The most common and most likely answer to this crossword clue is the 7 letter word CARPETS
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More clues leading to the result CARPETS
Buddy explains!

The straight part
We know that "Rugs" is the straight/definition part of the clue. The straight part is often a synonym or definition, in this case rugs = carpets.The cryptic/wordplay part
In cryptic crossword there's often an wordplay/cryptic part as well.This part involves a more complex hint, such as an anagram, homophone, hidden word, etc.
Sadly, We don't have an explanation for this specific crossword clue yet.
What does CARPETS mean?
CARPETS noun- A fabric used as a complete floor covering.
- Any surface or cover resembling a carpet or fulfilling its function.
- Any of a number of moths in the geometrid subfamily Larentiinae
- A wrought cover for tables.
- A woman's pubic hair.
- To lay carpet, or to have carpet installed, in an area.
- To substantially cover something, as a carpet does; to blanket something.
- To reprimand.