Iran's Carpet Trade
WHY YOU SHOULD CARE
As Iranian trade sanctions begin to loosen, legendary Persian carpets may become more available. But will Americans still want them?
By Chris Pummer
No industry is as woven into a nation’s fabric as Iran’s carpet trade.
Dating from 500 B.C., Persian rugs have long been considered the world’s finest. An estimated 1.2 million Iranians today produce hand-woven carpets, and 80 percent are shipped abroad. They can sell from $300 for a low-end 2×3 wool-and-cotton mat to $70,000 for a 15×20 silk area rug destined for mansions and hotel lobbies.
Iran’s carpet makers hailed the election of moderate President Hassan Rohani in June, and if talks with the U.S. over curbing Iran’s nuclear ambitions succeed, a longstanding trade embargo stands to be lifted.
Just as with furniture, under-40 consumers are looking for something inexpensive that will last five to six years and then they redecorate.
Persian rug wholesaler
But it now appears unlikely Persian rugs will be imported into the U.S. in significant numbers again. The primary reason: Under-40 consumers who furnished their first apartments with IKEA and their first homes with Crate & Barrel, Pottery Barn and West Elm have no taste for their ornate, traditional designs. “This is not exclusive to the U.S.; it’s been happening in Western Europe too,” says David Banilevi, a vice president and buyer for Aminco Inc., a Secaucus, N.J.-based imported-rug wholesaler. “For younger people, the emphasis on floor coverings is not as great as with the older generation who love to have a durable and finely made carpet.
“Just as with furniture, they’re looking for something inexpensive that will last five to six years and then they redecorate,” Banilevi says. “Their money doesn’t buy them as much today, so they opt for lower-priced, mass-produced, simpler items.”
Iran’s highest-quality carpets are a source of national pride, with the finest being true works of art often hung as tapestries rather than adorning floors. A 17th-century Persian rug that sold at a London auction in June ranks as the most expensive in the world, fetching $33.8 million. Their designs — little changed over two millennia — include spiral, floral, paisley and intertwined fish patterns, historic monuments and Islamic buildings.
Carpets were Iran’s primary export — until the discovery of oil — and now run a far-distant second. Rug exports stood at $560 million last year, down 17 percent from 2011. Oil exports fell 27 percent to $69 billion, the lowest since 1986, as trade sanctions continued taking a fierce toll.
Since pistachios, caviar and dried fruit are Iran’s only other major exports, rugs are its lone product that bear a distinctly “Made in Iran” label — albeit referencing Persia, its common name in the west prior to the 1979 revolution. The taking of American hostages and emergence of a hardline, religious leadership led to 34 years of hostile relations which eased only recently during discussions about reducing Iran’s nuclear capability.
Iranian carpets since the revolution have been subjected to on-again, off-again U.S. sanctions. President Clinton lifted the embargo in 2000 before leaving office, in consideration of the often poor, rural loom workers who produce them. President Obama re-imposed it in 2010 after another flaring of tensions.
Generation after generation, they’ve used the same designs and colors…I can’t call it pride. They just don’t produce modern rugs.
Like many importers, Armanrugs.com beefed up its stock before the embargo’s last reinstitution, hoping the supply cutoff would boost demand. The bulk of that inventory remains unsold.
Armanrug’s Persian rug sales have actually been declining for more than 10 years — and not because President George W. Bush demonized Iran as a member of the “Axis of Evil,” says Hassan Ghotb, the online retailer’s manager.
“We just don’t have young customers for Persian rugs,” says Ghotb, an Iranian native. “Buyers are a minimum of 40 years old.”
Iran’s artisan weavers are also confronting the same global twister that tore U.S. manufacturing asunder — cheap foreign competition. Yet the thriving output of machine-made knockoffs from China, India and Pakistan may ultimately prove less debilitating than a deeply tradition-bound, national industry’s failure to adapt.
“Generation after generation, they’ve used the exact same designs and colors,” Ghotb says. “I can’t call it pride. They just don’t produce modern rugs.”
Jeffrey DeSantis, president of the Oriental Rug Retailers of America, agrees that inflexibility threatens to cripple Iran’s standing in the rug trade. His group represents more than 70 top U.S.-based importers, wholesalers and manufacturers of area rugs from India, Pakistan, China, Nepal, Tibet, Turkey, Romania and Iran.
“Their colors and designs just aren’t current,” says DeSantis, chief executive of Cranford, N.J.-based Amici Imports. “Even when the market was there, it was impossible to get them to change their palette, and now they are way behind the curve.”
If the current talks make headway, DeSantis still doesn’t see the embargo being lifted in the near future because of the effort it will take to confirm that Iran is scaling back its nuclear program. “Trust and verify will take some time.”
If and when the embargo is lifted, the currency ebb and flow of the global market may actually see exports of high-quality Persian rugs from the U.S. into Iran exceed new imports flowing from Iran to the U.S., Banilevi says.
“Rugs I paid $2,000 wholesale for five years ago are selling there for $4,000 and $4,500,” Banilevi says. “It’s possible I may ship some back.”
- Chris Pummer, OZY AuthorContact Chris Pummer