Unraveling the Oriental Rug Gobbledygook

Some ads clearly signal distress: “Oriental Rug Liquidation SALE: Save Up to 80%. Entire Inventory Must Go. “ Everyone knows what “liquidation” means. This business is selling off its assets--fast and presumably cut-rate--before it folds.

Some ads are more subtle, even abstruse. One advertised more than 1,000 Oriental rugs (“60%to 80% Off”) in an “Inventory Clearance from Customs Warehouse Storage 1 General Order 17181.” Another, titled “Public Notice,” advertised an airport cargo warehouse auction of “extremely high value” carpets--”Sealed Cargo Bales Disposal Airfreighted on British Airway Bill 125-4968 7470 Duty Paid and Cleared from U.S. Government Customs,” all in “accordance” with U.S. Government Customs Services Regulations Title 19, Part 134.11 and Title 19, Part 11.12B.

The implication? Some special circumstances required the immediate unloading of the goods, under some official aegis.

All three ads represent a popular school of Oriental rug promotion. Apparently, a great number are sold by entrepreneurs who are going out of business, or are selling off stock that they picked up cheap from someone else who went out of business, or have been asked to liquidate abandoned goods. Many, moreover, are auctioned off, often by itinerant auctioneers who run one-day sales in hotels and leave town.

Terms such as liquidation and clearance and going out of business are often taken casually. The above liquidation ad, for example, placed by Orient Handel, a Los Angeles dealer, specifically says: “After 25 years in the business, we are liquidating our entire inventory,” and suggests using their rug cleaning services “while we are still here!” But “we’re not going out of business,” says Jason Shokrian, the owner’s son. “We’re overstocked right now and are trying to liquidate a good portion of our inventory.”

Some ads provide permit numbers for authentication. “Closing down! Our Pasadena store only--All inventory must go! Permit 98-027450,” says an ad from A.A. & A. Oriental Rugs, a five-store Los Angeles chain, simultaneously offering “massive reductions in all showrooms,” and “50%-70% (off) on this week’s specials.”

References Sound Official

Many municipalities do require permits for advertised close-out sales, fire sales, going-out-of-business or similar sales. In Los Angeles, for example, such permits are good for 30 days with one extension and require the filing of an inventory list, but don’t require actually going out of business: The sale, presumably, could avert that. There is no test of the merchant’s veracity, but each store is limited to one such sale a year.

Other official-sounding references appear frequently, often involving a court, a bank, (“Ordered released through a U.S. bank from secured storage warehouse”), or better, a government agency--all implying goods of some value are involved. “Any kind of connection with the federal government gives it some kind of official stamp,” says Mike Fleming, spokesman in Los Angeles for the U.S. Customs Service, which is often mentioned in auction ads so people will think it’s one of the service’s own auctions of unclaimed goods.

But what is the actual connection? “We haven’t the time to discuss this,” says Simon Turobiner, principal in Los Angeles-based Embassy Oriental Rugs, which ran the Customs Warehouse ad citing General Order 17181. According to Customs Service records, the order had nothing to do with rugs, but covered three unclaimed cartons of garments, held in a Customs warehouse for a year and sold at last June’s auction.

Another Embassy “Inventory Liquidation” (60% to 80% off again) involved stock “acquired from Chapter 11 debtor loss claim settlements . . . in United States Bankruptcy Court Southern District of New York Case No. 83B11732.” But in that case, “there was never any official liquidation of Oriental carpets pursuant to the court order,” says New York attorney James Laughlin, who represented the debtor, Waterman Steamship Corp. In the year since, similar ads have appeared around the country, he says, obviously “attempting to imply that they’re doing this under the aegis of the court, that it’s some type of fire sale and you’re going to get a good price.”

The legitimizing can become gobbledygook--the “Public Notice” above, for example, of the British Airways shipment. For all the references to an air bill number, customs clearance and customs regulations, all the ad said was that goods entered the country, cleared customs and were labeled with country of origin and fiber content.

It’s too easy to say, as some do, that rug merchants have been known for hyperbole since traders met at crossroads on camels. More likely, Oriental rugs are simply what Ibby Morady, a Los Angeles appraiser and dealer, calls “a blind business” in which most buyers are dependent on either the seller’s word or his fast talk.

The very product is mysterious, an art object valuable only if authentic in manufacture, age and origin--characteristics requiring some considerable knowledge to recognize. With the last decade’s rage for renovation and old things, for parquet floors and ethnic decoration, even more shoppers seek Oriental rugs. Many, says Gary Walker, spokesman for New York City’s Consumer Affairs Department, are “first-time shoppers, unfamiliar with prices, buying on color and design. The merchant can easily say it’s silk when it’s not, handmade when it’s machine-made, or imply that prices are drastically reduced and they’re getting a bargain.”

There’s always common sense, of course. Anyone buying at a traveling auction, with no chance to get appraisals, had better buy only for color and design. The conditions of sale should be clear. And buyers should be reasonable, particularly if the merchant doesn’t seem to be: If a rug really has a value of $22,000, why should anyone sell it for $5,300?