urban Airship is taking a leave of absence from the company. As the story continues to unfold, here’s our perspective on a few of the key players.


Read more...

Startup or Grow Up?

September 2014
Tuesday, August 26, 2014
BY JON BELL

Startup culture is all the rage. Is there a downside?


Read more...

Buyer's Remorse

September 2014
Tuesday, August 26, 2014

Parents and students paying for college today are like homeowners who bought a house just before the housing bubble burst.


Read more...

Community colleges and sustainability

Contributed Blogs
Thursday, July 31, 2014
sustainabilityBY MARY SPILDE | OB GUEST CONTRIBUTOR

Faced with the aftermath of the “great recession,” increasing concern about the environment and dwindling family wage jobs, we have some very important choices to make about our future.


Read more...

College Hacker

September 2014
Wednesday, August 27, 2014
BY KLINT FINLEY

Treehouse CEO Ryan Carson builds a 21st-century trade school.


Read more...

Back to School

September 2014
Wednesday, August 27, 2014
BY LEE VAN DER VOO

By now we’ve all read the headlines: Starbucks is giving away free degrees. Except it isn’t.


Read more...
Oregon Business magazinetitle-sponsored-links-02
SPONSORED LINKS