Ethan Allen closing 2 plants

Staff Staff, April 22, 2004

DANBURY, Conn.Ethan Allen will close two case goods plants, in Boonville, N.Y., and Bridgewater, Va., moving most of the production into other U.S. facilities.

"It is for the overall long-term viability of the company that we have to make these difficult decisions," said Farooq Kathwari, chairman and CEO. He said the action will help the company stay competitive and strengthen the remaining U.S. manufacturing operations.

The closures affect 500 employees and 415,000 square feet of factory space. The move will leave the company with 12 plants with nearly 4 million square feet and 4,000 employees.

Ethan Allen expects to take a pretax restructuring and impairment charge of about $12.5 million to $13.5 million ($7.7 million to $8.3 million after tax), mainly noncash and mainly in its fiscal fourth quarter ending June 30.

Thirteen years ago, Kathwari said, Ethan Allen had 27 U.S. plants, many of them small. A number were closed as the company boosted capacity at larger plants through improved technology, and did more outsourcing. The company now imports about 30% of its product, he said.

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