Ethan Allen readies e-commerce, new product

Company taking steps to meet economic ‘challenges'

Clint Engel -- Furniture Today, September 4, 2008

NEW YORK — Ethan Allen is weeks away from launching an e-commerce initiative on its Web site and months away from introducing a new round of modern product, Farooq Kathwari told attendees of a conference here.

Kathwari, chairman and CEO of the Danbury, Conn.-based Top 100 company, speaking at the Goldman Sachs Global Retailing Conference here, cited those steps among several initiatives the company has taken to grow its business and "meet the challenges of this economy."

He said that within the next few weeks the company will introduce a Web site that Kathwari said has taken two years to develop and "will add technology to the personal service of our over 2,500 interior design professionals."

The vertically integrated retailer and manufacturer will make product available for sale online for the first time, he said, adding that Ethan Allen's online sales approach will allow consumers to connect with interior designers.

By January, the company will be ready to launch an advertising campaign promoting the Web site, he said.

Also in January, Ethan Allen will unveil new product "which will redefine us more in the modern categories," he said. Most of the goods will be produced by its U.S. plants, and most of the wood product will feature water-based finishes, giving it an eco-friendly story.

Kathwari also reviewed other initiatives Ethan Allen has taken to refocus and reposition itself as the industry faces its toughest operating environment in years. He noted that the company has consolidated some 16 stores as it has made its operations more efficient, relocated many of its stores - now called "design centers" - and converted nearly all of them to a new format that displays goods in seven lifestyle categories.

In recent months, the company has cut production hours at its factories to 32 hours a week from about 40 hours to bring inventories in line, and in recognition of the tough business conditions. Earlier this week, the company forecast that earnings for the fiscal first quarter ending Sept. 30 will be lower than analysts' expectations, and noted that July and August sales were "substantially lower" than the same months last year.

"Our focus has been to manage our business and be ready for this softness and recession," Kathwari said at the conference.